Netflix thwarts TheDarkOverlord
Ahacker who has unsuccessfully tried to hold Netflix for ransom has achieved an unexpected result: His failure shows that subscriptionbased business models in content distribution is making piracy pointless. Intellectual property owners’ slowness in adopting these models is the only reason content is still being pirated.
Someone calling himself ( or herself, or themselves) TheDarkOverlord stole most of the new season of Netflix’s popular series, Orange Is the New Black, from a postproduction studio and demanded ransom.
Netflix refused to pay, and TheDarkOverlord put the stolen material on the Pirate Bay for anyone with a torrent client to download. But it’s not likely that others the hacker or hackers are threatening — Fox, National Geographic and ABC — will pay up, either. Nor will Netflix regret its decision to hold on to its money: It’s safe to say that its bottom line won’t be affected; the most that might happen is that the fifth season of Orange will be released earlier than planned.
The reason can be found in networking solutions provider Sandvine’s Global Internet Phenomena Report.
Last year, BitTorrent traffic reached 1.73 per cent of peak period downstream traffic in North America. That’s down from the 60 per cent share peer- to- peer file sharing had in 2003. Netflix was responsible for 35.15 per cent of downstream traffic. File sharing is the only traffic component of Internet traffic that isn’t growing in absolute terms, according to Cisco Systems.
Its content has been pirated since Netflix began producing its own shows, but it’s never left a mark. It has the resources for legal fights when they’re called for, but really, who wants to go through the trouble of using torrents — and risk problems with one’s Internet provider, or, especially in Europe, with the law — to see a season a little earlier?
Certainly, no one will cancel their Netflix subscription because one series is suddenly available for free download with an increasingly unpopular, inconvenient technology that doesn’t allow instant streaming. People would only consider that if all the content available on Netflix could suddenly be streamed free of charge.
“Subscription” is the key word here. This business model is a piracy killer.
For 15 years, Adobe Systems tried to sell its image manipulation software for thousands of dollars per box to professional photographers and designers — and everyone I knew in that community used pirated copies at home. Now that the software is sold as a service, for a monthly subscription fee, everyone I know pays more or less happily.
Adobe managed to switch to the subscription model without losing revenue.
For companies in the content industry, however, it’s been a scarier transition.
Record companies, for example, lost massive amounts of money in the shift to streaming, not least because the music streaming industry pioneers initially gave a lot of music away for free, hoping to build advertising- based business models. Now that this illusion is gone, streaming revenue is quickly growing, and music catalogue owners and artists are more willing to cooperate with streaming services.
According to Muso, the digital content protection firm, 2016 saw a 6 per cent decline in visits to music piracy sites, including “stream ripping” services that offer illegal streaming.
Eventually, movie studios and streaming services should work out a reasonable, perhaps tiered, subscription price system to make more content available online. It would drive down piracy, as the subscription model did in the software and music businesses, and it would make theft as nearly pointless as it has been in The DarkOverlord’s case.