Netflix Sets its Prices According to Local Piracy Rates

By Maddie Stone on at

If you live in a country with a lot of piracy, you probably enjoy lower monthly Netflix subscription fees. That’s according to Netflix CFO David Wells, who says that a country’s piracy rate is the primary factor determining the service’s local price.

Netflix, with over 60 million subscribers globally, is a giant in the world of online video entertainment. Its biggest competitor is, in fact, piracy. But as TorrentFreak reports, Netflix treats online piracy like any other source of competition, using statistics on illegal downloads to determine not only what types of content it should offer, but also, local rates.

“Piracy is a governor in terms of our price in high piracy markets outside the US,” Wells explained. “We wouldn’t want to come out with a high price because there’s a lot of piracy, so we have to compete with that.”

It’s an interesting strategy that may speak to why the on-demand streaming service has seen so much success in recent years. Piracy isn’t going away, and if you can’t stamp out your competition, better to make it as unattractive as possible. [TorrentFreak]