How Piracy in the 2000s caused Netflix and Spotify
This is a copy of an essay wrote for the IT & Society course I am taking at RPI and as such is formatted as one with citations.
The early 2000s were a strange and wondrous time for the internet. The Dot-Com boom had come and gone leaving a wake of uncertainty for the once thriving industry. With the vacuum caused by the closure of so many companies the internet became a strange sort of no-mans-land. Regulators didn’t know how to manage the new technology1 and investors were too scared to provide funding to anyone who wanted to get into the space. This era gave birth the strange and wondrous world of internet piracy, the distribution or downloading of any copyrighted content without permission. Though illegal piracy became a massive trend, and even a burgeoning industry, with the MPAA stating in 2004 that a full quarter of internet users piratedi.
Piracy and streaming both revolve around content. This is any form of media be it movies, TV, music, video games, e-books, or anything else that can be transmitted digitally in real-time. Ostensibly they form the simplest information system, a graph with two nodes straight from producer to the consumer. But in reality there can be many dozens of intermediate publishers, providers, licensors, and platforms. With the main difference between piracy and legality being which path the information takes, the one that is approved and the one that is not. But with the duality of both the legal and illegal avenues they form a tangled system.
The Jolly Rodger Flies
Piracy is a word with many meanings these days. From the daring swashbuckling sailors that once ruled the seas, to the modern contemporaries who terrorize cargo ships off the coast of Africa. But this digital age has brought change in all forms and with it, of course, digital pirates, who steal from the publishers, labels, and copyright holders and give to the people.
Internet piracy did not become common until mid-2000s and was enabled by the interesting collision of several technical shifts at once. Firstly the famed VHS tape was finally being superseded by the DVD. And while few had the hardware required to watch VHS using a computer, almost every machine at the time was equipped with a disk-reader that could read and rip the data from DVDs. So consumers already had their access to their favorite movies digitally, but how to share them? The rise of broadband internetii in the same time period meant that not only were more people getting online, more of them had connections fast enough to be able to handle advanced multimedia. Gone were the days when a phone call would knock you offline, or when you had to plan your day around download times.
The groundwork was in place and America was ready to spread and share all their digital content. But how did you actually do it? It turns out that there were a lot of ways people went about it. From burning CDs with their favorite songs and giving them to friends, to complex schemes involving hundreds or thousands of people, piracy was a growing phenomenon. Of all the various ways that people shared media, and there were many2, there have been 3 that were most enduring both technically and in the minds and hearts of their users:
Limewire, a name that strikes nostalgia and fear into the hearts of many, was a file sharing program allowing users to easily share any file with anyone else in the world. It acted as both a client and search database for the BitTorrent protocol and let users easily discover and download files. Limewire was such a resounding success that it allowed the formation of multiple companies dedicated to it, most notably it’s developers Lime Group LLC. Famous for being filled with viruses and malware, Limewire was a the perfect illustration of what the newly-reborn internet was like at the time: Dangerous and exciting, filled with the promise of what was to come. Limewire and it’s related companies famously met their end in 2010 at the ruling of Arista Records LLC v. Lime Group LLCiii.
Napster was the legendary grand-daddy of Spotify3. It was easy to use, and more secure than Limewire with a dedicated focus on sharing and playing music. Napster would scan your computer and then provide your MP3 files to anyone who wanted to listen, and in turn would allow you. Napster introduced users to the extreme convenienceiv that streaming media could provide, allowing you to instantly and easily listen to any song any other users’ computer. This early software was one of the first to really demonstrate how users were sharing with each other, not just downloading a file from some unknown and opaque list.
The BitTorrent protocol has proven to be the most popular and enduring of the systems used by pirates. Since it is just a protocol, a standard of communication between computers, BitTorrent itself is actually completely legal and unlike the previous examples it is not a specific piece of software but rather can be used by any program that implements the standard and it’s related components. BitTorrent thrives by being decentralized, meaning there is no central hub. Instead each user connects to all the other users who possess a file directly. This makes it famously difficult to shutdown, with high-profile indexes (sites listing files that can be downloaded using BitTorrent) such as The Pirate Bay being known to only ever be taken down for a handful of days even after a major raid by the Swedish governmentv.
Each of these technologies has something in common, and I bet you can guess what it is. They were easy. Millions of children with free time and no money found that the internet could provide all the entertainment that they could ever want. A generation of children grew up downloading movies from Limewire and listening to music with Napster. But the 2000s are over and this so called Millennial Generation has now grown up, old enough to reminisce about the old days and want something better. More than that, they can pay for it too.
With the wealth of possibilities for people to illegally download content online it comes at a surprise that for years it was nearly impossible to legally acquire content digitally. Somehow piracy was able to provide content more easily and reliably than the publishers themselves.
Publishers were wary of pirates and didn’t want to simply provide digital versions of their content because that could easily be copied and redistributed. This led to the creation of Digital Rights Management (DRM) systems in order to restrict the usage of digital media only to the authorized user. DRM caused a whole new wave of problems due to crackers, people who took it upon themselves to remove DRM from media. DRM was difficult, costly, and ultimately only served to inconvenience the paying user. iTunes famously began selling music without DRM in 2007 causing both a rise in consumer reviews of the service as well as revenuevi. DRM is still today prevalent in the video-games industry and amazingly has become less effective. Crackers see DRM as a kind of challenge and take sport in racing to see who can crack the latest defenses the fastest. Modern DRM software merely acts to delay pirates and ultimately doesn’t solve the problemvii. Even though it is still used DRM has proven to not be the solution that publishers needed.
The industry needed something different. In a strange twist of irony it was a solution that Napster and it’s like had already solved many years prior: streaming.
_n._The transmission of digital audio or video, or the reception or playback of such data without first storing itviii.
The last part of the definition is the key. The ability to distribute content “Without first storing it” made streaming the perfect solution. With high-speed internet becoming increasingly common people no longer needed to rely on media in offline storage. Instead it could be re-downloaded on-demand and from within the controlled environment of the publisher’s application or, even better, website.
The beginnings of streaming also signaled a great shift of power. The death of a king of the media industry: Blockbuster. Even though the internet was growing rapidly, the home video rental industry still dominated the market. Blockbuster alone had several thousand stores around the world and were a staple of American towns. But like many other companies of the era Blockbuster failed to adapt to the new Information Age. Already stiff completion from mail-order and kiosk based rental was only compounded by the birth of online streaming. And while Blockbuster tried to pivot into mail-order and streaming it eventually declared bankruptcy in 2010, and then was bought and slowly gutted over the next several yearsix. It is one single company that is accredited the mammoth act of slaying Blockbuster and taking the crown of the King of Home Media: Netflix.
Netflix began it’s life in 1997 as a mail-order DVD rental service. Instead of having to go down to the local Blockbuster users simply set a queue of movies they wanted to watch and progressively received them in the mail as they mailed back their previous disks. With the user convenience of being able to to everything from home, and without the overhead of brick and mortar stores, Netflix grew steadily over the next 10 years. But the game changed in 2007 when Netflix first introduced their streaming services. As one of the first online streaming platforms Netflix gained an early edge over their competition and rapidly situated themselves as the dominant leader of the industry. Over the following decade Netflix would become a household name and undisputed king of modern media, even expanding into producing their own critically acclaimed productions4. Today for some people Netflix is going so far as to replace cable, and for many young people not having Netflix is a rarity.
While it has now grown into a multi-billion dollar industry the early days of streaming were a strange time. With the sudden growth of the new industry there was no framework, legally, ethically, or financially, to build off of. This led to the growth and even success of some companies who’s start was questionable at best. Specifically I would like to highlight the start of a company called Crunchyroll. Crunchyroll was and is a streaming service dedicated to Eastern media, and is currently most popular service in the space with over two million registered users. But in it’s early days Crunchyroll was more akin to YouTube where users would upload episodes of their favorite shows, often with fan-made English subtitles. Crunchyrool would charge to view these unlicensed user-submitted videos in high-quality. Despite their business model consisting of charging for pirated content, Crunchyroll was able secure over four million dollars in initial funding which they used to legitimizex and establish themselves as the dominant anime-streaming platform, with big players like Netflix and Amazon not competing with them until recent years.
While streaming is still a massive industry, with Netflix alone claiming to take up to 40% of American bandwidth during peak hours, there is trouble brewing. Increased competition and changing technology are rapidly changing the landscape of both streaming and the internet as a whole.
Despite (or perhaps due to) it’s popularity streaming is not without it’s detractors. Many dislike the always-online nature of the system and those with poor internet connections, which includes much of rural America, simply cannot stream at all. Streaming has also become a center point the larger debate over digital ownership. As many companies move towards subscription based payment models many users are complaining that they no longer own their content or software. The days are gone where you simply downloaded it and expected it to work forever. Now monthly tithes must be paid in order to maintain continued use. The offline and unrestricted nature that pirated content provides is alluring to many and for some even distinctly beneficialxi.
Due to advancements in the computing industry streaming has become almost too easy. Anyone technically skilled can create their own bootleg Netflix in a matter of hours and share it for everyone to use. Driven by the modern internet ad-economy5 hundreds of illegal streaming sites popped up, offering a vast array of unlicensed movies and TV with only ads in exchange. Often hosted in countries with lenient copyright law these sites are usually fairly basic and often only offer content in poor quality. However for many consumers these sites are “good enough” and preferable to the more expensive and legal alternatives offering a wider selection.
In the same vein legal streaming sites are becoming plentiful as well. Overly so in fact. As more companies decide to start their own proprietary streaming service user’s selection is becoming more and more fractured. For example Disney recently announced they were pulling all their content off of Netflix and starting their own competing servicexii. With the increased fracturing of the legal streaming industry many users6 are growing frustrated that in order to access the range of content that they want they would need to pay for as many as 5 or 6 different services, and are instead turning to piracyxiii. We have regressed back to the time where it is more convenient to watch media illegally than it is to do so legally.
A fantastic modern example of piracy gaining popularity due to ease of use is the rise of Popcorn Time. The software presented users with a slick and easy to user interface listing thousands of movies and TV shows. These lists were made by scraping a number of popular BitTorrent index sites for media and matching it with public data such as summaries and posters. Using a combination of several features of the BitTorrent protocol, Popcorn Time was able to provide an easy and reliable streaming experience. Due to it’s immense selection and easy interface Popcorn Time rapidly grew in popularity, even being covered in mainstream news. And it’s popularity has endured. Even after the project and it’s website being shutdown not once but twice Popcorn Time still gets thousands of downloads a month.
It’s been a long road over the last 20 years. Internet piracy has waxed and waned and come back again. In many ways piracy was an inevitable facet of the digital age. Science fiction authors predicted it many years prior and since then it has become an integral part of the way we interact with the internet. The internet is the greatest information system mankind has ever created, it connects all others across the world and beyond. Piracy is an inseparable facet of that, part of the core nature of the digital medium; nothing is unique, everything can be duplicated in an instant. The constant dance between the legal and illegal methods that users consume media is a core aspect of the greater information system of the internet. These two fields constantly try to outdo each other, as evidenced by the history of the medium.
Personally I do not believe piracy will ever be stopped. Streaming may replace a chunk of it, provide users with a better experience in exchange for their money. But there will always be those who don’t want to pay, or follow the rules, or have a dozen other reasons to want to pirate. Piracy will only ever be stopped when we stop thinking of it as “piracy”. When we realize that all information can now exist an infinite number of times and be shared in an instant. Hopefully one day there will be no piracy because we will be free the share our knowledge and experiences without the constraints we have now.
Hello! I really enjoyed writing this essay, and quite liked that we could pick our own topics so long as the section TA approved. Or at least that’s how our TA did it, the syllabus says something different… Anyway this was a fun essay and I enjoyed it.
Also I feel the need to clarify my usage of links, footnotes, and endnotes. I use inline hyperlinks when the source provides a good summary (ie Wikipedia) of the topic for those who want more information on the object in question. These are not authoritative but often provide useful context.
Footnotes are personal comments and anecdotes, while endnotes are Chicago-style citations and form a bibliography on the next page.
1They still don’t. See GDPR and Net Neutrality issues for more on that.
3Anecdotal evidence: “Napster” is recognized as a word by my word processor while “Spotify” is not.
4And known for giving creators the time and resources needed to produce such quality.
5The worst thing to happen to the internet and the cause of many problems. A topic for another day.
iAgencies, Staff And. "MPAA Says 24% of Internet Users Download Pirated Movies." The Guardian. July 09, 2004. Accessed February 08, 2019. https://www.theguardian.com/film/2004/jul/09/piracy.news.
ii"Demographics of Internet and Home Broadband Usage in the United States." Pew Research Center: Internet, Science & Tech. February 05, 2018. Accessed February 08, 2019. https://www.pewinternet.org/fact-sheet/internet-broadband/.
iii"H2O." Barber v. Superior Court. June 02, 2014. Accessed February 08, 2019. https://h2o.law.harvard.edu/cases/2615.
ivHaughey, Matt. "Napster A New Killer Internet App." evolt.org. November 12, 1999. Accessed February 08, 2019. https://evolt.org/node/564.
vStaff, WIRED. "Pirate Bay Bloodied But Unbowed." Wired. June 04, 2017. Accessed February 08, 2019. https://www.wired.com/2006/06/pirate-bay-bloodied-but-unbowed/.
viSnider, Mike. "KNOW YOUR (DIGITAL) RIGHTS." USA Today. August 21, 2007. Accessed February 08, 2019. https://usatoday30.usatoday.com/life/music/news/2007-08-20-digital-download_N.htm.
viiBirnbaum, Ian. "The Best Video Game DRM in the Business Is Getting Cracked Before Games Even Launch." Motherboard. November 12, 2018. Accessed February 08, 2019. https://motherboard.vice.com/en_us/article/3k9qnw/the-best-video-game-drm-in-the-business-is-getting-cracked-before-games-even-launch.
viii"Streaming." Wiktionary. Accessed February 08, 2019. https://en.wiktionary.org/wiki/streaming.
ixManeker, Marion. "Blockbuster's Death Was Long Foretold." CBS News. September 23, 2010. Accessed February 08, 2019. https://www.cbsnews.com/news/blockbusters-death-was-long-foretold/.
xJustin, Justin. "Video Site with Unauthorized Anime Gets US$4M Capital." Anime News Network. March 11, 2008. Accessed February 08, 2019. https://www.animenewsnetwork.com/news/2008-03-11/video-site-with-unauthorized-anime-gets-us$4m-venture.
xiNewman, Jared. "Why I'm Giving Up Streaming Music And Going Back To MP3s." Fast Company. May 12, 2015. Accessed February 08, 2019. https://www.fastcompany.com/3046089/why-im-giving-up-streaming-music-and-going-back-to-mp3s.
xiiCastillo, Michelle. "Disney to End Movie Deal with Netflix and Start Its Own Streaming Services." CNBC. August 09, 2017. Accessed February 08, 2019. https://www.cnbc.com/2017/08/08/disney-will-pull-its-movies-from-netflix-and-start-its-own-streaming-services.html.
xiiiAlexander, Julia. "Exclusive Shows in HBO, Netflix Leading to Increase in Piracy, Study Finds." Polygon. October 03, 2018. Accessed February 08, 2019. https://www.polygon.com/2018/10/3/17931926/streaming-exclusive-piracy-netflix-disney-hbo-game-of-thrones.