Netflix Sets Pricing Based on Local Piracy Rates
J Thoendell stashed this in Film
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.
A few thoughts:
1. Netflix has 60 million subscribers now?! Woah, that's huge.
2. This is the first time I've heard Netflix call Popcorn Time a threat.
They mentioned in the second to most recent corporate call. In the most recent one, I believe, they did not mention it.
I went back and read this again...
...and I can see why Netflix thinks it's a threat. Popcorn Time seems pretty unstoppable.