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Popcorn Time Might Actually Be Good for Netflix

By Adam Levy - Mar 19, 2014 at 10:29AM

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Netflix for pirates may actually help the real Netflix get better content.

You know, sometimes the movie you want to watch isn't on Netflix ( NFLX 2.10% ), or Amazon.com ( AMZN 2.80% ) Instant, or iTunes, or Hulu, or your cable's On-Demand service, or even at the closest Red Box. In search of the instant gratification that we've grown accustomed to, a casual movie watcher may transform into a nefarious digital pirate almost as quickly as it takes to load a film on Netflix.

Now, one piece of software has made it easier than ever to stream movies unavailable on Netflix.

It's called Popcorn Time.

The ironic thing about Popcorn Time is, despite providing an alternative to movie streaming services, it might actually help Netflix acquire more quality content.


Source: Wikimedia Commons

The rise and fall ... and rise of Popcorn Time
Popcorn Time started when Sebastian, a designer from Buenos Aires, wanted to make downloading movies as easy as watching them on Netflix.

At its core, Popcorn Time is nothing more than a bittorrent client with a snappy user interface. For those less tech savvy, though, downloading a movie through bittorrent can be a cumbersome process. Popcorn Time takes away all of the pain points associated with typical torrenting and gives users what they want: specifically, movies not available for streaming legally anywhere else.

Although it's come under legal scrutiny, nothing about it has been found to be illegal yet. The creators warned, though, that downloading copyrighted movies may be illegal where you live. (Duh!)

By midweek, the installer was removed from hosting site Mega for unexplained reasons. It could have been by request of suits in Hollywood or it could have been at Mega's discretion. By the time the weekend rolled around, the Popcorn Time team decided the limelight wasn't for them and decided to shut down the project and move on with their lives.

But Popcorn Time lives on. The open source project was taken up by other developers that are distributing the software on an alternative website.

Popcorn Time is legal ... they checked four times
There's nothing about Popcorn Time that's technically illegal. The software doesn't access a host server for movie files. Those files are stored on home computers spread throughout the world. Additionally, the creators aren't financially benefiting from pirated content in any way -- no ads, no premium service, no fees.

Popcorn Time is merely a front-end solution for a problem that's plagued the movie industry for years. If it hasn't been able to shut down other bittorrent clients, it's not going to shut down Popcorn Time.

But even if the MPAA did shut it down, it couldn't stop the dozen alternatives that will surely pop up in its place if history is any indication. When the RIAA successfully shut down Napster, piracy didn't end -- it flourished. Kim Dotcom, the founder of Mega and its predecessor Megaupload, noted, "Ultimately, it's a cat-and-mouse game Hollywood can't win by force, but only with smarter Internet offerings."

That's where Netflix comes in
Netflix is the smarter Internet offering. At least, it's one of them. It's more convenient and less risky than downloading a pirated movie. What's more, the company claims that it sees a drop in piracy rates in each new country it enters.

What people want is access.

That's especially true outside of the U.S., where theatrical releases are often delayed and movie selection is generally much poorer on streaming platforms like Netflix. HBO's answer to its show "Game of Thrones" becoming the most pirated television show was to increase legal access to it abroad. It's still the most pirated show, but more people watched season 3 legally than seasons 1 and 2.

Should Popcorn Time cause a notable increase in illegal downloads, the movie industry ought to start licensing more premium content, especially abroad. It could also do away with the window restrictions it believes are supporting physical media sales. Then it might see a significant drop in piracy.

Meanwhile, Netflix should be able to attract more subscribers and cement its position as the No. 1 movie streaming service. Its content selection would be unmatched by the alternatives. Netflix will happily pay the movie industry to take care of its problem.

Netflix could even become the medium of choice for premiering films. Chief Content Officer Ted Saranados mentioned his interest in bringing major movie premieres to Netflix. While it seems unlikely to materialize in the U.S., it may be just what the industry needs in smaller international markets where viewers would usually pirate the film before it's in theaters locally.

The best defense is a good offense
For the movie industry to combat piracy, it needs to embrace technology. Popcorn Time doesn't offer any new content that wasn't available already. It just made it easier to access that content.

And it's just the tip of the iceberg. There's tons of innovation going on that would make bringing down a file sharing network virtually impossible for the movie industry.

Hollywood can get ahead of the problem, though, if it embraces technology instead of fighting it. Providing more and better content to Netflix, or creating its own premium service could seriously dampen piracy. Unfortunately, the MPAA would rather spend its money fighting technology instead of using it to take back some of its lost revenue.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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