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Summary:

Netflix CEO Reed Hastings said this morning that one of the things he’s most proud of is beating BitTorrent, at least in the U.S. Now, he says, the challenge is to beat copyright infringement in places like Korea, where it runs rampant.

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At the D9 Conference this morning, Netflix CEO Reed Hastings credited his company with helping to beat piracy — at least in the U.S. Now, he says, the challenge is to outcompete copyright infringement in places like Korea, where it runs rampant.

“One of the things that we’re most proud of is we’re now finally beating BitTorrent,” Hastings told AllThingsD’s Kara Swisher. Thanks to services like Netflix, Hastings said most Internet video is now paid for in the U.S. The hard part for content providers, he said, was coming up with a service good enough that people were willing to pay for, rather than just searching for free content on the Internet. Netflix has been able to provide that service by making its streaming videos available across a vast number of devices, and giving subscribers access to a wide range of library content for a relatively low price.

Netflix has also enabled content owners to make money on shows they previously weren’t monetizing. Hastings offered up Joss Whedon’s Firefly as one example of a series that had a rabid fan base that couldn’t find it under legal means prior to appearing on Netflix. At the same time, he quelled any rumors that the company could bring Firefly back from the dead.

“All of those actors are 10 years older and the sets are gone,” Hastings said about the show. But he added that before Netflix brought it online, Firefly wasn’t getting monetized and now Fox is getting paid for it.

One other way Netflix can provide value is in offering up prior seasons of shows that are still on the air. “Mostly what we’d like to do is prior seasons of big shows,” Hastings said, suggesting networks like Showtime and HBO as examples of networks that it would like to have those series from. “We’re trying to be a complement to their business… We do better on catalog content than anyone else. Then that generates demand for current seasons.”

Hastings gave Dexter as one example of a show that benefited from having early seasons available on Netflix. By doing so, viewers were able to tune in to prior episodes, building buzz and interest in new episodes when they air. While Netflix has managed to get some content providers on board with this line of thinking, others are more wary. Fox, for instance, recently licensed the first season of its hit show Glee to Netflix, but at the same time it’s seeing networks like Showtime pulling back episodes of shows like Californication from the streaming catalog.

Later in the interview, Hastings said HBO’s The Wire was the one show that he’d most like to add to Netflix’s streaming library. But it’s unlikely that The Wire — or any HBO show — will come to Netflix streaming anytime soon, as the premium cable network seems committed to driving pay TV subscriptions through its TV Everywhere initiative. “Their strategy is, if you want old HBO [shows], you subscribe to HBO and you have HBO Go,” Hastings said.

  1. Interestingly enough, I discovered Firefly because of Netflix. Loved it. Also, my wife and I are now fans of Bones and The Closer because of Netflix – two currently airing shows.

    Netflix has been a great way for us to catch up on shows we may have missed over the last couple of years. (Or ten, if you include Stargate SG-1).

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    1. Netflix is the reason I got into Dexter, 30 Rock, The Office, Lost, and a whole bunch of other shows. Which is all the more reason why I’m shocked that content partners wouldn’t want that prior season content on there.

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  2. Forgive me for being harsh, but I still for the life of me cannot comprehend what’s so hard in understanding how this works. Idiots in congress and in RIAA must be lobotomized robots if they cannot see this – people WANT TO PAY YOU, just make the content available. Put it on Hulu, YouTube, Netflix, charge whatever it is these services charging (per view or monthly fee) and just count the money. It is just common business sense. WTF is wrong with these people?

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    1. You make the best of points Vlad. People really don’t mind paying if you provide. Its when they can’t get it conveniently or people are charging too much before it becomes an issue.

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  3. Great article. I picked up Dexter via Netflix as well.

    EDIT: “want old HBO [shows], you subscrube [sic] to HBO and you have HBO Go,”

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    1. That’s embarrassing. Apologies – now spelled correctly.

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  4. I wonder if HBO will eventually be brought around to licensing their content to third-party distributors like Netflix. I like HBO GO, and have been using it to watch Rome, Game of Thrones, and other shows. The interface is excellent.

    But it’s wholly dependent on HBO having enough unique, excellent content so as to make it worthwhile. Will that hold into the future? The other premium channels have been doing their own experimenting with good original programming, and they’re much less strict on the showing of their content elsewhere.

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    1. Brett, I think it will be a while before you see HBO license its content to an aggregator like Netflix. I think it’s much more likely that you’ll see it make HBO Go available directly to consumers for a nominal fee — say $10 a month. It has all the pieces in place to do so, and the only reason it wouldn’t is fear of annoying its cable distribution partners. But if it sees its subscriber numbers decline among MVPDs, I wouldn’t be surprised if a broadband-only HBO offering became available.

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      1. You’re probably right.

        I’m hoping that HBO does eventually HBO GO as a stand-alone offer. The growth in their television subscriber base has been anemic in recent years, and it actually declined by 1.5 million between 2009-2010.

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  5. It’s too bad that Netflix still sucks in Canada.

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  6. HBO hasn’t done anything compelling since The Sopranos and Deadwood. Otherwise, they show old movies, BFD. The baton passed to Showtime with “Californication; but that made Showtime get greedy. One can watch the entire withdrawn season 4 on several sites, commercial (and royalty) free, so how smart was Showtime?

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    1. Apparently you haven’t seen Game of Thrones.

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  7. flamesbladeflcl Wednesday, June 1, 2011

    I will full on admit to torrenting a lot of shows but whenever i can i watch them on a site like hulu or netflix and lately that is getting to be more and more.

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  8. Bitch and moan about “places like Korea” pirating movies all the while Netflix and similar offers are only available in the USA.

    Once, if ever, it becomes available in the rest of the world (you do know there is a big world outside USA don’t you? Right, I didn’t think so) the price will surely be double what US residents are charged.

    You guys are so clever at scr*wing the rest of the world.

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    1. What makes you think so? The price in Canada is roughly the same as the U.S., taking into account currency exchange, etc.

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      1. Relatively the same? We in Canada pay MORE than US and get LESS…

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  9. I’d argue that it’s not scare tactics, it’s mainly just having a great service at a reasonable price. Why would I pirate a movie or TV show when I can find it on Netflix in better quality and watch it on my laptop, iPad or Xbox?

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    1. Exactly. If I can get a bunch of movies/shows I want online, I’d much rather pay a $7.95 monthly fee than have to hunt around in the darknet, hoping I don’t get a bad torrent.

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      1. if you know what you are doing, torrents are not a problem, despite the efforts being made to make them problematic.

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    2. You can watch pirated movies and TV shows on something like an Xbox. The Xbox plays a decent amount of video formats and it’s really easy to convert a video. And my general experience with pirated movies is that there is usually good quality movies to torrent on the internet by the time that the movie is available on Netflix. I’m not saying that Netflix isn’t worth the money, because I pay for it as well, just that torrents are still fairly convenient.

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  10. @Netflix CEO Reed Hastings: Netflix IS NOT BEATING BITTORRENT! you should know the issues before you speak. You (netflix) are working WITH the bittorrent philosophy but you either don’t know it or are not able to admit it.
    firstly you are making it fairly cheap to view a movie, classic or otherwise, way cheaper than the cost of downloading for a lot of people. second you are providing a source of materials for people who digitally record from their receiving gear, and create a file that can be distributed by private network, internet, mail, or by hand.
    thanks for the contribution, and keep up the good work

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