It has been said that piracy almost always indicates consumers that are not being served properly. Not one to miss a free market research opportunity, Netflix representatives have said the company is using torrent sites to monitor the most popular television and movie downloads. With that information, the streaming giant can see what titles are in high demand and decide whether or not to add them to its service.

As Netflix opens up its doors in yet another area of the world - this time the Netherlands – the company's Vice President of Content Acquisition Kelly Merryman admitted to local press that Netflix's offering is partly based on what shows do well on pirate and warez sites.

“With the purchase of a series, we look at what does well on piracy sites,” Merryman said.A prime example of this, she said, is the company's decision to offer the television show “Prison Break” in the Netherlands. "’Prison Break’ is exceptionally popular on piracy sites," said Merryman. “We also see what movies are popular in the cinema and what the television ratings are.”

It is a no-brainer for Netflix to use this readily available information to its advantage, especially when it comes time to sign licensing deals with television and movie studios. Netflix can entice executives to either sign a deal that will distribute their studio's content to an already massive built-in audience, or risk losing money to piracy sites. The problem remains, however, that studio executives are not thrilled to turn over their content for a less than desirable fee to a distribution channel that they do not control.

“Certainly there’s some torrenting that goes on, and that’s true around the world, but some of that just creates the demand,” Netflix CEO Reed Hastings said.

“Netflix is so much easier than torrenting. You don’t have to deal with files, you don’t have to download them and move them around. You just click and watch.”

If Netflix can keep their pricing reasonable while offering greater content choices, it is perfectly feasible to believe illegal downloaders would pay a few dollars to have all of their content in one place. At least that is what Netflix is banking on.