Apparently Piracy Drops Whenever Netflix Launches in New Markets

Shelley Palmer notes that Netflix’s chief content officer has a novel way to battle piracy.

Netflix’s chief content officer has a novel way to combat online piracy: give people easy and affordable ways to access content. In an interview with Stuff, Netflix content chief Ted Sarandos said that “the best way to combat piracy isn’t legislatively or criminally but by giving good options” and observed that “when we launch in a territory the Bittorrent traffic drops as the Netflix traffic grows.”

Why is this not obvious to everyone? ‘Piracy’ (aka unauthorized distribution) is largely unmet demand. Simple economics tells us that the best way to solve the problem is to meet the unmet demand and then piracy drops.