Why Netflix Isn't Worried About Internet Piracy

In an interview with Stuff magazine on Wednesday, Netflix Chief Content Officer Ted Sarandos made a bold claim: he says his company is actually hurting pirate sites. "When we launch in a territory," Sarandos said, "the Bittorrent traffic drops as the Netflix traffic grows."

If Sarandos's claim is right, it means Netflix, at least on the anti-piracy front, is handily outpacing longtime rival HBO. HBO has had a longstanding problem with piracy; their critically-acclaimed fantasy epic "Game Of Thrones" has been pirated more than 4 million times, making it the most pirated show of the year in 2012.

Sarandos's explanation for why Netflix drives down piracy is optimistic. "I think people do want a great experience and they want access – people are mostly honest. The best way to combat piracy isn’t legislatively or criminally but by giving good options."

At $7.99 per month, Netflix does seem like a better option, all content equal, than HBO, which requires a cable subscription and costs more than double on most carriers. No wonder HBO is considering spinning off this streaming service, HBO Go.

That higher price may be motivating people to pirate. Though, according to Variety, over the past several weeks, 20,000 House of Cards episodes have been shared over the Pirate Bay, it hardly touches the number of times HBO's "Game of Thrones" has been illegally downloaded. (Though some of the makers of "Throne" take the piracy as a compliment.)

But it does show Sarandos's solution to piracy isn't completely airtight. Still, the situation may be better than even those 20,000 pirated copies suggest; Variety notes that many of the pirated copies of House of Cards come from overseas, in countries where Netflix isn't available. By that logic, Netflix just needs to expand aggressively outside the U.S. -- which it's been doing.

Read the entire Stuff interview here.