I am confused – why did it take ten years to compete with file sharing?

Netflix just launched its streaming service in Sweden. Call it the Spotify for movies and TV. What blew me away was the PS3 application that delivers almost instant HD streaming video in 5.1 surround sound. Easier than file sharing. Legal and sustainable. Only problem is, it should have existed ten years ago. What I am wondering is why Hollywood dragged its feet for so long.

Some ten years ago I watched a video clip from the an event or conference organized by mp3.com, the company that got sued to smithereens by the big record companies for its "locker" service – what Apple "reinvented" as iTunes Match ten years later. MP3.com's founder Michael Robertson was speaking and I recall him saying something that rang so true it stuck in my mind.

Robertson stated that the only way to beat file sharing was to offer a better service and experience than file sharing websites and software could. The simple reason being that consumers are lazy, and while they will not pay for being harassed and being forced to watch stupid trailers and idiotic messages against "movie theft" on their bought DVDs, they will gladly pay for ease and reliability. File sharing isn't capable of supplying both.

It's taken Hollywood and the media mafia, as I like to refer to them as, ten years to heed that advice. And I am not sure if they have, even now.

I'm seeing a change now as Spotify gains more and more market share and the Netflix streaming service offers a superior experience compared to downloading torrents. Not to mention the fact that it's sustainable. Movies won't be made unless someone pays to watch them. Filesharing isn't sustainable but it was needed. It was the kick in the butt the greedy media companies needed to at least try and get their act straight.

Netflix teamed up with Spotify to offer their service for free until the end of the year for those who are Spotify Premium subscribers. A smart move as it will let them reach an audience that's used to paying, and who favors easy access over wasting time chasing down torrents and waiting for things to download. Anyone capable of thinking in terms of alternative cost will realize that file sharing is usually a waste of time. But until now it has still been easier than buying pieces of plastic over the counter. Or the price of online content has been high enough to motivate people to overcome the hurdle of personally chasing down movies and TV shows online.

So as I turned on the PS3 app I was impressed. I saw what I've been wanting to see for years. A service that won't cost a fortune (79 SEK or €8 per month) and offers an experience that would take hours to create on your own by downloading files, organizing them, setting up your personal media library.

For me, this is another nail in the coffin for the mafia like group of media companies that own almost all labels and make their fortunes out of nowadays mostly brainless "Hollywood movies". It took them ten years, screaming and kicking, to actually deliver what people wanted. In the meantime, people have moved on. Kickstarter has started undermining the role of the record company as an investor in potential artists. People no longer want to be spoon-fed, pay up and say "thank you". And most of all, people don't want to give their money to someone who uses it to sue teenagers out of their college fund.

Let's hope for the continued downfall of "Hollywood" and the continued success of independent, and individual media, provided and experienced the way we personally prefer and want it.

Update: Here's an interesting article by Robinson on why record company contract terms will prevent Spotify from ever being profitable. And in extension, doom Spotify or any other service that would benefit them and their customers, resulting in the self-fulfilling prophecy that makes them stick to old outdated business models while the world passes them by.

Tuesday, October 16, 2012 - 20:30

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Welcome to my blog. My name is Jakob Persson and I'm an entrepreneur and consultant. I work with companies to create measurable change by focusing on users, customers, market strategy and pricing. I'm a deep and broad specialist-generalist with skills in business strategy, digital marketing, pricing, interaction and service design as well as project management and software development.

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