What.CD did piracy and this is why it achieved these things. Piracy is a violation of copyright. Copyright is a monopoly granted by the state. Monopolies prevent competition and are counter to capitalism. The shutting down of What.CD is the doing of the
government, not the doing of
capitalism.[1]
Free market capitalism means economic liberalism. It doesn’t mean “big evil companies making big money.” In a real free market, the government wouldn’t grant these monopolies. What.CD would be more convenient than Netflix and iTunes because it costs nothing and doesn’t have DRM, so Netflix and iTunes would disappear and What.CD would remain. This is literally what would actually happen in an actual free market.
Economists aren’t stupid. They don’t literally believe there is a magical invisible hand guiding the market any more than biologists believe there is a magical deity guiding the evolution of species. Magic isn’t required for a free market to be efficient: it's just a phenomenon that happens and that we have a logical, non-religious, non-faith-based explanation for.
[1]: I’ll quote Wikipedia on this:
– “Copyright is a legal right created by the law of a country that grants the creator of an original work exclusive rights for its use and distribution.” (https://en.wikipedia.org/wiki/Copyright)
– “Exclusive rights are a form of monopoly.” (https://en.wikipedia.org/wiki/Exclusive_right)