I absolutely love this comment, but very few creative media actually work like this. Valve is able to create a market where it makes sense to discount older games, which means that people buy more of them, and developers come out ahead. This works because Steam is fixed price pay-per-game - the more games you play, the more money comes out of your pocket and goes to the developers. This is quite possibly the most consumer-friendly business model you could pick where you still get paid for your work.

It's tempting to look at Netflix and say, "oh they're stupid, why would they stop being like they were in 2012". The reality is that 2012 Netflix streaming was never going to last. They were dramatically underpricing their subscription because nobody in the TV industry understood streaming[0] and thus underpriced their TV shows. When TV companies realized, "oh no, people are actually cancelling cable to subscribe to Netflix", they started to charge Netflix higher rates... because it turns out the TV business sort of just requires that $100 + ad revenue come out of your pocket every month no matter if the bill collector is called Comcast or Netflix.

Sports are like this but worse. Out of that $100+ads that cable costs, the ad revenue pays for the entertainment, and the $100 pays for the sports, because pretty much every sport is far more extravagantly expensive to run than you'd think, and never pays its way for anything[1]. This is also why sports will often have extremely customer-hostile business practices and weird blackout policies - because the audience itself has been sold to other companies who can then force them to pay more money.

[0] Remember how there was a writers' strike about a decade and a half ago, over, among other things, streaming royalties? TV execs genuinely thought that Netflix was never really going to take off and replace cable. Just like how the music execs thought downloads were never really going to take off and replace CDs.

[1] If you really want to get angry, look up how much money your city is paying in tax credits to your local sports teams.

Note that Newell's comments are from the perspective of the consumer. I, as the consumer, don't care at all about how expensive it is or is not to run a production company or cable channel or streaming service or sports team, I'm assessing quality, ease of access, and price.

>because the audience itself has been sold to other companies who can then force them to pay more money

Again, don't care. The point is that I, as the consumer, can't pay to watch NHL games in a reasonable way, but the pirate's product is better and free. So! Is it immoral to "steal" from ESPN/NHL in this way? Maybe, but it strikes me as kinda like Mr. Burns setting up a sunshade so as to be able to force everyone to use nuclear power for their lights -- it's a way to try to make money, and aw-shucks things are expensive [0] so they've gotta make money, but it's not going to work terribly well because of the realities of the medium and the consumer's experience.

>It's tempting to look at Netflix and say, "oh they're stupid, why would they stop being like they were in 2012"

Your straw-reasoner doesn't seem to get that Netflix isn't the owner of the content they're trying to get you to pay money for. Understanding that 2012-Netflix is streaming things they've licensed at rates reasonable to them is key to understanding why modern-Netflix stopped being like they were in 2012 -- the rates are no longer reasonable, so the content gets dropped. In contrast, the NHL is the owner of the content they're trying to get you to pay money for.

The NHL could unwind itself from predatory audience-eyeball-deals, just as I, as the consumer, could jump through flaming hoops to get a low-quality legal stream, but neither party wants to do that. So!

[0] I'm well aware of the horrifying practice of municipal (and even higher levels of government!) spending on private sports arenas, but I was under the impression that sports teams printed money. https://en.wikipedia.org/wiki/List_of_professional_sports_le... suggests I'm not wrong...

Yes, you are correct that the NHL sets the price of the content. And if fans were to lose interest or move to piracy, then Newell's argument would absolutely apply.

The problem is that, as it stands, sports fans aren't going to do that. Remember, these are the same kinds of people who shout at city governments to keep subsidizing sports arenas so they don't lose "their team". The NHL has a massive money spigot and they're going to keep it flowing for as long as they can.

> same kinds of people who shout at city governments to keep subsidizing sports arenas

In San Diego, we had a stadium which had hosted 3 Super Bowls. The NFL team owner arranged for multiple referendums on the question of city subsidies for an improved stadium in a San Diego location he preferred. These votes failed. Then the owner moved the team to Los Angeles.

American fans: You can loose the bonds of subsidy to teams that believe they can get anything and be paid to take it.

> "oh no, people are actually cancelling cable to subscribe to Netflix"

Because Netflix was a better service than cable, it doesn't take a rocket scientist to see that. The change came from TV companies wanting their own streaming service too, basically bringing back the cable model to the internet.

If they don't want to depend on Netflix, why don't they cooperate to build a unified and neutral streaming service where they can share the revenue? Every Internet user would want to subscribe to that.

A "unified and neutral streaming service where they can share the revenue" already exists. That's called cable - and 2012 Netflix was just a better, more convenient, and cheaper version of that.

Part of the whole premise of how the Internet was supposed to disrupt the publishing business was disintermediation - i.e. cutting out the middleman. Instead of everyone selling their works through a distributor, they'd sell them direct to the public. And that's basically what every streaming service turned into - including modern Netflix.

Cable companies used to be good, too. The shenanigans they resorted to with "packages" and price discrimination were the result of the same pricing pressure from the TV networks that killed 2012 Netflix. When Netflix refused to play that game, the TV networks decided to disrupt Netflix, because they own the content and Netflix owns nothing.

Sometimes innovation sucks.

> A "unified and neutral streaming service where they can share the revenue" already exists. That's called cable

A true neutral streaming service would be like a pirate streaming site: available globally, no geofencing, and one price for everything. 2012 Netflix showed that it can work.

> The change came from TV companies wanting their own streaming service too, basically bringing back the cable model to the internet.

With streaming, the middle man is cut out (versus cable) which makes a huge difference. Rather than buying a package of 100 channels from the cable company, I can instead subscribe to individual packages of content direct from much smaller packages of channels. Although I am paying more for the content I want, I save money because I'm not forced to subscribe to dozens of channels I will never watch.

> If they don't want to depend on Netflix, why don't they cooperate to build a unified and neutral streaming service where they can share the revenue? Every Internet user would want to subscribe to that.

That’s exactly what Hulu was meant to be. It’s a fair thought that well-positioned people shared, but it turns out it’s not so simple.

You mean…cable

Disney/HBO content is worth a lot more - they both have multiple billion dollar franchises - than Netflix.

> Out of that $100+ads that cable costs, the ad revenue pays for the entertainment, and the $100 pays for the sports, because pretty much every sport is far more extravagantly expensive to run than you'd think

I think it’s kinda the reverse - e.g. the AHL is able to pay its players, televise its games, and make do with an order of magnitude less revenue than the NHL. After adjusting contracts, etc. the NHL could presumably do the same.

He was right then, and he's still right now.

This was a big part of why Steam was such a success. You get free updates, online multiplayer, storage of your games, cross-platform support, etc