Earlier this week, Netflix rolled out their video streaming service in the Netherlands, making Netflix available in twenty-four nations around the world. While Netflix is undoubtedly convenient, the service's dominance and enduring popularity in the marketplace stems from offering high quality content to users--after all, the internet is convenient on its own. In order to ensure success in the Netherlands, like in any of the other countries Netflix is offered in, the service has to find the most popular television shows and movies to buy, so subscribers keep coming back for more.
So, just how do they decide which television series to add to their library? According to Netflix's Vice President of Content Acquisition Kelly Merryman, they follow illegal, pirated streaming sites and gauge from there.
In an interview with Tweakers, Merryman explained that while piracy is bad for copyright holders, it helps create a demand for the same content on a legal service such as Netflix. Specifically mentioning BitTorrent by name, Merryman explained that popularity on a pirate site is a good barometer of what would be popular on Netflix, as well. "'Prison Break' is exceptionally popular on piracy sites," Merryman explained, so when rolling out their service in the Netherlands, Netflix made sure that 'Prison Break' was included in their library.
In a separate interview, Netflix CEO Reed Hastings explained that piracy also encourages creators of content to make a deal with Netflix, rather than be subject to piracy without recompense. “Certainly there’s some torrenting that goes on, and that’s true around the world, but some of that just creates the demand,” Hastings said. He added that making popularly pirated material available on Netflix means pirate site users will matriculate to Netflix out of convenience. "“Netflix is so much easier than torrenting," said the CEO. "You don’t have to deal with files, you don’t have to download them and move them around. You just click and watch."
This isn't the first time that company head-honchos have mentioned the positive aspects of piracy. Time Warner CEO Jeff Bewkes went on record that the piracy of HBO's hit series 'Game of Thrones' is great for HBO as a subscription service. Of course, HBO is the one hold-out that Netflix is unable to purchase, as HBO's own on demand service is in direct competition with the big red machine that is Netflix.