Is this how Netflix does it?

Highly doubt that its true

That's smart but at the same time in a way doesn't make sense. Because half the time I wanna watch something, I have to find it elsewhere because it's not on Netflix.

That's not even close to true. What's popular on piracy sites is typically new releases or even things that are still in theaters. Most of the time what's on netflix is either really old, absolutely bombed at the box office, or is a knock of a popular movie. Currently while the movie San Anderas, about an earthquake in California, the equivalent movie on netflix is 10.0 earthquake, which is (you guessed it) about an earthquake in California.

It isn't true. It'd be full of porn/nudity related movies lol