Netflix CEO: ‘We’re Finally Beating BitTorrent’

28 Comments

At the D9 Conference this morning, Netflix (s NFLX) 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 (s NWS) 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 (s CBS) and HBO (s TWX) 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.

28 Comments

reality

“”Dexter as one example of a show that benefited from having early seasons available on Netflix””

lol

Dexter benefited from the Pre release episodes on filesharing networks , (BEFORE Netflix streaming existed) who also have all previous episodes.

Paying the creators for there product is a good thing.
Paying Netflix to maintain the old Copyright status-quo is not a good thing.
Especially helping maintain the old business models where digital content is given FALSE VALUE , based on FALSE SCARCITY.

Netflix are selling content that can be copied endlessly at near zero cost.
They are selling worthless information.
Copyright & DRM create the false scarcity and hence artificial value.

I for one , will not buy/rent worthless products.
Sell me something that is ACTUALLY worth something , not artificial.

I may however buy a Netflix streaming/downloading video SERVICE , but filesharing is better than netflix in this area and netflix are not an isp.

jo blow

got to love the yanks pulling there own chain what about all the other users on the net that cant offord huge monthy down load space or some 1 living in a nother countary where u cant get hi hi hi spped net and if u want gigs u got to pay big

so Mr netflix who i wood say even if i coud make room in my cap and beening in aust is hard and there littlest size for a tv show wood be 2gig and i got to pull it from the usa it wood take for forever and a day thats why a free DL of a HD tv show in the rudjuced size of 350mb wood get me and even if i did dl that show so WHAT if i like it ill get it on DVD if i DONT like it i dont DL that crap so what are all u tosser’s bitching about u get your money in the end

if scfi had counted pirted DL of SGU thay wood not have caned if WANKERS

jeff s.

most bittorrent users use protocol encryption so i doubt netflix is really beating bittorrent

Michael in Cannes

After having seen the ongoing disaster that is the music industry, it has been painful watching the movie industry head the same direction. So this is definitely good news, although there will have to be a shake-up in the structure of distribution before this really makes an impact on movies.

As a sidenote, I was talking to a label the other day whose digital revenue is only 15% of sales. I often hear figures of around 20%. So although many people seemingly live on the Internet, there are not enough to make it the core sales channel for content. Yet.

Stephen Darryl Suggs

I can’t help but wonder whether the MP/RIAA Support Group’s legal scare tactics have to do with Netflix’s success. Are the people genuinely more willing to pay for content, or do they simply feel it’s safer than the risk of getting sued?

Mike

If you want to draw users from bittorrents… maybe OFFER NEWER MOVIES. expand on your instant selections (which suck), and get newer movies to have sent to mailboxes too. Your selection blows. thats why users go to bittorrents, to get movies they cant find elsewhere.

phil klisma

netflix is not beating bittorrent, they are actually providing source material for bittorrent, and making a welcome contribution to the P2P culture, as well as being an example to the rest of the media community. get with the times or you will be extinct

phil klisma

@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

Ryan Lawler

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?

Brett

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.

phil klisma

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

Cody

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.

joe

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.

Ryan Lawler

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

Jason

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

flamesbladeflcl

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.

Steve Tapp

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?

Brett

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.

Ryan Lawler

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.

Brett

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.

Ryan Lawler

That’s embarrassing. Apologies – now spelled correctly.

Vlad (Small Business Blog)

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?

Baran Hill

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.

Brandon

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).

Ryan Lawler

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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