The ghosts of record labels will watch Netflix

Netflix CEO Reed Hastings has recently made headlines by making the bold claim that by 2030, broadcast television will be dead.

“The age of broadcast TV will probably last until 2030," Hastings said at a Netflix promotional event in Mexico City, as quoted by the Hollywood Reporter.

As streaming services like Netflix explode in popularity, many analysts say the writing is on the wall for broadcast TV.

Here in Canada, evidence of cord-cutting — cable and satellite subscribers ditching their TV services — is beginning to accumulate.

The most recent earnings reports from Rogers and Shaw showed them losing cable customers at a rate of nearly 200,000 per year.
It's a semi-bold prediction: by 2030 so much technologically will have changed, it will be hard to imagine the broadcast network model remaining highly popular. The vaunted demographic group of 18-34 in 2030 have just finished being born! What will the TV viewing habits be of people born between 1996 and 2012? Will their children, who all have yet to be born, have their attention spans so blasted by on-demand video of the entire history of the universe that content providers can satisfy them by spitting out an hour of entertainment a week at a time?

Probably not. But speaking from personal experience, I still will watch TV just to discover what is on. (Most of it is dreck, but that's a separate issue). Case in point: last week Pirates of the Caribbean was on TV. The first one. I have it on digital download. I can watch this movie any time I like. I can skip parts I find boring. If I miss a good action scene or joke because I'm doing the laundry or making out with a hot asian chick, I can go back and catch the scene. Yes, strictly speaking I can do that on the TV version thanks to my PVR, and then skip forward during commercials -- but I'm still stuck watching commercials. I have every single episode of NCIS from Season 1 to Season 11 downloaded as well. I can literally go to my computer or stream through my TV and watch every episode of the show ever. Yet often when NCIS is on TV, I'll start watching the episode even if I miss the first part of it. There's a certain comfort of those TV shows just being on and available.

Is there a lot of demand for this? Some, I'm sure. Will it alone be enough to keep the number of stations we have now profitable? Almost certainly not. But there is a mechanism you can see by which broadcast TV remains viable. Broadcast radio has remained viable for decades, even though music let you own on-demand high-quality versions right from day one. The technology will change, adapt, and ensure that it stays relevant to as many people as possible. Again, will broadcast TV exist in 2030? For that, we turn to MC Lars.

In 2006, the Berkeley California based rapper recorded probably his most well known track: "Download This Song" was featured on CBC, charted in Australia, and is probably the reason any of you would have ever heard of this guy. You may also have heard how MC Lars's label, Vancouver based Nettwerk Group, helped a Texas man accused in court of downloading music due to his situation mirroring one of the lyrics in "Download This Song".

But the lyrics also speak to the dangers of being too bold in predicting the future.
Hey Mr. Record Man
The joke's on you
Running your label
Like it was 1992
Hey Mr. Record Man,
Your system can't compete
It's the New Artist Model
File transfer complete
I've got G5 production, concept videos
Touring with a laptop, rocking packed shows
The old-school major deal? It makes no sense
Indentured servitude, the costs are too immense!
Their finger's in the dam but the crack keeps on growing
Can't sell bottled water when it's freely flowing
Record sales slipping, down 8 percent
Increased download sales, you can't prevent
Satellite radio and video games
Changed the terrain, it will never be same
So far, so decent: physical sales have been slipping, it's true: though now digital downloads are in decline too. (I'll freely grant, of course, that MC Lars's finer point here is still fully intact: the music industry keeps changing and the sellers of content can't keep clinging to yesterday's model whether its a download or a streaming service)

Unfortunately, what comes next was maybe pushing it a bit:
Did you know in ten years labels won't exist?
Goodbye DVD's, and compact disks!
Compact discs are, worth noting, almost dead. CD sales fell 19% between 2013 and 2014, and the hit was oddly highest at mass merchants like WalMart where you'd figure the old people would still be wanting to buy a physical thing they can hold in their hand. DVDs, similarly, are dead. Hell, BluRay is dead and it was barely getting off the ground in 2006. DVDs, despite a recent boost, aren't likely to be very popular in 2016. ("Disclosure": I technically have a big enough TV that I should notice the difference between DVD and BluRay, but in practice I don't really. I prefer DVDs because they are cheaper: on my BluRay player they get upconverted to 1080p anyways, and I watch enough pre-Avatar movies that the difference in picture quality is negligible).

But as for the other claim, that by 2016 labels won't exist anymore? That's really pushing it.

Like the 2030 Netflix claim, it's possible (and increasingly so), but unlikely. In 2013, the death of the record label was "premature":
“What I know for sure is that most artists want to make music and connect with fans; they did not sign up to be the CEO of their business,” said Mr. Bolza.

So who will do it? “It will be a record company, it might just not sell records. If you think about it differently, if you think about us not as a company but as a collection of skills that you can buy. The market has created choice.” Other companies could assemble the various skills possessed by record labels but, if they did that, they would, in effect, just be launching their own modern-day record label.
Record labels may still die (and Taylor Swift may kill them), but the dreams of a swift death to the record label are probably unfounded.

Just like Hasting's prediction. 2030 is longer away than 2016 was in 2006[citation required], so lots can happen. It may come true, it may not. We'll have to wait and see. We'll have to wait and see about MC Lars's prediction as well, of course. That's coming up in under fifteen months, and while none of us can predict the future there's a good chance that this blog will still be around. So stay tuned, we'll check up on this later.