The Unexpected Relationship Between Netflix and Piracy Sites

Gareth Cattermole / Getty ImagesNetflix CEO Reed Hastings.It's easy to imagine that Netflix despises pirating websites that allow people to download movies and TV shows for free. After all, it only takes some Internet digging and a lax moral code to find the gratis versions of the same content you would pay $7.99 a month for on Netflix.

Instead, though, file-sharing sites like BitTorrent help Netflix improve its business by making it obvious what shows people want to watch.

Speaking ahead of the company's launch in the Netherlands, Netflix's Vice President of Content Acquisition Kelly Merryman said that the company actually checks out piracy websites for ideas about what Netflix should offer. If something is crazy-popular on file-sharing websites, Netflix is more likely to purchase it.

For example, Prison Break, an American serial drama that ran from 2005 to 2009, appeared as a locally-downloaded favorite in the Netherlands, so Netflix decided to buy the rights to the show for that area, Merryman told Tweakers.

Netflix CEO Reed Hastings said that continually trying to offer content that users are otherwise poaching from piracy sites creates a demand for Netflix's higher-quality streaming. The simplicity of pressing "play" over the complex torrenting process is apparently winning a lot of people over: Reed told TorrentFreak that BitTorrent traffic in Canada dropped 50 percent after Netflix started there three years ago.