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Netflix’s Concerns: Dark Web and Piracy

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Illicit marketplaces sell Netflix’s account access at cheap rates

The “dark web” is a major area of concern for Netflix (NFLX). The Internet is a huge market for illegal activities. Cyber security is becoming more important in today’s virtual world. The dark web ensures that a user’s IP address isn’t traceable. Due to the anonymity associated with it, there’s currently a marketplace where “every possible service and every possible flavor you could think of was being made for sale,” says Intel Security CTO Raj Samani.

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Account login credentials 

According to a report from McAfee Labs, dark web prices for account login credentials in the online content space are between $0.6 and $1 for online video streaming, $7.5 for premium cable channel streaming services, $0.55 for premium comic book services, and $15 for professional sports streaming.

Peer companies like Amazon’s (AMZN) Web Services, Time Warner’s (TWX) HBO Go, and Spotify are also susceptible to these attacks. The existence and increasing popularity of the dark web will negatively impact Netflix’s revenue. Genuine users’ accounts could also be suspended if suspicious activities are tracked in their respective accounts.

Piracy impacts Netflix

Netflix also needs to prevent the piracy of its content. Currently, the firm is investigating the recent 4K-quality rips of its content. Another area of concern for Netflix is the unauthorized access of streaming services form paying customers. For example, a paid subscriber in the US accesses content in India through various types of networking hacks. This activity is negative for Netflix.

Netflix accounts for 5.1% of the First Trust Dow Jones Internet ETF (FDN) and 4.7% of the First Trust ISE Cloud Computing Index ETF (SKYY).

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