This post was originally written for a college assignment. Students were to pick an industry and a technology, then defend why the technology was the industry’s biggest disruptor. A 500 word limit was enforced.
The entertainment industry faces many challenges, both internal and external, but the largest problem from the world of digital culture was the foundation for online piracy brought about by Napster, as well as the solutions learned from dealing with it. Pirating before the internet took more effort, since a pirate needed to produce physical copies of material. However, legal acquisition of entertainment also was challenging, since legitimate releases weren’t centralized and required knowledge of music in order to find. Napster solved these problems by having two small but significant ‘selling points’, besides the fact that it was a free service. First, it provided one large catalog for people to check for any music needs, whether it be mainstream, niche, or even not officially released. Second, it let people get music from the comfort of their houses instead of forcing them to a record store or forcing them to scour the internet for music. Torrenting, download repositories, and all other major routes to obtain content illegally all take from Napster’s initially original yet now universal ideas. Apple even saw these simple problems as well as the fact that people who used Napster actually bought more music than those who didn’t (so there was demand to buy) and implemented solutions for them in iTunes, making Napster a direct influence in the now largest music marketplace on the globe.
Nowadays, centralization is now not a problem, seeing such services as Spotify, Amazon, and Netflix. However, convenience is still affected in the form of aggressive Digital Rights Management (DRM). For example, I expect that my ~$500 monitor should play whatever I want to, but Amazon has decided it’s not “HID compliant” and refuses to show me an HD stream. Suddenly, there’s a much bigger reason to resort to the convenience of pirating. In contrast, companies whose primary audience is a niche market are forced to provide convenience or else face company failure. Case in point, in the past 10 years, the very niche Japanese animation (anime) market in North America has significantly shifted its main methods of distribution. Currently, there are a few companies that stream episodes of shows within 24 hours of their Japanese air time. There is almost no anime that’s too mediocre or non-mainstream to license, as there’s enough consumer interest and low enough cost to buy any license you can touch. This is because companies are able to gauge interest in a show as it’s streaming and decide on actual physical releases later, instead of having to produce physical content upfront and risking a failure and loss. The Japanese comics (manga) market also adapted in response to piracy and stopped publishing physical copies in favor of digital distribution. This allowed them to catch up to Japanese releases (they were anywhere from 2-10 volumes behind), which was one of the main reasons people pirated their material. The lessons learned from Napster’s success are still relevant, and companies that follow these lessons earn respect and loyalty from consumers.
EDIT 6/18/2016: Preface was updated.