/// Is Internet Killing the Video Star?
iPad image copyright Skylines My career in digital media started at a pivotal moment. The year was 2001, and the U.S. Court of Appeals for the Ninth Circuit had just upheld an order for Napster to begin identifying and removing copyrighted songs from its music file sharing service. I was hired by a young startup that had recently changed its name from CDDB to Gracenote to help Napster use music recognition technology to comb through millions of tracks to find copyrighted works from the labels that it had to remove. Napster was the first of its kind, providing music fans with easy and free access to albums and tracks and giving them a reason to avoid buying expensive CDs — the lifeblood of the music industry’s business. The ability to share files around the globe reduced the barriers to music discovery and allowed Napster users to find new artists and songs in ways never imagined. It was a truly disruptive service, and it scared the hell out of the music industry. Instead of embracing the massive adoption of this new service, finding a solution to accommodate the changing landscape or harnessing Napster as a future platform, the music industry held onto its rigid CD-based business, prayed that file sharing would go away and eventually tore Napster down. Today, you can draw several parallels between the music industry in the late ’90s and early 2000s and the TV industry today. Viewing habits are changing. Just like music in the early 2000s when young adults started turning away from physical media and opting for singles versus complete albums, viewers are “tuning in” very differently to movies and TV programming. Today, if Netflix were part of a cable package, it would be one of the top viewed networks, according to a Facebook post from CEO Reed Hastings . Meanwhile, Nielsen recently reported that cable cutting is up by 150 percent since 2007 , marking a significant shift in viewer behavior. Additionally, Aereo CEO Chet Kanojia is now assuming the role of Shawn Fanning by intimidating the cable companies with a disruptive service that lets viewers access broadcast programs at a much lower cost than cable packages. But, instead of adapting to changing viewer behavior, the cable companies, Hollywood and broadcasters are holding onto old business models for dear life and calling the lawyers. Sound familiar? Avoiding a Bad Sequel: Lessons for the TV Industry Ignoring or fighting digital consumer behavior is a recipe for disaster — resulting in rejection faster than an unpalatable creation by a contestant on Hell’s Kitchen. It’s time for TV broadcasters, content creators and advertisers to innovate their businesses instead of maintaining existing models through threats and litigation. First, they need to understand that their viewers are setting the rules and defining the life expectancy of their programming and services.
Is Internet Killing the Video Star?