Will the television industry learn from the mistakes of Napster?

Will the television industry learn from the mistakes of Napster?

Remember Napster?

Not the streaming music service that tried to make a comeback a few years ago—the original, totally revolutionary and totally illegal file sharing service that allowed people to share music tracks. It was break-through, disruptive technology that completely changed the economics of the music industry. (And to reiterate, yes, it was illegal.)

If we look at the landscape of music today, we see a world not far off from what Napster originally foretold. Singles (once core to promoting album sales) are increasingly unbundled, pricing is often based per-track, is relatively flat, relatively simple, and increasingly, music is not even purchased, but rented or streamed.

About ten years ago, the original reaction of the music industry towards this disruptive change was to pursue litigation to defend legacy business models. The industry clearly had legal grounds to defend itself against piracy, but the legal strategy the industry pursued was not designed to regain lost revenue—it was designed to scare customers away from innovation.

At the time, pundits noticed that the television and video industry would be wise to embrace, rather than fight technological innovation and be part of the revolution—as opposed to fighting a low-level war against customers.

And to its credit, the television and video industry learned from the mistakes of the music industry and partnered with the likes of Apple, Amazon and Netflix and even launched Hulu. Some lauded such forward looking strategies while others simply suggested that “some day in the future”, technology would continue to move faster than the industry, and eventually, the television and video industry would pursue litigation to defend its legacy business models.

Well, that day seems to have arrived. Every day, it looks like there is another news article chronicling the television industry’s attempt to hold back innovation. From the Hopper to Aereo, and most recently, Google’s Chromecast.

Several media outlets reported on Google’s $35 Chromecast streaming device to bring chrome to the living room.


This last entrant is too new for the industry to have launched legal pursuits (yet), but there is already buzz around how network operators view Google’s Chromecast as a threat to their business models.

Google’s Chromecast Lets You Watch TV on the Web on Your TV, and you can guess who doesn’t like that. Forbes is already talking about how the new Google Chromecast device is a game changer. Several media outlets are saying that you’d be crazy not to buy Google Chromecast, and not surprisingly, Google’s Chromecast sold out hours after being unveiled.

It’s unclear how the television will respond, or even what it can do, given that Chromecast is based on the Google Chrome web browser, but let’s hope that the industry wakes up and finds a way to partner, rather than thwart this latest innovation.

About the Kabardian Group: We help clients achieve profitable growth. Short, simple and to the point. Our clients include companies large and small and at every stage of their development, including start-ups. www.kabardian.com