Why torrents and pirate sites do not pose a threat to Netflix. On 29 April a group of hackers, who took the alias thedarkoverlord (“Dark Lord”), announced that it has acquired the fifth season of the series “Orange — hit of the season” a month before the official release. The hackers have issued an ultimatum.
Either Netflix pays the amount of classified, or the next season of “Orange is the new black” appears on the torrents. Thedarkoverlord managed to crack the server of Larson Studios, which specializiruetsya on post-production of TV series and movies, having captured ten series of the show. On the page of the hacker group on Twitter has reported that the pirates also managed to get the content of the other channels (Fox, IFC, ABC and National Geographic), which will soon appear on the file sharing.
Who is next on the list. FOX, IFC, NAT GEO, ABC and. Oh, what fun we're all going to have. We're not playing any games anymore.
. After the emergence of threats, all ten episodes of the fifth season appeared on The Pirate Bay, and the link was posted on the page thedarkoverlord on Twitter. In a message posted on Pastebin (now removed), thedarkoverlord expressed outrage at the fact that Netflix ignored their threats.
The message was written. “We are ashamed to breathe the same air with you. We were hoping that you, as pragmatic businessmen, will see and understand the advantages of cooperation with reasonable and compassionate people”. Alias thedarkoverlord met previously in other attacks, including the hacking of the supplier of the U.S. Navy or the attack on a branch of charitable organization “Red Cross” in Indiana in, United States.
The hackers erased all the data from servers and backup servers of the company, demanding 50 bitcoins (2.5 million rubles at the exchange rate on may 4, 2017) for information recovery. The organization refused to pay the ransom. Companies are increasingly becoming victims of cyber attacks, in which hackers threaten to publish or to remove confidential information. Hackers using special malicious programs encrypt the information on the victims computer and block access to the data while the hacker pays the ransom.
The reason for such break-ins lies in the insufficient level of cyber security in the industry. Although the giants like Netflix and Fox are investing millions of dollars in a multilevel system of protection, they still have to rely on other studios that cant afford serious protection from hackers.
The pirates and had laid out the Netflix content on the file sharing, but torrents are unable to cause substantial harm to the company. The base of Netflix subscribers grew from 44 million in 2014 to 99 million in 2016. The profit of the company for the accounting period has grown almost three times and amounted to $8,83 billion in 2016.
In 2011, BitTorrent accounted for 23% of the daily volume of Internet traffic in North America, according to the Global Internet Phenomena report from the manufacturer of Internet equipment Sandvine. In 2016, this figure fell to 1.73%, and the share of Netflix rose to 35,15%. The share of file sharing in the global Internet traffic is at around 5% it is the only component of Internet traffic, the growth of which in the future is not predicted, according to Cisco Systems. Over 15 years, Adobe Systems Photoshop was sold at a price of hundreds of dollars per copy of professional photographers and designers.
The company could not effectively combat piracy — only in 2012 it has been activated 55 million unlicensed copies of Photoshop, according to Adobe. Today the set of applications Adobe Creative Cloud is only available through subscription, and the transition to the new business model resulted in a financial success for Adobe — for the third quarter of 2016, the companys profit rose 28.6% to $1.46 billion. We have tried numerous solutions over the last 15 years, and all have proven to be ineffective. The top management had lost all confidence in the effectiveness of anti-piracy AT. To achieve success in the Adobe was a need for fundamental change — we began to look at piracy as a business problem.
However, not all companies working with content, the transition to a business model with the subscription was successful. Many music services have suffered serious losses, because it is expected that the bulk of revenues will be revenues from banner and audio advertising.
Now, when most companies abandoned the business model with advertising, streaming services have started to make a profit, and the musicians are more willing to cooperate with them. The more groups there are to join services like “Yandex.Music” and Apple Music, the less music piracy according to the Agency Muso, in 2016, the attendance of sites with illegal music fell by 6%. Sites that allows you to watch pirated movies in the browser, are more popular than torrents. Muso reported 77,7 billions of visits to these sites in 2016.
Although these sites are attractive torrents, their popularity is gradually reduced. According to media analysis Dan Rayburn of consulting Agency Frost & Sullivan, there will always be a small group of people who only pirated content and not willing to pay even a small amount for a legal alternative. However, most users are motivated by convenience — especially when the price of a monthly Netflix subscription does not exceed the cost of a few cups of coffee.
According to a study by the American Press Institute, American Millennials are ready to buy content. Movie, TV and music are the priority. 77% of respondents paid for legal movies and TV shows.
According to the Muso, in 2016 the number of visits pirate movie websites 5.6 times exceeded the same indicator for websites with illegal music. Here lies another problem. The Studio in the pursuit of profit do not release new movies on services like Netflix. They want to keep the income from the cinema, and would prefer to transfer old film to iTunes or Amazon where users will be able to rent it for a short period of time.
Large movie studios are not willing to cooperate with the streaming services, which caused billions of dollars of investment in Netflixs production of original content available only to subscribers. “Netflix management realized that they can invest the earned money in their own studios, not to spend money on licensing other peoples films and have less material of higher quality which everyone will love Netflix,” said Mr. Rayburn.