You might expect Netflix and BitTorrent to be at odds with each another. After all, one offers a legal way for paying customers to access a limited collection of movies and TV shows. BitTorrent sites like Pirate Bay, on the other hand, offer a much wider range of illegally obtained and distributed media for the very attractive price of $0.
Understandably, Netflix keeps a very close eye on the competition. Indeed, the company recently admitted that it tracks what kinds of shows and movies are popular on torrent sites to inform its decisions on what to license next. "We look at what does well on piracy sites," Netflix vice president of content acquisition told Tweakers (translated from Dutch).
Welcome to the future of data-driven entertainment.
This strategy has already informed the company's decision-making. Prison Break, for example, is one of the Netherlands' most downloaded TV series on BitTorrent sites, which is why Netflix decided to acquire the show's rights.
Netflix believes it can wean torrenters to its subscription platform by offering a superior (read: more convenient) product. "Certainly there's some torrenting that goes on, and that's true around the world," said Netflix CEO Reed Hastings. "But some of that just creates the demand."
"Netflix is so much easier than torrenting. You don't have to deal with files, you don't have to download them and move them around. You just click and watch," Hastings says.
One goal of Netflix is to convert people who currently use pirate sites to get their fix, and there is some evidence that this is indeed happening. According to Hastings, there is evidence that BitTorrent traffic in Canada dropped 50 percent after Netflix started there three years ago. [TorrentFreak]
The company hasn't been shy about touting its technologically-informed, metrics-based approach to develop its catalog. The success of House of Cards, for example, was determined using complicated math that partially combined a subscriber's love for films by director David Fincher with their love for movies starring Kevin Spacey, the show's protagonist. The rights to a fourth season of Arrested Development were obtained after similar analysis.
"Relative to HBO, we're much deeper on the tech side, and relative to Amazon, we're much deeper on the creative side," Hastings told the San Francisco Chronicle back in February. "We're able to do more and more calculations and big-data statistics so that what we do is represent Netflix more and more as a place where you come for relaxation, escape."