Evolution of Streaming: From Netflix's Rise to Resurgence of Piracy

Tracking consumers’ return to digital media piracy

Netflix introduces “Watch Now”

Netflix invented the modern concept of web streaming long-form content when it launched “Watch Now” in early 2007. Streaming was a totally new way for consumers to watch entire movies. Instead of purchasing a DVD or watching something on TV, users could now watch the content they wanted on demand. Six years later, Netflix released its first original series, House of Cards, to great acclaim. Producing original content became a way for Netflix themselves to avoid the cost of licencing content from other providers.

Figure 1: Since Netflix released “Watch Now,” Infegy Atlas has tracked over 1.2 billion mentions across social media over the last fifteen years. Netflix pioneered original series starting with House of Cards in 2013.

Torrenting peaks prior to Netflix launch

Bittorrent technology was a distributed way of downloading heavy, primarily copyright-infringing movies and other large files. The Pirate Bay became the most popular website to find torrents to download. The launch of Netflix’s online streaming service coincided with peak Bittorrent usage. As legal streaming provided by Netflix got more popular online, consumers torrented fewer and fewer movies. Netflix became a one-stop-shop to watch movies online. Netflix became so successful at driving people away from piracy that many news outlets declared media piracy officially dead.

Figure 2: As Netflix and other streaming providers grew, Bittorrent file sharing and mentions of The Pirate Bay dropped between 77% and 91% from their peak in 2007.

Other services join streaming industry

Watching Netflix’s success, other large conglomerates began their own video streaming services. Amazon Prime Video became the first of many copycats. Creating a streaming service has become even more popular over the last five years as Peacock, Paramount Plus, Disney+, and countless others have joined the industry.

Figure 3: Encouraged by Netflix’s success, other streaming providers began expanding. Prime Video and Hulu were early movers in the space.

Impact of surplus streaming services

Usually, more competitors entering the market means more choice, lower prices, and better consumer experience. In the case of streaming services, the consumer experience actually diminished.

As each company entered the market, they produced original content or acquired licensing rights such that content could only be viewed on their platform.

Customers get burned out

Soon, media libraries got fragmented across platforms. For example, Netflix lost The Office to NBC’s Peacock.

Additionally, prices have gone up, meaning consumers are paying more money to receive the same content options as before.

Figure 4: As more providers moved into the space, content became more and more fragmented. These word clouds show increased mentions of free trials and cancellations, suggesting that video streaming customers are more likely to churn.

Customers return to piracy (streaming)

As a result of this fragmentation, consumers have returned to privacy. Instead of torrenting content like they did in the early 2000s, they now stream on websites like 123Movies, AZMovies, or Putlocker clones. Illegal streaming sites have seen a 114% post volume increase since December 2018. Post-volume growth attached to Virtual Private Networks (VPNs) or tools consumers use to hide IP addresses, have seen a 47% increase during that same time frame.

Figure 5: As customer frustrations mounted, mentions of illegal streaming have also grown, shooting up 114% over the last 4 years.

Solution: Tracking illegal content online

Infegy Atlas can help copyright holders by tracking the spread of illegal content online. As a top social media intelligence platform, Infegy Atlas can look at the aggregate levels of illegal content to measure which sites are most responsible for links. Additionally, Infegy Atlas can dive to the post level to save links for rapid Digital Millennium Copyright Act enforcement.

Figure 6: Using Infegy Atlas, we tracked the domains most associated with sharing illegal copies of Top Gun: Maverick online. Despite social media companies’ best attempts, links to copyrighted material spread online rapidly after the movie’s release.

How can you use this information?

Consumer behavior and insights

Use consumer intelligence to learn about how consumers are accessing your media content, and use that to guide your pricing decisions.

Brand management

Use consumer intelligence to monitor your market’s reception of new business pivots (i.e., response to adding advertising to a streaming platform like Netflix).

Key Takeaways on the Streaming Industry's Trajectory

Netflix's Streaming Revolution: Netflix launched "Watch Now" in 2007, revolutionizing content consumption with on-demand streaming. It popularized the format further with original content like "House of Cards."

Decline in Piracy: Netflix's success led to a massive decline in Bittorrent usage, reducing media piracy by over 77% by providing a legal, one-stop streaming solution.

Streaming Market Saturation: Inspired by Netflix, numerous platforms like Amazon Prime Video and Disney+ entered the market, fragmenting content and increasing customer costs.

Consumer Frustration and Return to Piracy: Fragmented content libraries and higher prices have driven consumers back to illegal streaming sites, as evidenced by a 114% increase in related activity since 2018.

Leveraging Social Media Intelligence: Tools like Infegy Atlas help monitor and combat illegal content online, providing valuable insights into consumer behavior and brand reception.