There’s a version of this RIAA infographic going around that’s a) total revenues, and b) not adjusted for inflation. “Total revenues” includes subscription revenues, ie Spotify (or as Ulrika calls the model, ransomware).
This is sales only, and also unadjusted for inflation. But I’m calling your attention to it for two reasons:
- iTunes was a big deal. iTunes really did replace CDs, for a while. But that meant Apple got a 30% cut. It is difficult to overstate how much resentment this caused at the labels. And a few labels were owned by movie studios (Sony/Columbia, Warner Bros., MCA/Universal). Which leads to…
- When Netflix was small, the studios didn’t care. But when Netflix kept growing, and looked like it was going to become an iTunes-like gatekeeper… Well, this graph shows why they decided to setup their own streaming sites. They were damned if they were going to get snookered again (from their point of view).
Now, it looks like video streaming really does benefit from economies of scale, and fragmenting the market is probably going to lead to everyone except Netflix imploding. Had the studios just stayed out of things, let Netflix take their cut, and kept everything consolidated, vast amounts of capital expenditures using shareholder cash wouldn’t have been wasted. Everyone would have been fat cats.
But there’s that damned ego problem. Faced with a second gatekeeper, the studio execs had to give it a try, other people’s cash be damned.
Oh, well.
