This is how Netflix uses online piracy to its advantage

Considering how few things are as big a threat to Netflix as online piracy, it’s no surprise that a nation’s piracy rate is actually one of the things that Netflix uses to determine what’s it will charge for its service in that country. It’s also interesting to note that Netflix uses piracy statistics to determine which content is best suited for a particular region. 

With nearly 60 million subscribers globally, Netflix is a giant in the world of online video entertainment. In terms of providing access to popular TV-shows and movies the company’s biggest competitor is piracy. Just a few weeks ago Netflix described the BitTorrent-powered Popcorn Time as a major threat. Interestingly, piracy also offers critical business intelligence to the company. For example, it uses local piracy statistics to determine what content it should offer in various regions. That’s not all though. During this week’s earnings interview Nexflix’s Chief Financial Officer David Wells said that a country’s piracy rate is a main factor in determining the service’s local price. “Piracy is a governor in terms of our price in high piracy markets outside the US,” Wells explained. “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,” Wells added. Another recurring issue is Netflix policies against VPN usage. While the terms of use have prohibited this for a long time already, the big crackdown on VPN users has yet to begin.