Innovation in the Market for Video Programming

Child with popcorn

Some technological changes sneak up on us so quietly we do not even know it has happened. A perfect example of this is video programming. It was not too long ago when consumers had to drive to a store to rent a movie at the local Blockbuster rather than just start streaming a movie instantly with a few clicks on Netflix. Today consumers have more options than ever for legally obtaining video content. The market shows an unprecedented amount of competition as businesses experiment with different business models and technologies to deliver consumers video content. Both ISPs and over-the-top providers deliver video on a variety of formats including traditional programming, on-demand, and “on the go” options. In fact, there are so many options—Netflix, Hulu, Amazon, iTunes, Google Play, YouTube, Vudu, HBO Go, Dish Online, Crackle, etc.—that consumers have more choice today in video programming than ever before.

These changes are not only occurring in the United States, but also globally. Worldwide there are hundreds of legitimate streaming services that consumers can access. And consumers are accessing this content in new ways. Whereas we used to measure the percent of household with a TV (96.7 percent in the United States in 2011), we now measure the percent of households with an Internet-connected TVs (20 percent in the United States 2011). Worldwide there are 42 million homes with Internet-connected TVs. And even this metric misses out on the millions of households who access video programming on their personal computers, tablets, smart phones, and other devices.

The benefit of all of this innovation is not just more access to content and services for consumers, but also economic benefits from growth in these industries. According to the MPAA, the film and television industry supported 1.9 million jobs and $104 billion in total wages in 2011 in the United States. This will likely continue to grow if the United States retains its dominance as a net exporter of creative content.

The question “what’s on TV?” is irrelevant. Increasingly consumers now can watch the content they want, when they want and where they want. There is no question that the media environment today has changed tremendously over the past decade. As policymakers consider the role of regulation in the video marketplace they should be cognizant of the many successes that we have already seen. Policy should continue to support the wide variety of content that consumers enjoy—from big budget, high-quality movies and TV shows to homemade videos of cats—and the wide variety of platforms and technologies consumers use to watch this content. In addition, policymakers should be wary of crafting policies that give an unfair advantage or disadvantage to a particular platform or technology and work to take down any existing policies that create an uneven playing field. For example, they may consider investigating potential reforms to compulsory licenses better suited to the changing media market.

Doing so can help ensure that all stakeholders in the video marketplace—from the content creators to the distributors to the technology companies—continue to innovate and prosper and that tomorrow’s consumers will have even more access to video programming than today’s.

Photo credit: Evan Long

Print Friendly

About the author

Daniel Castro is a Senior Analyst with ITIF specializing in information technology (IT) policy. His research interests include health IT, data privacy, e-commerce, e-government, electronic voting, information security and accessibility. Before joining ITIF, Mr. Castro worked as an IT analyst at the Government Accountability Office (GAO) where he audited IT security and management controls at various government agencies. He contributed to GAO reports on the state of information security at a variety of federal agencies. He has a B.S. in Foreign Service from Georgetown University and an M.S. in Information Security Technology and Management from Carnegie Mellon University.