Offering Good Legal Options Works: Interest In Netflix Outpaces Pirate Options In Brazil

from the no-kidding dept

If you were to have asked anyone in the film industry or the MPAA about the country of Brazil within the past decade, it's quite likely that they would have thrown their hands into the air and told you what a detestable hotbed of piracy and copyright infringement the nation was. And, hey, they would have been right. The simple fact of the matter is that there are some countries where the downloading and streaming of films and television is more common than others. The obvious next question to ask for any business interested in reversing this trend would be: why? The answer always seemed obvious to me: there is a customer demand that the legitimate options are not fulfilling. Many in film and television instead decried a lack of strict copyright enforcement and everybody wanting everything for free, instead.

Well, with a recent study published by Google, it seems we are getting an answer as to who answered that question correctly, and it wasn't Hollywood. The trend in Brazil, beginning in 2016 when streaming services were expanded in the country, is the stagnation of piracy and the adoption of legitimate streaming services.

While there’s still a long way to go, it’s interesting to hear the progress that’s being made not only in the West but also piracy hotspots further afield. This week, Brazil’s Exame reported on a new study published by Google.

Focused on movies, one of its key findings is that local consumer interest in Netflix is now greater than pirate alternatives including torrents, streaming, and apps. As illustrated in the image below, the tipping point took place early November 2016, when searches for Netflix overtook those for unauthorized platforms.

There's really only one lesson to be learned here. If an industry meets customer demand in a way that is convenient, enjoyable, and in a way that provides good value, the hassle and illegality of piracy are too much of a bother. The best way to defeat piracy is by embracing new business models, and that mantra is exemplified in a company like Netflix, which revolutionized how video content is consumed across the globe. Even if Brazil's appetite for piracy remains steady, as it has, media companies can simply out-compete it in terms of eyeballs by being awesome.

“We’re not lowering piracy but this does show how relevant the [Netflix] brand is when it comes to offering content online,” Google Brazil’s market intelligence chief Sérgio Tejido told Exame.

If an industry views piracy as completely irrelevant other than its use as a market research tool for what the public wants, then all that matters is the success of Netflix and its peers. The pirates are going to pirate, but meanwhile an entire new customer base and revenue stream has been uncovered in a country lamented as a pirate haven. And the popularity of Netflix in the country is on the upswing largely because of how great the service is.

Importantly, nine out of ten users in Brazil said they were “extremely satisfied” or “very satisfied” with the service, up from 79% in the previous year. An impressive 66% of subscribers said that they were “not at all likely to cancel”, a welcome statistics for a company pumping billions into making its own content and increasingly protecting it, in the face of persistent pirate competition.

Make a great product and give it to consumers in the way they want at a good value and suddenly piracy isn't the threat it was made out to be. That's been the Techdirt formula for years. It's great to see it in action.


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  • icon
    hij (profile), 15 Nov 2017 @ 12:22pm

    Too bad google is associated with it.

    Unfortunately, the name google is anathema to the people who need to read this. The report will likely be ignored simply because it has that name attached to it.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 Nov 2017 @ 1:53pm

      Re: Too bad google is associated with it.

      When you spend so much time being a bitch that label soon comes out to stick to ya...

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 Nov 2017 @ 2:02pm

      Re: Too bad google is associated with it.

      You make a good point that I skipped because obvious.

      But just a sec: you're saying that Google can be believed without question? What a confirmation bias YOU have.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 15 Nov 2017 @ 2:20pm

        Re: Re: Too bad google is associated with it.

        "But just a sec: you're saying that Google can be believed without question? What a confirmation bias YOU have."

        I know reading is difficult, but you should try it at least once.

        reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 16 Nov 2017 @ 1:30am

      Re: Too bad google is associated with it.

      It's a shame, because they will use Google's own stats in similar ways to claim that they need to change laws and force Google to be magically responsible for every site's content. Without noticing a shred of hypocrisy even as the rest of us see it dripping off them.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 Nov 2017 @ 1:59pm

    Great "business model"! Netflix is twenty billion in debt!

    Besides that, Netflix simply isn't possible until high-speed internets are in place.

    Yes, of course Techdirt has been right all along: piracy is inevitable so content producers should just ignore it! No hint that the twenty years of fighting piracy, wiping out major piracy sites has had any effect. It's easy to argue your way, just strike out contrary facts.

    reply to this | link to this | view in chronology ]

    • icon
      Roger Strong (profile), 15 Nov 2017 @ 2:22pm

      Re: Great "business model"! Netflix is twenty billion in debt!

      Yes, of course Techdirt has been right all along: piracy is inevitable so content producers should just ignore it!

      Techdirt has never suggested this. It's simply pointed out that some responses to piracy are more effective than others.

      One response, actually making that content available at a reasonable price, has a very good track record of effectiveness.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 Nov 2017 @ 2:31pm

      Re: Great "business model"! Netflix is twenty billion in debt!

      Can you find a way of distributing entertainment or software that can't be broken, **EVER**? If not, you don't really have a good argument here.

      reply to this | link to this | view in chronology ]

    • icon
      Stephen T. Stone (profile), 15 Nov 2017 @ 2:45pm

      Re: Great "business model"! Netflix is twenty billion in debt!

      Techdirt has been right all along: piracy is inevitable so content producers should just ignore it!

      Yeah, but no. Techdirt has said that piracy is inevitable—that much is true. (As is the “piracy is inevitable” axiom.) But while you claim the site says “content producers should just ignore it”, Techdirt has actually said that content producers should learn to compete with it.

      Offering legal, convenient, and—most importantly—affordable options to accessing content helps reduce piracy. It is not a magic “end it all in one go” solution to the piracy issue; it is, however, the best possible solution short of turning the Internet into a read-only content delivery system.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 Nov 2017 @ 5:11pm

      Re: Great "business model"! Netflix is twenty billion in debt!

      Yeah like the time The Pirate Bay got totally wiped out. Took what three, four whole days to come back from the dead?

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 Nov 2017 @ 6:52pm

      Re: Great "business model"! Netflix is twenty billion in debt!

      Fellate that RIAA phallus! You go, blue boy! Mmmm!

      reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 16 Nov 2017 @ 1:43am

      Re: Great "business model"! Netflix is twenty billion in debt!

      "Yes, of course Techdirt has been right all along: piracy is inevitable so content producers should just ignore it!"

      Strange how Techdirt have never said any such thing. But, since it must have strained you to say something positive about them, I'm sure they'll accept the compliment anyway.

      "No hint that the twenty years of fighting piracy, wiping out major piracy sites has had any effect"

      That's correct, there is no hint that it has. In fact, there's plenty of evidence that merely playing the Whac-a-Mole game and refusing to offer legal services made things a hell of a lot worse before 3rd party legal services stepped in to save them. Glad you agree.

      "It's easy to argue your way, just strike out contrary facts."

      With counter arguments a valid, true points, of course. Whereas you just make your own targets up out of whole cloth, much easier to attack.

      reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 16 Nov 2017 @ 1:47am

      Re: Great "business model"! Netflix is twenty billion in debt!

      Oh, and if the level of debt is an indication of a business's success, you must be very very concerned about the major studios. Go on, look at their finances. Of course, you'll claim this is all because of piracy, while with Netflix you'll claim this is something fundamentally unsustainable with their business model, but intellectual honesty is not your strong suit.

      reply to this | link to this | view in chronology ]

  • identicon
    Dreddsnik, 15 Nov 2017 @ 2:28pm

    "No hint that the twenty years of fighting piracy, wiping out major piracy sites has had any effect."

    That's probably because it hasn't.

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 15 Nov 2017 @ 3:07pm

    When you stop trying to focus on having total control & focus instead on delivering a good product customers respond.

    We don't want the number of platforms we have now, and more are launching as a couple legacy players noticed cord cutting.

    People aren't going to subscribe to 15 services, especially when the one that offers only 1 show you want to watch costs as much or more than the other platforms.

    Content is a "magical" thing that has so many different values depending on who is asking.
    Studios claim its a loss, while reporting record profits.
    Studios tell artists owed a cut, its not made enough yet (ignoring they hit it with a 500 million payout to another arm from the word go).
    Content is hyper valuable, so we need to throw people in jail if they even THINK about seeing a single millisecond of content we didn't get paid for.
    We need different terms so we can pay artists different prices on if its a sale, rental, stream, broken vinyl disc.
    We made $50 on big chunky plastic cartridges, why can't we get that for the plastic discs that we sell more advertising on?
    We demand you only watch how, where, when we allow you to... but we offer nothing to you in return. Pay us and fsck off.

    Dear Industry,
    How much are you spending per pirate?
    What is the ROI from that?
    How much did piracy increase in the same time?
    Had you considered the increase is paying customers who are tired of being treated like shit while you chase those who aren't ever going to pay you?

    The old adage is 'Build a better mousetrap, world beats a path to your door'
    You're building "better" ways to stop pirates, and driving people from your door.

    Stop crying over imaginary dollars you're wasting millions on chasing. Nothing you have ever done has actually worked, and often makes things worse b/c you punish the people paying you not those scallywag pirates.

    You exist to get things to consumers in a convenient way, somewhere along the line you forgot this. The digital age has been here, there is no reason other that stupidity that we can't pay you to get the stories from our childhoods. You need to stop altering and editing them & just work out all of the stupid licensing problems.

    You made the minefield, start putting the effort into getting rid of them before you blow your own legs off again.

    reply to this | link to this | view in chronology ]

  • identicon
    Phreack, 15 Nov 2017 @ 9:56pm

    As another example, Steam just decided to allow Argentina to buy games in their local currency. Sales skyrocketed overnight. It's like companies actually want to fight piracy effectively this time!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 16 Nov 2017 @ 1:37am

    in my opinion, it's not just about having legal options, it's about pricing, release dates, availability as well. in so many instances, the industries want to keep their stranglehold on other businesses that are trying to put out services that the people want and are not available from the industries themselves. but why would they when they can make almost as much by letting another company have all the grief and expenditure but actually are doing nothing themselves

    reply to this | link to this | view in chronology ]

  • icon
    MyNameHere (profile), 16 Nov 2017 @ 2:51am

    Interesting story, but a few things that make it a little less interesting:

    I noticed that piracy isn't down that much. Rather, combined consumption is up. trying to figure out how much is a bit of a pain because the chart has no axis label, no scale. However, it's easy to see at the start that there were a total of about five "lines" of combined use, and today there are seven "lines" of combined use. So essentially, there is 40% more overall use, if you like.

    It also doesn't take into consideration the move away from pure piracy (like file sharing) and on to things like streaming sites and Kodi boxes. Those things have certainly shifted plenty of action away from the old school torrent sites and download sites.

    It seems much more likely that Netflix isn't taking as much away from piracy as it is tapping into a market that didn't exist to begin with, or who are transferring over from cable, video stores, and so on. The decline in piracy (however they measured it) isn't in keeping with the increase in Netflix (remember, 40% more!).

    So good story, but written from the conclusion and worked backwards.

    reply to this | link to this | view in chronology ]

    • icon
      PaulT (profile), 16 Nov 2017 @ 3:12am

      Re:

      That's one way of interpreting the information (in the most contrary and ridiculous way, as is your wont).

      The simple reality is - the market is way too fragmented and dependent on restricting potential audiences for a single provider to make a complete difference. Between format & regional windowing, licencing regimes that leave Netflix with a significantly smaller catalogue than it has in the US, competitors completely blocked from offering their services in Brazil, and all sorts of other things that mean that Netflix only compete directly with piracy on its own productions. For everything else, there's a hundred reasons why people would still choose the illegal route. The availability of Netflix does not magically stop piracy of a title that Netflix doesn't carry, and there will always be people who pirate anyway - the vast majority will pay for a reasonable service, though.

      The major fact remains - for all the bullshit about how there's no way to compete with free, lots of people do pay for Netflix for a multitude of reasons, even as the same content is valuable illegally. That's the main and only point that needs to be stressed to counter the propaganda you prefer to believe in.

      But, you have to make crap up about it only being a market that didn't exist or non-P2P not being "pure piracy" (whatever the hell that means) for some reason or whatever comes into your head, rather than admit the industry is still the architect of its own problems, because that's your game.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 16 Nov 2017 @ 6:08am

        Re: Re:

        So apparently the piracy that plans like HADOPI and six strikes supposedly reduced wasn't actually reduced. It's almost like the resident Prenda fanboy is lying to get a failed devil's advocate point across... Nah, couldn't be!

        reply to this | link to this | view in chronology ]

      • icon
        MyNameHere (profile), 16 Nov 2017 @ 12:40pm

        Re: Re:

        "The major fact remains - for all the bullshit about how there's no way to compete with free"

        Of course your can complete with free, by being just about as free. Netflix price per month is less than half that of a single (legal) DVD buy. The average user right now is looking at an hour and 35 minutes per day of Netflix, which works out to about 15 cents an hour. It is all but free.


        The problem of course is that net net, Netflix doesn't pay that much for each view of the movie to the creators. It's a little cheaper than it would cost to produce physical product and sell it, but the income is also significantly lower. It's better than nothing (piracy) but not a whole lot better in reality.

        "the market is way too fragmented and dependent on restricting potential audiences for a single provider to make a complete difference."

        Exactly my point. The overall market is larger than the start, and piracy hasn't declined that much overall. Piracy (by that chart) is only down a third, it has not dropped like a stone, and Netflix is up almost 4 times as much as the drop in piracy. So there is little to suggest one has transferred to the other, rather that Netflix customers appear to come from someone else rather than piracy.

        "in the most contrary and ridiculous way,"

        Honestly, look at the data. The connection is weak, especially when we consider that in the last few years much of the "piracy" has moved to Kodi boxes and streaming sites. The entire decline in direct piracy could be attributed to that alone. The growth of Netflix is much greater than the drop in piracy, which suggests that there is no direct correlation, perhaps some connection but clearly Netflix has found customers that were not pirates in the way this survey considers.

        "you have to make crap up about it only being a market that didn't exist or non-P2P not being "pure piracy" "

        I didn't say the market didn't exist - only that the Netflix consumers appear to come from somewhere else than P2P piracy (I call it pure piracy, because it's not disguised behind a nice pretty app on a Kodi box or on a slick looking website that may lead consumers to pirate without really understanding what they are doing).

        So the potential is that these consumers signing up to Netflix are cord cutters (Hi Karl) or previous DVD rental customers, or previous DVD buyers, or what have you.

        Remember: Netflix has worked hard to get their app onto phones, smart TVs, game systems, and just about every other potential delivery method. Price is nothing without availability - including decent internet connections to stream it on. Does Brazil (as an example) have unlimited data on mobile devices? That could be telling.

        So unlike you, I am not going to take a pat answer and move on. The numbers suggest something way bigger than a simple move from piracy. If that was the case, the two would be neck and neck on this graph. They are not. So all of that huge gap is something way more interesting and not at all based on the idea of getting pirates to stop pirating online. Unlikely you, I guess, I am curious to see what it is.

        Why aren't you curious?

        reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 17 Nov 2017 @ 4:43am

          Re: Re: Re:

          "Netflix price per month is less than half that of a single (legal) DVD buy"

          Yes, because there's a massive difference between BUYING something and RENTING. Surely even someone with your limited intellect understands that? Just as you surely understand that getting a little less you you ideally wish to get is better than zero. Nobody is going to pay physical purchase rates for a digital one-time stream. Get over it.

          If the marketplace has shifted from purchase model to a rental model that's unfortunate, but you don't change market reality by whining any more than you did when people were starting to view TV at lower per-watch rates than cinemas. You deal with the market that exists, not the one you had a decade ago.

          As ever, your wall of text is just self-righteous ignorance that requires rewriting reality to pretend you have a salient point. You should spend less time writing utter crap based on falsehoods and fantasy, and read up one what the real world and the people you respond to re actually saying. It would be less tiresome for everybody.

          reply to this | link to this | view in chronology ]

          • icon
            MyNameHere (profile), 17 Nov 2017 @ 12:37pm

            Re: Re: Re: Re:

            "Yes, because there's a massive difference between BUYING something and RENTING. Surely even someone with your limited intellect understands that? Just as you surely understand that getting a little less you you ideally wish to get is better than zero. Nobody is going to pay physical purchase rates for a digital one-time stream. Get over it."

            DUH! Considering that people watch an hour and a half a day on average (which is about a single movie length), it would mean that even in the "rental" market they are insanely cheap (about 30 cents a movie).

            It gets back to the question: Why attribute to a shift from piracy when it's clear that the totality of piracy drop isn't anywhere near Netflix increase?

            "As ever, your wall of text is just self-righteous ignorance that requires rewriting reality to pretend you have a salient point. "

            No, just means as ever, you can't be bothered to think past what the TD staff has provided for you. Enjoy your babyfood.

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 17 Nov 2017 @ 7:06pm

              Re: Re: Re: Re: Re:

              Yet when the RIAA claims that the Dajaz1 takedown for five years was a statistical victory for copyright and caused significant drops in piracy, you lap it up like a dying man at an oasis.

              Looks like someone hasn't been weaned from the nipple yet.

              reply to this | link to this | view in chronology ]

            • icon
              PaulT (profile), 18 Nov 2017 @ 4:56am

              Re: Re: Re: Re: Re:

              No, it means that, as ever, your dumb ass erects a straw man whenever you lose the argument people are actually having. Which is always.

              For years, your corporate heroes were telling us they had to strip rights from us because there was no way to compete with free. Netflix shows them they are wrong. Everything on Netflix is available freely, yet millions subscribe. This proves the point people like me were saying all along - people will pay for a good product at a good price.

              What keeps piracy afloat is that the industry insists on not offering things to people. Whether through regional fragmentation, format windowing or other licence issues, the industry refuses to let any one outlet give potential customers the majority of what they want. So they get it elsewhere. It’s proven people will pay, the ndystry simply refuses to let them.

              It’s really not hard to understand, unless you’re either to arrogantly ignorant or paid not to understand. Given your history, I’m going with ignorant. Nobody’s desperate enough to pay for the poor standard of your arguments.

              reply to this | link to this | view in chronology ]

              • icon
                MyNameHere (profile), 19 Nov 2017 @ 8:35pm

                Re: Re: Re: Re: Re: Re:

                Wow, you are hateful.

                Look, the info is right in the story. Why not look at it rather than haul out a bunch of tired ad homs?

                "Everything on Netflix is available freely, yet millions subscribe. This proves the point people like me were saying all along - people will pay for a good product at a good price."

                DUH! NO SHIT. The point you have missed (because you are too busy trying to attack me personally) is that way more people are paying than were pirating. The decrease in pirating isn't anywhere near the increase in paying customers. So where did the customers come from?

                The decrease in piracy is actually pretty consistent with reductions around the world. It's almost certain that some became paying customers, but the number of paying customers largely exceeds any decrease in piracy. It's not a one to one trade. So why?

                So put down the old pre-whacked dead horses and actually think about it. I know it's hard, life with nothing but stereotypes and piracy jingoism is easy. But actually thinking moves you away from your comfortable spot and actually helps you to grow. It's for your own good, grandpa.

                reply to this | link to this | view in chronology ]

                • icon
                  PaulT (profile), 20 Nov 2017 @ 2:26am

                  Re: Re: Re: Re: Re: Re: Re:

                  "Stop attacking me with ad homs. But here's some ad homs!"

                  You are truly pathetic.

                  The reality is not hard to understand, if you apply some of the limited brain power you possess into understanding the real world rather than coming up with silly names and new realities to allow you to escape what's really happening.

                  To put it quite simply - this is not a zero sum game. Some people subscribe to multiple services, some don't. Some both purchase and rent, some only stream rentals. Many people both pirate and pay, in various combinations. Some people have never pirated, but will happily pay for the legal options now they exist.

                  As usual, you're attacking an argument nobody else is addressing. Nobody but you seems to have expected a one to one trade between legal options and piracy. That's something you've apparently made up from whole cloth. What has been argued in the past is that you can't "compete with free", and the success of Netflix and other services handily disproves that. Any lower revenues are the result of a natural consumer-driven shift from a purchase to a rental model, and that's just the reality of the marketplace that exists in the current day. Nobody's going to pay purchase prices for a rental, no matter how much you whine.

                  But, hey, if you want to lie about me personally just to get some cheap shots in while you proudly display your ignorance, go for it. Anyone reading your tiresome crap will know who is actually addressing reality and who is a pathetic contrarian troll, and they know you are on the wrong side of that coin.

                  reply to this | link to this | view in chronology ]

                  • identicon
                    Anonymous Coward, 20 Nov 2017 @ 7:12pm

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    As usual, you're attacking an argument nobody else is addressing.

                    This is coming from the guy who expects to find his remarks in comment threads via search engines like Google.

                    Making arguments nobody else has brought up or addressed is MyNameHere's bread and butter. It's the passive-aggressive love letter to average joe/antidirt's "y u no debate me masnick, diaf".

                    reply to this | link to this | view in chronology ]

                    • icon
                      PaulT (profile), 21 Nov 2017 @ 12:51am

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      I like to debate him, if only so that anyone lurking who might be swayed by his initial claims aren't fooled. In this case, while it's true that the figures don't support that specific claim, it has to be noted that nobody but him made that claim to begin with, and the evidence handily proves the actual argument that was being made in reality.

                      It's silly that we have to introduce honesty into every argument, but when you have someone seriously complaining that people don't pay the same for a Netflix sub as they would have done to buy every title they watch outright on DVD, you have to make sure they look as ridiculous as they are.

                      reply to this | link to this | view in chronology ]

  • icon
    Unknown to Me (profile), 16 Nov 2017 @ 9:54am

    Basic Idea

    It is possible that most people are basically honest. I have no proof, but I suspect that is true. What is definitely true is that there are a of people struggling daily to make ends meet. So, it seems to make sense that, if given a reasonable choice, some people who presently pirate TV shows and Movies might chose to pay the reasonable cost. I know, this flies in the face of capitalism, but I kinda like this idea and am going to stand by it. Does that make me one of the idiots that believe something without proof? (laughing)

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 16 Nov 2017 @ 5:26pm

    Even if you buy their shit legally, they'll destroy the internet, legally and illegaly.

    Don't give them money.

    Don't buy their shit.

    reply to this | link to this | view in chronology ]


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