Netflix KO's Blockbuster, ushers in Web TV
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This century's first decade saw the music industry lose control of digital distribution due to the Internet. Will the second decade see the same happen to book publishers and filmmakers?
The public's entertainment tastes certainly appeared to be shifting in 2010. DVD sales continue to plummet. Some cable TV services reported declining numbers of subscribers. This was the first year people spent as much time online as they did watching TV. Meanwhile, in the quarter ending Sept. 30, Netflix, the Web's top video-rental service and one of technology's biggest stories of the year, reported 16.9 million subscribers, a 52 percent increase from the same period in 2009.
(Credit: Greg Sandoval/CNET)
Blockbuster, the once dominant brick-and-mortar rental chain, finally filed for bankruptcy protection and Netflix ascended to the video-rental throne. The popularity of Netflix's streaming service heralded the coming of the Web TV era.
In the summer, Netflix announced two important streaming rights deals, including one with Epix, a pay TV channel backed by Paramount and MGM studios. The deals helped prove some of the top studios would give Netflix access to streaming content. Whether the company can continue to build out its streaming library is uncertain. Some in Hollywood fear Netflix is a harbinger. Not only could wide adoption of an $8-a-month rental service mean less rental revenue for the studios, but Netflix could emerge as a serious cable competitor. Cable pay TV services are a big source of income for the studios.
In print publishing, the glut of e-readers, including Apple's iPad and Barnes & Noble's Nook, continued to make gains in whetting consumers' e-reading appetites, a trend kicked off by Amazon's Kindle in 2007.
As print publishing and Hollywood enjoyed some digital successes this year, they both appeared to lose some ground against illegal file sharing. According to some studies, the pirating of e-books is on the rise. In film, independent studios, including the makers of Oscar winner "The Hurt Locker," marked the year by filing lawsuits in March against thousands of individuals they accuse of illegally sharing their movies.
Those efforts appeared to lose steam last month after a federal court refused to grant the indie studios an extension before moving to the next stage in the case.
Copyright owners saw at least one major victory over digital piracy in 2010. In October, a U.S. district court judge ordered the company that operates the popular LimeWire file-sharing service to shut down the network. While the injunction was a symbolic victory, it's doubtful it will do much to stop piracy.
The music industry, a canary in the coal mine for judging the Internet's effects on media companies, doesn't appear to be coming out of its long malaise. As CD sales continued to fall this year, download sales were flat. The three most promising prospects for driving a turnaround never showed up.
Multiple industry sources told CNET earlier this year that Apple and Google both spoke with the music labels about building streaming music services in 2010. In the final months of the year, the same sources said that while Google continues to discuss licensing music for its service and should launch it sometime in the first half of 2011, Apple's plans are unclear.
As for Spotify, the European streaming-music sensation just can't seem to make good on a promise to launch in the United States. The company said it would offer songs here by the end of the year. Insiders told CNET, as of two weeks ago, the company had yet to license music from any major label.
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