As seen in ‘THE DOWNLOAD NATION’ there is an already substantial and growing market for digital/online distribution of high production content. Why then does there seem to be such a slow uptake towards the format?



There is certainly a stigma associated with the digital realm in terms of pirating. It seems almost innate now that the large studios are opposed to pirating and downloading. As a result, it seems legalized modes of digital distribution have also inherited that stigma.



This view is strongly established in Curray’s (2006) overtly progressive study ‘Hollywood versus the Internet’. Curray indicates that there is ‘a tendency for oligopolists to neglect or even marginalize emerging markets, especially those that are seen to threaten the status quo. Therefore, the behavior of oligopolistic firms tends to reflect, defend and enforce the prevailing structure of the industry, making any kind of radical change difficult to justify or initiate’ (p.440). As a result we are left with a prevailing push for broadcast television and “an inefficient and restrictive ‘design’ for Internet distribution” (p. 439).



With consideration to recent history, it is no surprise that Apple led the way for the legalized distribution of music, television and film. It is important to stress legality, because illegal torrenting still remains the only current model that is properly addressing the consumer. Apple was “again succeeding in making money (despite widespread piracy) by offering a cheap price point for movie and TV downloads, just as it had done previously in the music industry. This resulting in iTunes becoming the ‘Wal-Mart’ of online music sales.” (Cunningham, Silver and McDonnell 2010, p. 127)



Apple’s dominance of the ‘legal’ market place was only possible due to a particular motive behind digital music, TV and film distribution. It was a motive that allowed them to provide “paid downloads…at the right price” for “super-thin margins”. The motive was to attract customers to media products on iTunes that were tailored to Apple’s own products: iPhones, iPods and perhaps to a degree Mac computers. Therefore, whilst they merely broke even on download sales they “made huge profits” (2010, p. 127) from product sales.



Apple saw the opportunity in the download culture; they merely shifted the point at which they made profit (SEE ECONOMIZING NETWORKS). This adheres to media theorists Chuling, Hua and Chee (2012,p.393) who assert that when a “gulf between the visionaries and the pragmatists adopters” exists, it can usually be “overcome with a shift in marketing strategy as different adopters require different buying motivations”. Their study, ‘Investigating the Demise of Radio and Television Broadcasting’, which emphasizes the need for media organisations to consistently ‘evolve’ their product, stresses that crossing this gulf is key in capturing “the mainstream audience”.



An interesting case study that stemmed from Apple’s video distribution is the removal of all of NBC’s content from the Apple stores on December 1st 2007. What resulted was “a 11.4% increase in piracy for their (All of NBC’s) content, which corresponds to 27 more pirated downloads per day, per episode, or about 48,000 total additional pirated downloads per day” (Danaher 2010, p.3) This spike in downloading may seem logical, but when considered that there numbers represent downloads ‘twice as large as the daily number of downloads of these episodes on iTunes in the two weeks prior to December 1’ (p.3), the shift takes on a more profound presence, and concurs with the idea that downloaders have a tendency to consume more (SEE DOWNLOAD NATION). What must be considered in conjuncture is the reinstatement of all of NBC’s content to iTunes in September 2008. This restoration ‘caused a smaller, statistically insignificant drop in piracy’ of NBC’s content. These numbers point to two things:
1. Pulling their content off iTunes did not – for NBC – cause the desired result, which was a return to their broadcast programming and to their DVD sales. This shows that iTunes has created a range of consumer behaviors that are preferred over tuning in to broadcast and to the physical purchases of DVD’s.
2. The reinstatement of NBC’s content that caused little or no change in the level of illegally downloaded NBC content, points that iTunes is still an inferior mode of digital distribution. It still doesn’t emulate the desired functioning of the modern consumer, whilst far superior in the realm of legalized digital content, iTunes still does not compete.



More than anything, this shows the importance of a culture and lifestyle now attributed to the product. We are seeing a prevailing shift in consumer behavior, where those that “go digital, will be disinclined to go back” (Danahar 2010, p.10). The way we consume is becoming almost as important as what we consume, meaning a drastic need to shift the way we see the success of a TV show. Recent broadcast examples are AMC and HBO, who don’t attract large viewership and instead attract fanatical viewers that are loyal to the programs and the stations. This is important as their advertising revenue is based on the number of subscribers rather than weekly ratings (SEE TV HISTORIES).



Apple led the way in shifting how we think about digitally distributed content within the download culture, they saw a new value in what was said to be a success or failure. Apple cleverly understood the demand for digital and took the opportunity to attract people to their products. The distribution of music, TV and film merely are incentives or perhaps even an invitation to their family. This is community building; a practice that is becoming particularly important in the online world.



What the iTunes store promotes is hype, or an incentive; it is a space for attracting followers, creating a network, and investing people in the wider company. Similarly, other digital distribution outlets are using original programming as a source for hype, attracting long-term subscribers through content.



Another major shift attributed to digital distribution is the “eradication of the middle ground” - that being “the schedule filler” programs. When viewing content is no longer about tuning in to what may or may not be broadcasting, individuals will be seeking specific content, meaning “fortune will favor those who take real creative risks” (Thompson 2009, p.146). Netflix’s decision to bring back Arrested Development was a very conscious and cleverly specific decision. Arrested Development was cancelled after its third season, but held a substantial fanatical following. Subsequent to its cancellation, it became one of the world’s most downloaded television series’.



By making Arrested Development only available on their service, Netflix managed to attract the loyal fan base of the show to their streaming service. The hype surrounding the series return was meant to be causal of a reported 10% spike in the Internet traffic of their reported 33.3 million subscribers. (Boorstin, 2013) The 10% spike represents three times the traffic attributed to Netflix’s other original series House of Cards, a show that ‘The Japan Times’ reported had attracted 2 million new subscribers to Netflix’s service (Liedtke, 2013)



Like Apple’s decision to distribute content for an almost non-existent profit to attract users to their electronics, Netflix used Arrested Development and House of Cards to attract subscribers to their streaming service.



Streaming is a ritual, with the primary aim to get people through the door and using the service. The actual quality of the new Arrested Development season now takes a back seat, whilst the quality of content is still important in maintaining their brand. Whether a show is considered an economic success now comes down to the primary hype it establishes and if there are consequently new subscribers. The enjoyment subscribers may or may not get from the show they signed up for aside, they now have access to Netflix for a month. They therefore have a month in which to utilize the service they have paid for. Netlix’s aim is to trust both the product they provide and (as already established in THE DOWNLOAD NATION) the addictive nature of digital distribution. In Muniz and O’guinn’s 2001 study ‘Brand Community’ it is indicated that to create invested users, there must exist “rituals and traditions” that can “perpetuate the community’s shared history” (p. 413). Netflix’s ritual is the new way it encourages users to consume content, a style of consumption that has been dubbed ‘binge viewing’.



Netflix is encouraging this style of watching by releasing all episodes to a season at once. It is further encouraging ‘binge viewing’ through the writing style implemented in their shows. As an example, the Arrested Development writers postpone the punch lines to certain jokes until later episodes. T his encourages users to watch continuously or otherwise miss the ‘gag’. Netflix wants viewers to watch the content in large chunks, as it telegraphs the freedom to watch on demand that is lacking in broadcast content.



Contrasting their ‘mode of consumption’ is important for Netflix, as it has been shown that “the mode of consumption shapes consumers relationship to products and services and their preferences, values, and desires” and that the “mode of consumption shapes consumers perception of value” (Bardhi and Eckhardt 2012, p.882) In understanding that ‘mode of consumption’ shapes users, Netflix has successfully attracted costumers through original content that targets smaller niche communities - made up of passionate loyal fans. Further, they have managed to shift the consumer’s perception of value away from physically owning content toward paying upfront but getting more for your money.



The study, ‘How Does organization Identification form? A Consumer Behaviour Perspective’, outlines the paths to identification. Whilst they can be seem in one form or another above, Melea Press and Eric J. Arnould of Chicago University, deconstruct association into two steps:

1. Epiphany
2. Emulation



Epiphany is instantaneous. It is where emerging organizations need to understand their audience and create a service or product that correlates with their sentiments. Apple did this by shifting the interest away form the product and to the experience by delivering their original IPods in beautifully hand made origami containers. Netflix has achieved epiphany in three ways:
1. Realising the hugely ineffective way in which the DVD business was working and made it a delivery service.
2. Saw the growing consumer demand for on-demand/download content and created a streaming service.
3. By addressing niche communities of viewers, their original content targets very specific audience demographics.
Epiphany is about making the organisation seem like it was made for the user.



Emulation is slower and occurs as a result of epiphany. For emulation to be effective, ‘it is vital that these conventional media broadcasters, or TV companies, innovate, not just to maintain, but also to expand on their share of the consumer base” (Mingqing, Wenjing and Junming 2012, p.413). Expansion provides a wider base for users to emulate toward, meaning epiphany can act as a conduit to other components of the organisations. As already touched on, Netflix’s original content could be seen as Epiphany and then the users would emulate towards the streaming service. Emulation is key, and it is what Netflix can offer that most traditional broadcast networks never could. It is something beyond the original hype, beyond the original attraction - that being both a vast library of film and TV content and a new mode of consumption. Emulation is where rituals form, where users become invested in the organisation creating a ‘Brand Community’.



What a ‘Brand Community’ allows for is a shift in the way we see the value in a product. Now a product must be seen within the greater organization – in its role to attract, but not to the show/film/thing itself, rather toward the service. Download culture must stop being seen as a glitch or a problem in producers’ or broadcasters’ functioning and instead, as an addictive, prolific, and communal practice. It must be seen as an opportunity to attract large groups of people. Then, with a large enough community you will always find a way to monetize that network (SEE MONETIZING THE NETWORK) 



​