A court has struck down Internet neutrality. This is a big deal.
What it means in a nutshell is that the companies bringing you Internet — Verizon, for example — may have a chance to prioritize their own content over other things on the Web. Business Insider published a very handy Q&A that goes over the basics of the ruling and what it means.
But while most of the attention has been on what the ruling means for consumers like you and me, it could also have unforeseen consequences. For example, more piracy.
That’s because it may significantly raise the cost of streaming services such as Netflix. Yesterday, USA Today reported that Netflix may see up to $100 million more in annual fees as a result of the ruling. That scenario isn’t a given — Netflix may also have new opportunities — but the experts and investors seem to think it’s possible.
And Netflix is not a charity; if it has to pay more, its customers will, too. So, the cost of that $8-a-month subscription (for an increasingly limited selection, I might add) will go up. That, in turn, will likely mean cancelled subscriptions, as we saw following 2011’s price hike.
So why does that matter for piracy?
Because companies like Netflix have marginalized illegal downloads by making it easier and cheaper to pay for content. Farhad Manjoo, while he was still at Slate, wrote extensively about this. The idea is that price is only one part of the piracy equation. The other part is ease of use. So, if you create a good customer experience and don’t charge a lot for it, people will be happy to pay.
In 2011, Manjoo argued that Netflix "is killing piracy" with this strategy. A service like Spotify epitomizes this; it’s cheap and way easier than going to either a record store or downloading something illegally.
iTunes, in the early 2000s, did something similar in the twilight of the Napster days. And just last year, Thorin Klosowski at Lifehacker wrote that "it’s now a better experience to download something from a legitimate source than it is to pirate it."
Or, it was.
The new net neutrality ruling could change that if it translates into skyrocketing fees for the services that mostly already conquered piracy. Sure, Internet providers could respond by throttling piracy services, but piracy has always been about finding a workaround.
People in their late 20s or 30s might remember the golden age of Internet piracy in the early 2000s. At that time, free illegal content was everywhere and, for young people, it was basically a given that you’d partake.
Today, people still illegally download content, but it’s not as much a cultural norm. I haven’t downloaded anything in years because, why would I? I just stream it, legally. The same goes for most of my friends. One of my sisters, who is several years younger than me, recently even said she believes illegally downloading content is "wrong." Clearly, the Napster era has passed and today illegal content mostly fills in the gaps left between legitimate sources.
But if the pendulum swings back toward the way things were in the late 1990s and early 2000s — and legal content becomes inconvenient and expensive — someone is going to find a way around the law and a new era of piracy will begin.
— Jim Dalrymple II
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