Is piracy dead? Netflix ransom attack a bitter pill for hackers

Last week, hackers released episodes from the unaired season of Netflix’s original show Orange Is The New Black, after Netflix refused to pay a ransom to prevent the leak. The hacker (or hackers), under the moniker “thedarkoverlord”, stole the episodes from post-production company, Larson Studios.

Yet despite the show’s cult following, the hack has been widely labelled as a failure, suggesting the hackers misunderstood how streaming and the internet works today.

In just a few years, there has been a rapid change in the way we watch content in Australia, and with this has come new opportunities for cybercriminals to capitalise on new technologies. According to network equipment company Sandvine, back in 2011 BitTorrent accounted for 23 per cent of daily internet traffic in North America, and production companies weren’t happy. Subsequently it became harder and harder to download free content, with the likes of Pirate Bay and Kickass Torrents changing their domain every other day, not to mention the multitude of nasty malware lurking on torrent sites. However, people were accustomed to accessing content for free without having to ever leave the house. The stage was well and truly set for the entrance of Netflix — a cheap, safe, easy and legal way to stream content from the comfort of your own home. By 2016, the true power of streaming services to undercut the pirates’ activity made itself clear, with BitTorrent traffic down to just 5 per cent.

This provides insight into a bigger lesson in how the internet has shifted away from torrenting. The fact that streaming services offer a vastly superior alternative to piracy at a low price resulted in the Orange Is The New Black leak having little to no impact for Netflix. After all, people will still pay their subscriptions, even if they pirate the episodes. This alone was perhaps the hacker’s greatest error — unlike transactional video on demand (TVOD) services such as iTunes or Google Play, you do not pay for individual episodes with Netflix — it’s included in a reasonable monthly fee. The inconvenience and danger of illegally accessing torrented content is now enough of a disincentive to prevent people engaging with it.

So has this lack of interest in torrenting these leaked episodes shed light on the idea that piracy is dead? And how much of a role have subscription video on demand (SVOD) services like Netflix played in that demise?

Hedging its bets

The Orange Is The New Black leak has answered a lot of these questions for us. While these cybercriminals have released 10 of the 13 episodes of the next season, Netflix will be releasing the full series itself in a month. There is always going to be that small pool of diehard torrenters who will pirate the content without a second thought. However, it was not worth its while for Netflix to pay the ransom to prevent such a small cohort from watching the leaked episodes. Few of those torrenting the episodes are unlikely to ever be Netflix customers, so there really is no loss there, and those who are willing to pay their dues to Netflix will at a minimum watch the missing last three episodes on Netflix anyway. Netflix has instead hedged its bets, rather sensibly too, on the fact that most people will patiently wait it out until they can watch the full season comfortably and legally on wide-screen TVs in 4k HDR, together with the rest of the world, joining the social conversation as they go.

The Netflix hack is somewhat reminiscent of the 2014 Sony Pictures hack and its attempt to prevent the release of the movie The Interview by threatening to release confidential data. Both cases can be considered in parallel with other “doxware” cases, which involve hackers holding sensitive data hostage until the victim pays the ransom. The primary difference with doxware is that it takes the attack further by also compromising and threatening to release private data. When potentially doxing a movie or TV studio, it might seem obvious to target unreleased content, but as this case shows, the Netflix distribution model, and its inarguable dominance in the global streaming market, may mean that such content is not such an effective target.

Predicting the directions cybercriminals will take next is a pretty thankless task, but whether we see this kind of thing happen more in future will depend on how the victims react. In this case, Netflix did not pay the demanded ransom, so these cybercriminals had no payday and have been ridiculed for their effort. Perhaps that will be enough of a disincentive to others thinking of following in their footsteps? However, the cybercriminals behind this leak claim to also have other unreleased content. If any of that is for release on more traditional broadcast media, the content owner or broadcaster may be more likely to pay up.


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