Netflix: Keeping Pirates At Bay

Gone has the time when children used to spend every waking hour outside, playing football, riding their bikes and generally getting into scrapes and adventures that they would look back on fondly in later life.  Today, they are totally consumed by the digital world we live in, communicating with family and friends through hand-held devices in a language of icons, hashtags and abbreviations.

My children laugh when I talk about trips to the video store where we could bring home a maximum of two films a week.  Trying to explain our weekly ritual of watching a “blockbuster” on a Sunday evening reduced them to tears of laughter these days.  Buzzwords like ‘rent’ and ‘video’ have been replaced by ‘on demand’ and ‘streaming’.

Our expectations of accessing media, especially in a digital format, have matured significantly in the past few years.  The dark days of dial-up Internet connections have been replaced by 4G networks and super-fast gigabit broadband.  We can now watch events live from around the world on devices that are smaller than the remote controls (on wires if your memory goes that far back!) of those old video machines.

At the forefront of this revolution, and the main reason why I rarely see my children in person these days, is Netflix.  The Californian company were one of the winners in the dotCom boom back in the 1990’s, surviving the stigma of the first Internet start-up economy and now one of the most successful digital media brands in the world with revenues today of over $4 billion.  Ironically, back in 2000 they looked to sell their business for just $50 million to the then global giant, Blockbuster, who dominated our High Streets until a few years ago.  Blockbuster turned them down.  Ten years later and the traditional bricks and mortar model offered by Blockbuster was in bankruptcy, with debts of over $900 million.

Netflix has gone from strength to strength in the last few years.  They can now boast over 50 million global subscribers, a market-domination of the streaming market in the United States and one of the major contributors for the need to improve size and speed of data networks as consumers.

Whilst the company has been one of the key factors in a drop by more than 12% in traditional TV viewing, according to a report by Nielsen.  In the UK alone, Ofcom released viewing figures that showed daily TV watching had dropped by 4%, yet in the same time the revenues of the major streaming companies including Netflix as well as Amazon Instant and Hulu had increased by 41%.  We want to consume our digital content when and where we want, and all major TV channels have realized that you cannot beat them and have to join them, and are adding ways to watch content online or on-demand (or both).  The use of BBC iPlayer is a classic example, which is now seen as the best way to block out the pain of the daily commute.

But the major impact organizations such as Netflix has had on the digital landscape is contributing to the war on digital piracy.  In a report from the University of Oslo, research showed that the piracy of movies and TV shows had reduced by around 50% in 2012 alone, from 125 million estimated illegal movie downloads to 65 million by the end of the year.

“When you have a good legitimate offer, the people will use it,” said Olav Torvund, former law professor at the University of Oslo.

There are no guarantees in quality when you try and watch content illegally online, nor do you know what else you are downloading as well as the pirated media files.  With low monthly subscription fees, and libraries of tens of thousands of titles, consumers are wising up that legitimate paid good quality content wins hands down over free poor quality downloads.

The Federation against Copyright Theft (Fact) works with law enforcement agencies to prosecute piracy but also works to educate the public on the consequences of copyright infringement.

"One message that is key is that, whether you're pirating physical copy or streaming, you are putting money into the hands of a criminal," says Kieron Sharp, director general of Fact.

“Many pirates who produce counterfeit DVDs on a large scale can be traced to organized crime rings in the Far East”, says Sharp, “who then reinvest that money in other strands of criminal activity, such as prostitution, drugs and dog-fighting. Our view is that most of these people [who stream illegally] are film and TV fans and we want them on our side, not on the side of criminals, who will profit from their consumption."

With the users of on-demand services getting younger and younger, there is an opportunity to begin the education process when consumers are at the most impressionable age that digital piracy is wrong, and that there is no value in something that is free.