Overseas Netflix prices determined by piracy levels

Adam Westlake - Apr 19, 2015, 12:00 pm CDT
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Overseas Netflix prices determined by piracy levels

While Netflix has long been a staple in the streaming market in the US, it’s easy to forget that with over 60 million subscribers globally, the service exists in a number of other countries. One interesting tidbit about the how the company works overseas was revealed by CFO David Wells on a recent earnings interview. When it comes time to determine Netflix’s subscription price in a country, one key factor they look at are the levels of piracy in that region. Higher levels of piracy mean a cheaper price to access Netflix’s content.

In an almost unheard of sentiment in the war between movie/TV studios and piracy, Wells says Netflix views illegal downloads not as some society-destroying evil, but as primary competition. “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 CFO said. If a local population is already comfortable with pirating their media, one of the only ways to convert them to customers is with an attractive price.

Another reason Netflix likes to study piracy levels is to help determine what content it should offer to different markets. If a series is popular on piracy websites, they know it would be a good choice to buy the rights to show it.

Also interesting were CEO Reed Hastings comments about VPN usage, or rather his lack of concern. “It’s certainly less bad than piracy,” Hastings said. VPNs are often used by international customers to view Netflix’s US offerings, getting around region locks, but they still need to pay for a subscription. It was added that trying to block VPNs is just like playing a game of whac-a-mole, however they are trying to address the concerns of studios.

SOURCE Torrent Freak


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