Netflix CEO says torrent piracy in Canada down 50 per cent

Jesse Brown on the video streaming service’s impact on illegal downloads


(Mike Cassese/Reuters)

Netflix CEO Reed Hastings dropped a surprising statistic during an interview with Dutch website Tweakers last week, as he made the rounds promoting the launch of Netflix Netherlands.

When asked if Dutch viewers would switch from piracy to Netflix, Hastings said sure, some will switch, and that piracy helps “create the demand” for easier, legitimate ways to watch video through the Internet. Pressed for examples of markets where Netflix has actually brought about a decrease in piracy, Hastings pointed to Canada. Here, he claims, “Bittorrent traffic’s down by about 50 per cent since Netflix launched three years ago.”

I asked Netflix where Hastings got that figure from, and while they declined to confirm it as his source, their press flack did point me to Sandvine, a Canadian firm that researches such things (Sandvine, it should be noted, also make software that lets ISPs throttle Bittorrent traffic).

I couldn’t find any Sandvine research supporting Hastings’ numbers. But there is a 2012 report, which some interpreted as a sign that torrent traffic is dropping as services like Netflix rise, a conclusion others in turn disputed.

What is indisputable, though, is that Netflix is a huge success in Canada. Three years after its launch, 20 per cent of English-speaking households subscribe to the video streaming service. Exactly what this means is, again, a disputed matter.

Yesterday morning on CBC’s The Current, CRTC head Jean-Pierre Blais was asked why traditional broadcasters should be forced to kick back a third of their profits into CanCon TV when Netflix does not. The CRTC wisely decided not to regulate Internet content (how on Earth would you?) and must therefore dance a jig to explain how this new kind of TV is not like the old kind. Nobody suggested to Blais that Canadian viewers are dropping cable for Netflix, but he went ahead and answered that question anyhow:

“The fact is, we have found no evidence that it’s displacing (cable and satellite). It’s from people who are doing ‘double screen’ or ‘enriching’ or ‘catching-up’. “

This is an evasion at best. It’s true that cord-cutting hasn’t occurred en masse as some have predicted; those with cable or satellite subscriptions rarely forego them, although this has begun. The real trouble for our cable and satellite providers are those who never had cables to begin with. Young consumers, taking on their first apartments after streaming and pirating video in their bedrooms and dorm rooms, are ignoring the existence of $100+ premium cable bundles.

So, once the boomers are gone, who will subsidize The Bachelor Canada? Or better yet: why should anyone? Have the intentions of mandatory CanCon TV spending drifted so far from the reality that the whole scheme should be scrapped? And if they are scrapped, shouldn’t we also kill the laws that prevent foreign broadcasters from owning Canadian channels?

These are the questions that nobody in the system—not the broadcasters, not the production companies, not the CRTC—wants to ask or to answer. Ignore them for long enough, and services like Netflix and Bittorrent will render them all moot.

Follow Jesse on Twitter @JesseBrown


Netflix CEO says torrent piracy in Canada down 50 per cent

  1. When we moved house a couple of years ago, we looked at how much satellite TV we watched, and figured out it wasn’t worth taking with us (it was maybe 2 or 3 hours a month). Broadcast TV viewing had almost completely been supplanted with Netflix or other Internet based activities.

    Coupled with the poor video quality of ExpressVU and generally horrible presentation of news and sports events, we have not missed it at all…

    • Do you still watch sports? If so, where do you find it now that you’ve disconnected your cable? We’ve been debating doing the same thing (it’s hard to justify paying a large bill each month and only watching 2-3 channels) but were looking for a way to be able to continue to watch hockey and football.

      • There are many sites that you can see sports on. If you want to see live CAN coverage, you will need to get a VPN provider so that your computer lookslike its from the US (US IP address). This costs very little.

        • That’s awesome! Thanks for pointing me in the right direction.

        • There are tons of free proxy sites that can do this. If you get the message “Oly available to USA”, a minor distraction to use a US proxy. Ditto Canada.

      • every home gets cbc. you will always have hockey night in canada.

        • And most good CBC content can be watched over the Internet. I often watch Fifth Estate this way.

        • Unless you live in Southern Ontario, where CBC has abandoned all of it’s old analog transmitters.

      • Over the air antennas are once again a very good option now that Canada has made the digital changeover. In Montreal, I could get about ten or so channels over the air—all in HD—with a small antenna inside my apartment. If you are watching sports that air on broadcast television (e.g., Hockey Night in Canada), then you don’t really need cable. It’s a bit more problematic, though, if you want live sports that are cable-only.

        • I’ve been considering that option. I’ve heard the picture quality is quite good too.

          • Better actually. The local off air isn’t compressed and isn’t encrypted so most often the local off air signal is better than cable or a DSL. So generally, you will get a better signal off air than the error ridden cable system.

            Best part too is off air, the HDTV signal isn’t encrypted so you can use PC PVR cards that can record content. So connect the PC PVR card to the TV and enjoy.

      • A little known secret. Go to Walmart and pick up a high gain HDTV antenna and get your channels for free. Most Canadians and local channels now broadcast HDTV for free. Once you have it working, Call the cable company and cancel outright. Then connect your PC to the TV and use Netflix. Many newer TVs even have this built in to no PC/tablet is needed. My TV can play movies off the Internet or from any device in the house.

        Even thinking of ditching the phone for A/V Internet Phone options.

      • Might be a big time secret, not sure, but if you find an internet service provider that sends it signal via cable (we’re talking the kind that you screw onto the back of your TV), like Eastlink, and not over the telephone lines, then you can get basic cable by splitting the incoming connection to your tv before it gets to your modem without having to pay a thing. You’ll only get something like 50 channels, but there are a couple sports ones in there.

    • Me, Shaw just upped my rates. So I wrote the CEO a letter. In a nutshell, I asked for a 30% reduction or I will cancel TV outright. Even sent a picture of my PC connected to the TV and with an explanation of why cable TV is a dead and over priced business model we no longer need. Gave him 60 days to fix my price downward or I will disconnect cable TV to save $$.

      And I mean it. As our channels are in a 5 year re-run…with very little new content coming in but for some C grade 50s content.

  2. Cable deserves to die if you ask me. The most coddled part of Canadian
    broadcasting, live sports broadcasting, or I should say the
    rebroadcasting of live sports, isn’t even affected by Netflix, but
    predatory cable service is driving me to find online alternatives.

    Cable producers keep spewing additional sports channels, Sportsnet O, W and P, Sportsnet One, Sportsnet 360, TSN 1, TSN 2, TSNJets, etc. all the while whining about declining ad revenues (hello you are competing with yourself!). To watch the last winter Olympics you had to surf back and forth from CTV to TSN to TSN2, never knowing which was broadcasting which event.

    Viewers are forced to subscribe to every new channel that gets launched because, aside from marquee sports events,
    there is no predictability about who will broadcast other sports (for
    example NBA basketball) or where they will decide to broadcast a
    particular game. We either have to buy all access tickets to particular
    sports, or 3 or 4 packages that each are loaded with channels we don’t

    • Or just not watch sports (I know; anti-Canadian! But I watch next to none…)

      • As my ability to play depreciates, my interest in watching grows. In 20 years I will need to subscribe to the 24 hour mini-putt channel in order to feed my obsession. ;-)

        • LOL! Though it’s not my thing, it would seem you are far from alone.

  3. What proportion of Canadian Netflix viewers use the DNS-server workaround to access American content?

    • I don’t but it sounds interesting; a sizeable portion of the movies I look for are not available in Canada but seem to be in the US. If they want to up that market penetration level, more content would go a long way…

      • There are also rare exceptions where they only offer certain content in Canada and not on the US Netflix. So really you get the best of both worlds using a DNS proxy.

    • I don’t but I’ve heard good feedback from friends who have. I like the fact that Netflix offered Canadian shows and movies so we decided against trying to access the American content.

    • I do. There’s so much more on American netflix than Canadian. Since Netflix is only $8/mo and teh DNS service is only $4/mo, $12/mo rather than almost $100/mo essentially gets me cable TV.

      • Sounds like a good idea, Cory. Where do I get the $4/mo DNS service?

          • Thanks, Cory. I’ll check it out pronto.

    • You guys would like it — just $7 a month or so extra (I think) and super-easy to use. Netflix might do well to have scalable access in the USA too. I figure that’s why they aren’t blocking this, which they could easily do. DNS proxy I use is called blockless .

  4. I was hanging on to good ol’ analog cable since it was the cheapest way to get the programming I wanted and worked with my computer-based PVR. After finally being forced onto the free DTA-boxes, and the drop in image quality, I wondered why I would continue to spend over 80$ for the service I hardly used. I cut the cable, put the next month’s 80$ investment to: a good indoor antenna (15 HD channels shared using existing cable wiring with a slight modification), a subscription to a DNS-server workaround, subscription to Netflix and Hulu Plus. Plug missing holes via iTunes, Library borrowing, streaming from channel’s websites.

  5. I don’t doubt that piracy has dropped since Netflix came to Canada – I know that my own use of “less legitimate” media sources has dropped dramatically since I got Netflix. It’s cheap and very convenient, especially when combined with game consoles (so many households already have a Wii, XBox, etc. that can run Netflix) and/or set-top boxes (we love our AppleTV). The only time I wish I had cable or satellite is for sports, specifically CFL (go Riders!) – TSN and/or the CFL seem to have their head(s) in the sand when it comes to streaming live games in Canada. I’d gladly pay a few bucks to watch a Riders game live, even if I might regret watching them throw the game away in the last quarter… :)

    • Yeah what’s with the CFL and TSN? Both act like they’re from the Stone Age. No wonder their fan base has been stagnant for decades.

      • No need for change, really. Televised sports don’t have an online problem to be solved in the way other shows do; fans insist on watching live, so selling that audience to advertisers the traditional way is still very viable.
        In fact, reality programming is in part an attempt to duplicate that for a different audience – sports for a primarily female audience, if you will.

        • I can watch Bundesliga, Premier League, NFL and NCAA games far more readily online than CFL. There is one CFL app by the CFL itself – dozens if not hundreds for the others. My son and I go to CFL games (Argos, defending Grey Cup champs) and watch with never more than 22,000 others in attendance. I grew up in Seattle (Huskies 70,000 attendance, Seahawks 60,000 attendance), with due respect sir, the CFL does not know how to market football.

  6. Television had a a good 100 year run. As Jesse points out, anyone born in the last decade will look at it like we now look at cassettes, black and white video and video game cartridges. As Tobyornotby points out, Live sports is the only thing propping this dying medium up. Rogers/Bell et all owning sports teams is an investment in ensuring that they continue to remain the gatekeepers… can’t say I balme them though, it’s legal, and lucrative.

  7. Torrent is certainly not a good thing, but how long does it take for those priates to steal $3.1 billion worth of files?

  8. When I can pick only the channels I want to watch and pay for, and not have to have 20 french channels that I can’t even understand. Maybe then I will have some sympathy for the cable and satellite companies.

      • Videotron has experimented with it in Quebec, as well. The big problem is that it isn’t really all that much cheaper than just getting one of the packages. Of course, being on a pretty limited budget, I survived happily on a combination of over-the-air antenna and streaming websites and never bit the bullet—with all of the various fees, it still would have been like $40 a month for a pretty basic package, and that was on top of the $40 I was already paying them for internet (I think the “special deal” for subscribing to both would have cut like $3 from my total bill).

  9. I don’t torrent because there’s stuff on Netflix I’d rather watch.

    That being said, I’m probably going to end up Torrenting a few shows that are actually on Netflix but end up being so behind schedule, or missing seasons for years, that I’ll end up having the show spoiled (like The Walking Dead and Dexter).

    If I have to do this too much with too many shows, I may end up just torrenting everything.

    This means that in order to protect their revenue, companies like AMC should work on getting their stuff on Netflix sooner than later. Making paying customers wait so long is threatening this revenue stream.

  10. Dear Mr. Blais: I most certainly dropped my cable for Netflix. I’m not just “enriching” or “catching up”. Then again, I didn’t stop torrenting, either. Current TV I get via torrent, older stuff I get via Netflix.

  11. I cut the cord a decade ago but because of my OS choice I cannot use netflix so I continure to torrent amd stream all of my TV. If netflix used a form of DRM thay is compatible withy OS I would check it out but they do not want to support my OS so I will not support them.

  12. I dont use Netflix nor will ever do. quality is super crap on my TV compared to Torrent. If I wouldnt have kids, TV would be out the door for us as we mainly watch American series.

    • If you don’t use Netflix, how would you know about Netflix’s video quality? Even on the 5meg DSL at my old place I still got full 1080p HD video. Either your internet sucked, or you had too many other happening at the same time or you had your user profile settings changed to default to lower quality. I only ever had problems with Netflix when there was something wrong with my DSL.

      • who said I didnt used it ? I used the 30 days trial they give from time to time. I do have a 25mbps connection and everything is fine. and no I didnt use the lower settings and used the so-called “Super HD” when it was availble, still, it sucked.

        • As somebody who has been a network engineer for a small Canadian telecom, I’ll stand by my diagnosis. Either your internet sucked and you didn’t get it checked out, or “UR DOIN IT WRONG”. The years spent climbing the ladder from tech support to network engineer makes me bet the most on the second one. :-)

          • thank you mr engineer. but again you’re wrong on both point. so thank you for your inehrent so-called-engineer support.

          • OK then. Offer something more plausible than “Netflix sucks” to explain your supposed problem that would explain why HD works just preachy on a tiny 5M downstream ADSL2 connection but didn’t work on your much faster 25M VDSL connection.

          • I never said Netflix sucked, I said quality sucked. totally different. the product is good and they offer a wide variety of tv show & movies but the quality is just not there for me.

  13. BAHAHA what a load of bullshit netflix canada sucks balls

  14. Bachelor Canada can’t sell as we don’t have enough viewers to support the stupidity. You get 25+1 unemployed arts, personal trainers and consultants without clients, a few with dead end jobs, maybe one or two winners, call it Bachelor[ete] or Big Brother…

    They are all losers. A waste of time to watch other peoples social problems.

    Reason piracy is down is people can get NetFlix and not stuck with 5 year Movie Channel reruns for CRTC backed monopolistic cartel like inbreed Canadian media. Eer notice how one channel shows a movie, then 3 mothhs later another channel “premiers” it. Than another as the same media company marches the same movie through the channels it owns? Yet they charge $100+++ and you don’t even get all the channels?

    NetFix is a much better value, and on demand with a much better selection. Nothing Bell, Rogers, Tellus and Shaw would love more than to kill NetFlix. Its why they all wanted a 10,000% markup on per gigabit rate charges. Most countries like China, Japan offer GB unlimited to the home for a faction of the cost, but CRTC says we have to prop up the monopolies to make our lives more expensive.

    Fact is Netflix has the right product, isn’t bound to CRTC cartel practices so we can afford to be honest.

  15. The only channel I will miss is CPAC when I cancel my cable TV next month.

    CPAC is sure a good way to condition yourself for a good night sleep by going to bed sleep drowsy. As so much of CPAC is about people saying so little with far too many words and self important repetition.

  16. I can attest. I used to download en masse movies and tv shows with many a “cease and desist” letter until Netflix. Now with an American DNS and a Canadian DNS, I get the best of almost all North American TV and movies and cancelled my cable TV almost 6 months ago. We have never ever looked back. Actually have to stop and think about what we enjoyed about cable TV??? Definitely not the commercials or the outrageous prices of the on demand movies and shows they offered. And if you’re lucky enough to own the right hardware or TV to use HULU or other various streaming “Netflix like” offerings off an American DNS, then the sky is the limit.

  17. I dropped bell like a bad habit. I went with explornet internet service for under sixty and netflix for 8 and some change a month. I get all my news off of the internet and entertainment off of netflix. I live in north eastern ontario and have never been happier with dropping bell satellite waste of money and time. Having to pick packages with aload of channels you dont want for one channel you do what a rip off

  18. People in rual areas shaw direct satellite has a deal if you have not had cable for x anount of months. They will give you a reconditioned receiver and a satellite and 12 channels for free yes free. Because of the Gov. switching from analog to digital

  19. What happened to my comments?

  20. where are my comments going?

  21. Torrenting is down cause everyone’s waiting to see the outcome of Voltage vs. several thousand J. Does.

  22. I haven’t had cable TV at home for over 15 years and my Netflix along with digital over the air has made pirating a complete non-issue in my household and I’m not the only one. And I’m not some young tween jut getting his first apartment … 40 is looming on the horizon, I have a house and a 2 year … same with my friends, they all (more recently, last 3 or so years) have cut cable out of their home and this is a pattern that will only increase with time.

    The only thing I reproach of Netflix is the serious lack of French content. I like my shows in English but I would like to expose my 2 year old to more French shows. It’s not that big a deal but it would be nice.

  23. “Bittorrent traffic’s down by about 50 per cent since Netflix launched three years ago.” … Ahem. That is likely more to do with Demonoid going “offline” than people adopting Netflix.
    This whole industry is going through a renaissance and the final chapter will likely be cheaper content for consumers.

  24. There is never anything to watch on Canadian Netflix. They never get your profile right and the movies are way outdated and old. The TV series are years behind… example…Homeland is still onSeason 1, Season 3 is on TV right now and in fact almost done so where is season 2 on Netflix even…etc. etc. etc…..boring boring boring …blah blah blah.

    And Pan Am and others like it. What is the point of running a number of series that never even got off the ground.
    I say step it up and stop falling asleep at the wheel or someone may come up and pass you. … I sure hope so anyway because this just doesn’t cut it.

    And what ever happened to Titles such as Boardwalk Empire, Game of Thrones and the Borgias. Not the generic one but the real one. And the choice of
    British programming is pathetic if not non existent.

    • Game of Thrones and Boardwalk Empire are HBO shows, they aren’t available on any other service but HBO or HBOGo, which requires a cable subscription. I agree that a lot of Canadian Netflix is outdated though.

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