• Freedom
  • Innovation
  • Growth

The Content Industry Kept its Promise

Streaming has become the main way most Americans consume movies, TV shows and music today, and the transition has been rapid and disruptive. Hollywood and the streaming services have been much in the news lately, with writers and actors striking over issues including the compensation changes that streaming has introduced into the content economy. 

Some consumers feel overwhelmed with the number of streaming services and with trying to remember which show or movie is available on which service. We find ourselves with multiple subscriptions to multiple services, and even some cable-cutters are finding that the amount of money they spend each month is equal to or greater to what they used to spend on cable and video on demand (VOD). 

I myself at some point constructed a spreadsheet to keep track of shows I was watching and meant to watch, because I couldn’t remember which services hosted them. Sure, laugh. Then I discovered that there are services like JustWatch that will keep track of these kinds of things for you, as well as keeping track of where you left off in a given show, something else that has occasionally challenged my addled brain. 

These are, of course, First World problems of abundance, but this abundance was by no means inevitable. Not too long ago the content industries were in a crisis. Music was first on the chopping block, with music piracy on an enormous scale resulting from the digital revolution. 

Now, I’ll confess to being one of the guys who would record LPs onto cassette tapes and give them to my friends back in the before time. That was piracy, and it was illegal, but it was analog, and thus didn’t really pose an existential threat to the record companies. 

Digital recording, on the other hand, meant you could make an unlimited number of perfect copies, and the Internet meant you could distribute a single perfect copy almost infinitely. As a result, the music industry’s revenues plummeted. And as available bandwidth increased, it became possible to do the same thing with video files and movies. 

Somewhere near the low point for content piracy, in 2007, the Institute for Policy Innovation (where I work) estimated that the loss to the economy from copyright piracy was as much as $58 billion in GDP and over 375,000 jobs. 

Some apologists tried to justify their piracy by blaming content companies for not making products available in a convenient and affordable digital format. In the pirates’ view, piracy was justified by the content industry’s refusal to come to terms with the new digital economy. No longer could record companies require you to buy an entire LP when you only wanted a single song, or withhold films for years before re-releasing in theaters.

Now, this is an oversimplification, and it took some time, but eventually, the content industries said, “look, if you will allow us to protect our copyrights, we will deliver and make content available in convenient, affordable digital formats.” This involved various technological solutions, including forms of digital rights management protection (DRM), consumer electronics standards for digital connections and cables, updates to copyright law and passage of the Digital Millennium Copyright Act, and other measures. All of this was controversial and none of it was perfect, since there is no perfect law or regulation. 

But here’s the point: The content industry kept its promises. The music industry made digital music affordable and available for consumers first through Apple and then through various services. DVDs and then Blu-Rays of TV shows and movies flooded the market. And then, when enough broadband was available, everything switched to streaming, where no physical media was even necessary. 

I don’t know what the solution is to the streaming wars, or the fact that there are too many streaming services and most of them are apparently not making money. I don’t know if the theatrical business will ever fully recover from Covid. Markets and consumer choice will work all that out. But in the midst of all this we should at least recognize that all these problems caused by an abundance of available, affordable content is because the content industries kept their promises.

blog comments powered by Disqus