Netflix has been able to track exactly what types of movies consumers are into so that it can deliver more in the same vein. Originally, it would send consumers to other movies it licensed. Now, as a producer, it can direct consumers towards its own flow of productions.

Spotify's recommendation engine has long been a draw for many users. I believe Spotify is setting itself up to be able to increasingly direct users into its own Spotify-flow of artists and musicians. The recent change to playlist mechanics (so that playlists autoplay "recommended similar songs" once completed) will make this even easier.

Having a huge catalog is important, but controlling the flow of what's popular may trump the back catalog in the long run.

edit: Spotify is not as far along in the process as Netflix, obviously, and the entrenched nature of the music business doesn't help, especially with the market practice of locking artists into 7-year exclusive contracts. I believe it will go in the same direction - it's just going to take a little longer.

Netflix's "recommendations" have been pretty terrible from day 1 -- it's mostly random garbage, and suffers from serious issues like grouping sci-fi with horror (seriously? Star Trek TNG belongs in the same category as Hellraiser?) -- and since they started producing their own content their recommendations have quickly become thinly-veiled attempts to push their own mostly-poor content. Add in their horrible UI, replete with autoplaying previews as you browse tiles paired with obnoxious stock music, and Netflix has become something painful to use. I've been moving back to renting/pirating depending on availability and price this year because Netflix doesn't have anything worth watching that I haven't already seen.

Now I open Bandcamp first when I want music.

I think this has more to do with the economics of pirating movies versus music.

When Netflix started, people were not used to torrenting (or Napster-ing, or Kazaa-ing, etc) movies. They were already at the mercy of Blockbuster, so being at the mercy of Netflix instead wasn't that big a deal. Pirating movies is more popular today, but people are still generally OK with having a limited movie selection.

Whereas by the time iTunes Music rolled around, people were already comfortable with having the whole world of music at their fingertips. You can't undo something like that easily. So the only way forward has been to try to have everything.

Perhaps the most interesting part about all this is that there was never (to my knowledge) such a thing as a store where you could rent records, tapes, or CDs -- Blockbuster for music.

Not a store, but you can rent records, tapes and CDs at most libraries.

That is because it is illegal. 17 U.S.C. § 109(b).

It seems one could start a private non-profit library whose purpose is teaching about music history that rents CDs and promotes musical performances. I could call it "Musicbuster" perhaps. I'm assuming no one has done this because there isn't really a market for it? Or is that not a clear and easily exploited loophole in law?

Even if there is a market for it, the nature of the legal limitation to a non-profit library is that the usual capitalist incentives for serving such a market are removed.

Because Redbox rents games

I don't disagree but I also find these foundational to your argument and they appear to be perceived opinion.

Can you provide a source for this that adjusts for the increase in worldwide internet use as well as bandwidth?

When Netflix started, it was an overnight DVD delivery company, not directly competing with online movie piracy. Pirating movies in 1997 meant making large sacrifices over quality and convenience, not because people "weren't used to it".

By the time Netflix entered the online movie streaming market to compete with piracy, the DMCA had been in effect for years. The world was very used to filesharing before the DMCA went into effect. And Blockbuster was already suffering poorly not just because of Netflix but because of a general shift in how people consume their movies.

> Whereas by the time iTunes Music rolled around, people were already comfortable with having the whole world of music at their fingertips

Through YouTube? Because otherwise I don't know of a truly comprehensive legal streaming service. Unless you're referring to filesharing?

> Perhaps the most interesting part about all this is that there was never (to my knowledge) such a thing as a store where you could rent records, tapes, or CDs -- Blockbuster for music.

Music-ripping tools were ubiquitous at the time (everyone had a CD drive), movie ripping tools were not nearly as popular. It didn't economically make sense.

Why? The fact that it was physically hard to pirate movies in 1997 is part of why people didn't do it.

Through YouTube

iTunes Music predates YouTube being a viable music platform. I'm talking about filesharing.

Music-ripping tools were ubiquitous at the time

I'm talking about pre-CD-drive.

They are both media-consumption services but I think most people treat them like