[Another guest post to fill the breach as I’m on vacation this week. Today’s piece is by Pat Patterson. – AC]
Ultimately, we have Lars Ulrich of Metallica to thank for Netflix and its knockoffs. Follow my mental wanderings and tell me if I’m on to something or out to lunch.
Lars killed the original Napster–or at least had a big role in its demise. I submit that Napster was the method by which the general public became comfortable with digital media piracy. Napster started with music, and the sins of the record business got people into downloading something they didn’t pay for in a way that didn’t even feel like stealing. From there, it was a simple step to stealing other media they felt was overpriced. They quickly became comfortable with that, too.
Napster, however, was horrible for viruses, bad metadata, incomplete files, and other shortcomings, all of which prompted some geeks to turn to IRC and then torrents. The thing about torrents is that the more people sharing the media through the torrent, the faster it is. Geeks told their friends and word got around. Soon, non-geeks were involved in the theft party.
People who began taking single songs were now not just scooping entire albums, but an artist’s entire catalogue in a few clicks. Just ten minutes of browsing offered a world of possibilities. Movies, TV shows. Software programs. If it existed digitally, you could find it on Pirate Bay or any one of its variants.
Steve Jobs recognized that piracy was killing the music industry, which is when he chose to spring iTunes on the labels. Caught with no workable digital distribution strategy, they had no choice but to acquiesce to Jobs’ terms. The labels no longer had absolute control over how music was purchased and decimated.
Then came the streaming services start appearing. For ten bucks a month, consumers gained access to quite literally all the music in the world (well, with a few exceptions–at least at first). Yes, it was essentially renting music, but that was a small trade-off in exchange for on-demand access to a nearly unlimited library of music. Piracy still exists, but at rates far lower than what we saw earlier in the century. There’s a straight from Lars taking on Napster to today’s Spotify.
Now let’s turn to other media. Movie studios made even better villains than the record companies. Premium cable channels like HBO became targets, too. Torrents took off.
As the web got faster and people bought more bandwidth. Streaming, not downloading, began to take off in the form of cheap Android boxes that scour the Web for material, leading to the beginnings of massive numbers of people cord-cutting.
Netflix saw what was happening and gave up on the video rental market. Cable and movie producers pushed hard on the “downloading is illegal” message, sending out a few threatening letters to get people to stop and maybe come back onto the legal side of the fence. Some did, but others looked at Netflix, which cost less than $10 a month for guilt-free on-demand viewing.
Boom. Netflix began raking in the eyeballs.
Blockbuster, Rogers Video and virtually every other video rental stores are dead. Cable companies were left standing with their mouths open wondering what happened.
Streaming companies put consumer demands first–i.e. a la carte on-demand selection–and the public responded.
Now a future spoiler alert. Greed shows its ugly head again and the big media companies decide to muscle back in. Exclusive content becomes the name of the game and they start taking their rights back from Netflix and opening their own streaming service (Hello, Disney!). Will the price to watch five or six shows and a few movies go back up to the levels of what the premium cable companies were charging? Will there be rationing of content by territory? If that happens, it’s back to Google and uTorrent to get shows and movies in a couple of clicks.
It shouldn’t be easier to steal something than it is to buy it legitimately. The music industry finally learned that. Let’s see if Hollywood understands that.