Netflix cuts prices to compete with piracy
Staff Reporter | On 22, Apr 2015
Netflix lowers its prices in countries where piracy is more common, it has revealed.
“Piracy remains a considerable long-term threat, mostly outside the U.S.,” founder and CEO Reed Hastings and Chief Financial Officer David Wells wrote to shareholders in their Q1 report last week.
The company has admitted before that it uses piracy data from torrenting sites to help decide what shows it should offer in particular territories. Nonetheless, it is also keenly aware that illegal online viewing hurts profits, as well as the creative and VOD industry on a wider scale.
Their solution? Lower the subscription fees. How do you undercut something that is free? You can’t, but the company hopes to at least compete with its library of high-definition, easily navigated titles.
Piracy is “a governor in terms of price”, Wells said in an interview after last week’s announcement. “We wouldn’t want to come out with a high price because there’s a lot of piracy, so we have to compete with that.”
The news came to light following the company’s recent launch in Australia, where piracy is famously high, partly thanks to a lack of legal access. Hastings has previously expressed his wish to make content available globally through Netflix, as opposed to on a territory-by-territory basis, to help combat pirates who are simply unable to see certain films or shows.
Even when things are released globally, though, piracy remains a challenge: Daredevil, Netflix’s latest original series, was released in more than 50 countries but has seen 2.1 million user download episodes of the show through torrenting sites, according to Excipio.
Brazil led the way, with 190,274 torrent downloaders – Variety notes that Netflix has been in the South American country since 2011 – followed by India (149,316), the US (144,351), the UK (119,891), France (105,473) and Australia (101,025). India is the only country from that list to not offer Netflix.
The only TV show to top the demand for Daredevil between 10th April and 16th April is Game of Thrones, which remains the most pirated TV show in the world.
Despite ongoing illegal downloads, though, Sky has just recorded an increase in viewing figures for the opening episode of Game of Thrones Season 5 and a rise in subscribers to contract-free VOD service NOW TV (the UK equivalent of HBO Now), while Netflix has just seen its worldwide membership rise by 4.9 million to pass 60 million.
Photo: Barry Wetcher © 2014 Netflix, Inc. All rights reserved.