How Netflix knows who wants to watch what

To find out what people will pay to download, find out what they are torrenting illegally

Toby Melville/Reuters

Netflix recently revealed how it knows which TV shows and movies its subscribers are dying to watch: It snoops around the dark corners of the Internet, looking at file-sharing websites and purchasing the shows that are most popular among the legion of online pirates.

When Netflix launched in the Netherlands last month, Kelly Merryman, the company’s vice-president of content acquisition, told a reporter that her company purchased Prison Break partly because of its popularity among the Dutch torrenting crowd.

The savvy play on the online zeitgeist earned Netflix praise for creativity, just the latest good press for the company that’s exploded in Canada since its 2010 expansion.

In that time, BitTorrent traffic north of the border has halved, a sign that customers are willing to pay for online streaming. Optimistic analysts suggest Netflix’s valuation could soar to $75 billion before 2020, almost four times its current value—a bounty that pirates can only dream of.