Competition for Netflix over the last couple years has ramped up and one way consumers can only hope they will not follow is cracking down too much on piracy.
Napster is the great historical digital media example of what happens when consumers become the criminals.
However, with existing services like Disney+, Hulu, and Apple TV+ already threatening Netflix’s hold on the market along with a few more streaming platforms launching in the near future, it seems that cracking down on password sharing is one way in which Netflix will try to level the playing field.Is This a Desperate Move by Netflix to Keep up With Disney+?
Sure, Napster is gone. But in large part Spotify has become the new, legal Napster and the traditional physical music model is well past six feet under. Consumers don’t buy (much) physical media for music any more. The same is already happening to movies, but to a lesser extent.
Netflix started — for those who remember anyway — as a better Blockbuster video (today reduced to a single nostalgic act store). You could rent movies and have them sent to you in the mail inexpensively. Streaming would need more years before people had the bandwidth in their homes to make it worthwhile. Netflix started in 1997 and it wasn’t until 2010, a mere 9 years ago that they went after streaming as the ultimate buffet movie concept: binge watch what you want for one low price.
That low price has steadily increased over the last decade. To the point that our family now is edging toward $20/month. We’ve watched the content library shrink while the price has gone up. Yes, Netflix has a lot more original content now and it is still king of the hill with TV series, but the massive movie library it once had is fading fast.
In fact, we watch more movies on Amazon Prime than Netflix. TV series, Netflix is still #1, but it’s going to be dethroned there too eventually as more and more competing services come out. Disney+ already dominates the movie theater, with something like 40-50% of the box office revenue. They’ve got Pixar, Marvel and Fox and of course their own massive library. And, for now, they have offered consumers a great low price for their Disney+ streaming service.
We shouldn’t kid ourselves that when/if Netflix falters, Disney+ will raise their price and lock up more of their content. Consumers need Netflix and others to remain a competitive force to business check Disney+ or else.
Piracy crackdown is the worst way for any of these streaming giants to compete. They will turn off consumers who time and again are out here paying for content in different formats. I think some are tired that we had VHS, then DVD, then Blu-ray and now … 4K UHD (someday 8k …) It didn’t work for music and it won’t work for movies.
Though piracy might make a comeback, it does so in a substantially different online environment than the one at the turn of the millennium. The hard lesson that the film and music industries learned the first time around is that fighting piracy in court is a foolhardy endeavor. You cannot scare people into not pirating things, you can only offer them better alternatives. Perhaps the bundle makes a comeback, but unlike traditional cable, the costs don’t become bloated and prohibitive. But that’s wishful thinking.Piracy Is Back
If a movie doesn’t do well in the theater there is still some chance to make money on the physical media secondary market but not by continuing to create new formats to buy essentially the same content. That market is eroding and increased focused on treating your customers as crooks could be the perilous path Netflix chooses.
Napster hunting, if you will.
The battle with Napster also instilled an image of the music business as grasping and arrogant. “Even today, the music sector are perceived as control freaks, living in the old world and trying to hold back innovation,” says Smith. “Obviously, that is not the case, but that image still haunts us today. That is one of the biggest downsides of what happened with Napster.”
I’m not advocating piracy as a solution. The solution is and will always be creativity. But don’t kid yourselves thinking that the music business and movie business situation aren’t related (cough! popcorn time cough!)
Since August 2019 when we jumped on board the Regal Unlimited plan as a way to legally watch more movies in the theater. This is a great plan, but fear it won’t last because how long before the movie studios want to have their own deep(er) cut of the buffet movie theater pricing? Greed kills more big businesses than common market sense.
The people who pay — your customers — are not the people you want to target. Just ask Metallica, who took a major publicity hit because of their stance on Napster. It didn’t hurt them that much financially, because they are content creators (Netflix!), but the underlying message from fans was wallet backlash to the industry as a whole.
Visit any Best Buy today and you won’t see aisles and aisles of CDs any more. Their movie section isn’t as large as it once was either.
History has shown that cracking down on fans — restricting, reducing, legally attacking — for any sort of creative endeavor doesn’t — and probably never will — work.
My Advice for Netflix
Here’s my 2 1/2 rusted pennies advice for Netflix: find creative ways to lower your streaming prices (pricing higher for less is business suicide), focus more on producing quality original content instead of as much original garbage as you can buy and, finally, spend whatever money is left convincing the studios that it’s better to partner with you — an established streamer — than trying to cut the pie into (gasp) more streaming services.