Australia has a multitude of comeback stories – our America’s Cup victory, Steven Bradbury’s miracle on ice, even John Howard’s political resurrection.

Jimmy Barnes launched a successful solo career after leaving Cold Chisel and overcame addiction and health struggles (mostly he is included here so I can point you to an old column about him).

I’d argue we’re about to see another unexpected comeback – online piracy.

Back in the late 1990s and early 2000s, the music industry was in full-blown panic mode. The culprits? Two names that still trigger nostalgia for elder millennials: Napster and Limewire.

Music was purchased on CDs at the time, either as full albums or as singles. An album in 2000 probably set you back over $20.

Downloading a music track as an MP3 file, albeit very illegally, via Napster was a quick and cheap (free) way to access new music.

Blank CDs cost about a dollar in bulk. Suddenly you could build your own music library — cheaper and better than what the industry offered.

If you listened to your music collection on the family PC, no costs other than the monthly internet bill were there to hold you back.

Eventually, the music industry caught on. The iTunes Music Store launched in Australia in October 2005.

A single song was priced at $1.69. Most albums were priced at $16.99. Not an amazing price, considering how cheap pirated music was, but convenient for the newly emerged iPod crowd.

The real turning point didn’t come until 2012 when Spotify launched in Australia (four years after its US and European debut) and changed everything.

Music wasn’t just cheaper, it was bundled into a monthly subscription. No need to plan which music to download, just stream any song you are interested in instantly.

Why steal music when, for an affordable $11.99 per month, you have a superior user experience?

A plethora of platforms copied the Spotify model. Today you can listen to (almost) any song you want on all platforms. Spotify, Apple Music, YouTube Music, or Amazon Music Unlimited all offer essentially the same music experience.

Music piracy largely died off. The quality and ease of the music subscription model is simply better than the cumbersome process of online piracy.

Recorded music revenues in the US fell from their heights of 1999 until 2014.

By 2021 revenues surpassed 1999 levels. Granted, these numbers aren’t adjusted for inflation, and music still isn’t nearly as big a business as it was in 1999.

Recorded music is now almost exclusively an online business. Profit margins are higher than they were in the past since the supply chain is much cheaper to handle for digital goods. All in all, the music industry reacted to online piracy and managed to live another day.

So, online piracy is dead then and will never rise again? Not so fast, cowboy!

Music isn’t the only product that digital pirates share online. Movies, TV shows, video games and live sports are also merrily pirated.

When Netflix launched in 2015 in Australia for $9.99 per month, it was a game-changer. We could legally access heaps of content without dodgy torrents and sites full of pornographic or gambling popups, or low-quality movie bootlegs.

Want to add subtitles or switch audio language? No problem on Netflix.

Piracy didn’t disappear, but it no longer felt worth the hassle. For a brief moment, streaming movies and shows seemed to go the way of music streaming: a better user experience makes the use of pirated content obsolete. But that’s not what happened.

For movies and TV shows, the market also fragmented. Disney+, Paramount+, Amazon Prime, Stan, and countless others entered the scene.

Unlike music platforms, where content heavily overlaps, each video service keeps its catalogue locked away. Video streaming once was a convenient solution but is now an annoying digital scavenger hunt without a decent treasure map.

In a recent column I suggested you watch The Fisher King (1991). Where do you find the movie? No idea. You try streaming it right now and time yourself. How long until you have the movie up and running? It’s cumbersome.

And nothing is permanent. Titles vanish from libraries without warning. Even digital purchases can be deleted or restricted. Amazon’s done exactly that. The only reliable way to keep a show? Download it illegally. Not exactly an anti-piracy strategy.

To control costs and rights, streaming services became studios. Netflix now spends billions producing its own content. That content will not be available on other platforms.

How many streaming services does your household subscribe to? It’s five in mine at the moment (BeinSport, Stan, YouTube Plus, Amazon Prime, Disney+) but this will be cut down in a rage quit once I finish writing this column.

We’ve gone from bingeing everything on one platform to hoping our preferred service has something worth watching.

Swapping subscriptions sounds good in theory, but in practice it’s a chore. The psychology is clear, we don’t cancel subscriptions the second we don’t need them, and service providers use this behaviour against us.

To make the user experience worse, platforms like Netflix that once encouraged password sharing now crack down on it.

Ad-free tiers quietly include ads. Maybe you are on an overseas trip and want to stream something? Good luck. Your library is limited or might not work at all in the case of sports (Stan and BeinSport).

Over the last few years, services asked for more money while offering less certainty.

In the early days of Netflix, users spoke highly of the platform. It’s rare to find people praising a platform these days.

Disney+ for example only has a very limited number of movies available in German – that would be my particular use case for the platform – easy language learning for the kids. Heaps of migrant families in Australia complain about the lack of content in their mother tongue even though its available.

Unsurprisingly, frustrated viewers have been returning to piracy—not because they want to steal, but because that’s the only option.

Even Netflix, in its own reports, acknowledges piracy is back. Today’s pirate sites look and feel like legitimate platforms – except they’re free and have broader libraries.

Video games are harder to pirate than ever since more and more titles are multiplayer games that run on official servers. Also, more and more games are consumed on smartphones and illegal software can’t conveniently be installed via the Apple and Android app stores.

For sports, the need to use illegal services is even bigger because the user experience is outrageously bad especially for fans following international or niche competitions.

I for example want to watch my favourite German football team, Bayern Munich, play. The Bundesliga, the German league, is shown on BeinSport ($14.99/month). The UEFA Champions League is shown on STAN.

You can’t just purchase access to STAN Sport which is $15/month,  you have to purchase a STAN Standard ($17) or STAN Premium ($22) package too.

Bayern Munich also play in the FIFA Club World Cup in June – that’s shown on yet another platform (Optus Sport $24.99).

Football fans follow a club, not a competition. A meaningful bundle would be all games across all competitions from your club. But by splitting streaming rights to different platforms, three rather than one platform can make profits from sporting fans.

Watching sports, especially international sports, is stupendously expensive and cumbersome if you are a law-abiding customer.

So, what’s ahead? Video streaming services will not change their business model as long as it’s profitable. In Australia they still have a rich consumer base that is able to pay high prices for ever worsening user experiences.

The legal services will continue the status quo. I would expect that in times of a prolonged cost-of-living crisis more Australian households will look to cut the high subscription fees and look at illegal alternatives.

Turning to illegal sites will bring new cybersecurity risks – because, nostalgia aside, pirate sites still make money somehow, often through shady means.

Simon Kuestenmacher is a co-founder of The Demographics Group. His columns, media commentary and public speaking focus on current socio-demographic trends and how these impact Australia. His podcast, Demographics Decoded, explores the world through the demographic lens. Follow Simon on Twitter (X), Facebook, or LinkedIn.