In a recent letter to its shareholders, Netflix addressed its growing concerns with Popcorn Time, a popular app that provides online streaming of pirated movies and television shows.  Available across every major computer and smartphone operating system platform, the app is so popular that it is often called “the Netflix for pirates” because of its easy access to illegal entertainment content.  Currently offered in 50 countries, Netflix seeks to expand its service internationally to reach 200 nations.  With its sharp rise in popularity and streaming in the Netherlands, Popcorn Time has proven to be a threat to Netflix and its international expansion strategy as it is highlighted under the letter’s “Competition” section.

At a whopping 1.3 million downloads and installations from its less than 17 million population, the Netherlands is Popcorn Time’s second-largest market as of September 2014, trailing just behind the United States which has 1.4 million installs.  The app is also popular among other large economies, such as Brazil, United Kingdom, and Australia.  In most markets where Netflix is available, however, Google data reveals that Netflix is much more popular than Popcorn Time, except the Netherlands.  Popcorn Time’s increasing popularity is a threat because free networks, although illegal, tend to spread rapidly and go viral across the globe.  Take for example, Napster, the infamous illegal music source that spread like wildfire across college campuses, and Pirate Bay, the Swedish export that was raided by police in December 2014.

Signed by Netflix Chief Executive Officer Reed Hastings and Chief Financial Officer David Wells, the letter signifies the realistic threat of pirated media against the entertainment company.  The executives state, “Piracy continues to be one of our biggest competitors.”  Since around 2005, Netflix has been publicly making this statement against piracy, but with Popcorn Time’s sharply increasing popularity, however, the threat is becoming a reality not only to Netflix’s international expansion strategy but also to its domestic subscription domination.

Since its inception, the Internet has exponentially increased access to data across the globe.  With this accessibility of information, however, comes the burden of illegal content.  Even with copyright laws in place, the law has done little to extinguish or limit this problem, a solution to which requires innovative approaches.  The impossibility and inability to police and enforce against every incident of copyright infringement, which occurs at an immense frequency, ultimately renders the law moot.  Taking big hits from piracy daily, the entertainment business is in desperate need of copyright reform now more than ever.


Bio:     Linda is a Staff Member of the Journal of High Technology Law.  She is currently a 2L and Trustee Academic Scholar at Suffolk University Law School with a concentration in Business Law and Financial Services.  She holds a B.A. in Political Science from the University of Connecticut.


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