The Solution to Piracy? Streaming Services Show the Way

The Australian Senate passed legislation to block overseas websites that contain copyright infringing material

The Australian Senate passed legislation to block overseas websites that contain copyright infringing material. Photo: Flickr

The Government Passes Anti-Piracy Legislation to Block Overseas Piracy Websites

Streaming Wars: Netflix Takes the Lead with Impressive Numbers

Game of Thrones Sets New Piracy Record (Yes, Again)

With all the media coverage that the Government’s hastily-passed site-blocking legislation’s been getting over the past few days, you could be forgiven for thinking that we were in the middle of a national piracy crisis.

The topic’s been a popular one in the press for a good long time now, with the focus fixed on how Australians rank on the world stage – by measuring how much copyrighted content we grab via dubious means. If you take some reports at face value, we’re all obsessed with grabbing what we want, whenever we want, just as long as we don’t have to pay for it. It’s an assertion that’s rarely, if ever, questioned. Just what is it about Australia that makes us so fond of “piracy”? It’s a question that’s rarely asked. The assumption is that for many Australians, actually paying for creative content is simply a big no-no. We want it now, and we want it for free.

Or do we?

Numbers Don’t Lie

Netflix has managed to gather over one million Australian subscribers

Netflix has managed to gather over one million Australian subscribers. Photo: Netflix

Almost at the same time as the passing of new laws aimed at blocking access to popular overseas web sites that host links to “torrents” of movies, TV shows and music, a very interesting set of numbers showed up. Roy Morgan Research released the results of the first survey showing how many Australians have taken up subscriptions with the batch of new streaming video services that arrived with much fanfare this year.

Extrapolating their results from a survey of 2,088 Australians, Morgan produced estimated subscriber numbers for global juggernaut Netflix, Fairfax/Nine startup Stan, the Foxtel-owned Presto and veteran Australian service Quickflix. They also included Foxtel’s “Play” service, arguably on a different playing field as it streams live channels rather than on-demand content. The numbers are staggering.

Stan and Presto both had solid starts to their ventures, with just under 100,000 subscribers each – a decent audience for both, given that neither of them have yet made easy-access apps available on the majority of consumer devices (Stan recently added support for Apple TV, Presto for Samsung smart TVs; more support is on the way for both). Quickflix, possibly hamstrung by a model that includes a pay-as-you-watch “premium” tier, managed half that. Netflix already had an estimated 300,000 Australian subscribers watching via VPNs and similar services, but after only a couple of months of Australian operation has managed to gather over one million subscribers. It’s an astonishing result, one made possible by Netflix’s long history of operation in the US; no matter what device customers might want to watch Netflix on, Netflix has a mature, fully-featured app ready to go. But it’s not just an ease-of-use thing that’s driving such a sudden spike in demand.

Piracy, Explained

The reason we pirate, some say, is twofold: price and availability

The reason we pirate, some say, is twofold: price and availability. Photo: Netflix

Behind the scenes, there has been intense lobbying of governments for years from the content industry, where the focus has been single-minded: “piracy is illegal, piracy is a problem, piracy must be stopped and prosecuted wherever possible”. The new legislation passed this week exists thanks to content industry lobbying, and unsurprisingly, they’re well pleased to see site-blocking now enshrined in law. No surprises there – after all, no business is going to be content to sit idly by and watch potential customers consume their product without paying for it. But there’s a question they never seem to address – why are Australians in particular so fond of hopping on board the pirate ship to get hold of their favourite shows, movies and music?

The reason, some say, is twofold: price and availability. Australia has long been something of a backwater to global content creators, who traditionally have been perfectly happy to delay releasing TV shows, movies and even music here until it suits them. And when they finally do get around to it – if at all – they’ll often take advantage of the fact that pricing in Australia has traditionally been inflated (iTunes music downloads, for example, are around 75% more expensive here). Or the price inflation is done in a different way – such as with Game of Thrones, which has become something of a banner example for those arguing the reasons why people pirate. With the Australian rights locked in by Foxtel, it was removed from the Australian iTunes store in order to give people only one choice if they wanted to pay to view the show, a non-choice many resented due to its cost.

None of this justifies piracy, of course, but it goes some way towards explaining why it happens – and surely, rather than beating people about the head with the naughty stick, content owners might find themselves better off in the long term if they looked more closely at what drives people into the world of dubious downloading in the first place.

Bottom Line

This week’s Netflix numbers bear out the argument that if people are given the option of legal, attractive and affordable access to content, they will take it. Netflix has a broad range of content, effortless accessibility, US-parity pricing – and the very same first-run original programming the rest of the world gets, such as House of Cards and Orange is the New Black. They arrived in Australia with one simple pitch: legal content at a price everyone can afford, available to anyone with an internet connection. No messing around with torrents and media players and codecs, just fire it up, pick your show or movie and press play. Netflix makes money, the owners of the content it provides make money, and customers feel they’re getting genuine value.

That big million-and-rising number represents Australians saying “see, all you had to do was show us a little respect, and we’re sold.”

It’s that sort of respect for the consumer – without whom none of this content would have been produced in the first place – that is the real “magic bullet” against the piracy problem. Netflix has gained a hefty lead thanks to its profile and various ISP bundle deals, but the newcomers are running with the same customer-centered philosophy and are growing their businesses at a solid rate that will likely accelerate quickly. Much is made of the new anti-piracy laws driving people “underground” – to VPNs and the like – but the companies behind the streaming revolution are showing that if you treat people like the global citizens they are, they’ll hand over their cash in a heartbeat.