Hacker Extortion Attempt Falls Flat Because Netflix Actually Competes With Piracy

Failures

from the sound-and-fury,-signifying-nothing dept

A hacking group calling itself TheDarkOverlord (TDO) has tried, and failed (so far) to extort Netflix and several other companies after stumbling onto a server of unreleased content. TDO was apparently able to compromise the servers of an audio post-production company by the name of Larson Studios. Among the content acquired from the hackers were ten episodes of the as-yet-unreleased new season of the popular Netflix show “Orange is the New Black,” which isn’t supposed to see full release until June. Outside of some free advertising in the news media and some wasted calories, the group’s efforts don’t appear to have culminated in much.

At first, the hacking group tried to extort the post-production company, which didn’t go very well. The group claims that Larson originally agreed to pay 50 bitcoin (around $67,000) to prevent the release of the compromised content, but then didn’t follow through on the payment after a December 31 deadline. TorrentFreak claims they were shown a copy of a contract purportedly signed by Larson Studios, but the group claims that while the contract was printed, signed, scanned and returned to them, Larson got cold feet about paying up.

The hacking group then shifted its attention to trying to get Netflix to pay up to avoid public release of the episodes. After apparently getting no initial response from the giant streaming company, the hacking group announced on Twitter it had leaked the first episode in the new, as-yet-unreleased fifth season of “Orange is the New Black” on BitTorrent networks:

When Netflix didn’t respond to that, the group proceeded to release ten episodes of the show’s 13-episode season, and an already deleted message via Pastebin claiming Netflix would lose significantly more money if the company didn’t pay up:

“It didn’t have to be this way, Netflix. You’re going to lose a lot more money in all of this than what our modest offer was. We’re quite ashamed to breathe the same air as you. We figured a pragmatic business such as yourselves would see and understand the benefits of cooperating with a reasonable and merciful entity like ourselves.”

Netflix’s response to the entire affair? A giant…”meh”:

“We are aware of the situation. A production vendor used by several major TV studios had its security compromised and the appropriate law enforcement authorities are involved.”

That’s a notably calmer and more reasoned response than you usually see from traditional Hollywood operations after a leak (read: pouting, crying, lawsuits, hysteria and face-fanning). In large part because Netflix knows that it’s extremely unlikely that users are going to cancel their Netflix subscription just because of an early, partial leak of the show’s upcoming fifth season. That, in turn, is largely because Netflix’s flat-rate, relatively-inexpensive pricing model provides enough value that users don’t find piracy to be the superior alternative (read: they successfully compete with piracy).

Its ambitions quashed by Netflix’s apathy, the hacking group is apparently moving on, and says it plans to now target other companies (ABC, Fox, National Geographic and IFC) whose content was also found on the compromised server:

Outside of some short-lived infamy and a few spoilers, it doesn’t seem likely that any of the group’s efforts will amount to much of anything.

Filed Under: business models, competition, copyright, hackers, leaks, piracy, streaming
Companies: netflix