America’s Private Video Market Success

America’s Private Video Market Success
May 18, 2013

Scott Cleland

Scott Cleland is a precursor: a proven thought leader with a long track record of industry firsts.... (read full bio)

It’s hard to be a “public interest” group when private interests better serve the public.

Free Press, which effectively defines the “public interest”  as being against private interests in media, communications and technology, just  issued an anti-cable diatribe, apparently out of frustration that  so few people are listening to them.

In classic Free Press fashion, their new white paper is a solution  in search of a problem. They seek stricter neutrality regulation and bans  against usage-based broadband pricing. At core, they dream of a ‘public’  Internet largely devoid of any private (corporate) influence.

With that agenda in mind, they try to manufacture a problem in  their white paper: “Combating the Cable Cabal: How  to Fix America’s Broken Video Market.”

Free Press’ problem is reality. The facts show America’s video market is the most  vibrant and successful in the world. It’s nothing like the selective,  out-of-context, fact-challenged monstrosity Free Press attempts to paint.

America has more and better video content available, on more  technologies, from more providers, in more ways, on more devices, with more  viewing time options, than any other country by far.

America’s entertainment dominates the world market and is a leading U.S. export. America also dominates virtually every dimension of the Internet video marketplace.

If anything, America’s video market is among the most vibrantly competitive,  innovative, and value-added in the economy and the world. Like every industry,  it is far from perfect, but it certainly is not “broken” by any objective  measure.

Remember a few years ago, Free Press’ Save the Internet coalition was peddling the bogus charge that America had fallen behind in broadband in hopes of inciting government to intervene broadly in the competitive broadband  market.

Then, like now, Free Press’ claimed broadband “problem” was devoid  of reality.

Free Press selectively ignored that America is the only nation in  the world with a second national wire line network – and that cable in many ways  was much easier to upgrade to fast broadband capability than the more regulated  public telephone networks that are standard around the world.

Free Press also ignored that Europe’s early broadband speeds were  destined to hit a wall because European price regulation left no money for long term capital  investment in fiber optic networks.

And Free Press ignored that America was investing more in 4G LTE wireless broadband service than any other country, making America the world  leader in mobile broadband speeds.

Another bogus Free Press charge is that America’s private industry  is not working hard enough to promote universal broadband service. The reality  is that cable offers wire line broadband service to 93% of the country; wireless  offers it to 94%; and satellite extends the reach of cable and wireless  availability to 98% overall.

Recent NTIA numbers confirm that Free Press’ assessment here is way  off-base. NTIA recently reported that 98% of Americans have access to > 3Mbps, 94% to >10Mbps, and 75% to >50Mbps.

Free Press also ignores how technological change and competition  have transformed the American video marketplace and created a vastly superior  value proposition for the American consumer than ever before.

Free Press focuses on cable programming costs going up. However,  this ignores the natural competitive trend of quality programming migrating to  secure pay TV platforms, because of the decline in free over-the-air broadcasting, rampant video piracy and the deep decline in DVD sales. Thus this  is a natural technological and business evolution to protect valuable property,  not an exercise of market power.

Free Press also selectively looks at cable bills increasing in excess of inflation while ignoring the vast increase in value American consumers are enjoying. Consumers are getting: more video choices, better quality content,  more conveniently, over more  devices, in more places.

Compared to the high total cost of a family attending sports  contests, concerts, or plays; going to the movies in a theatre, or going out to  eat, the entertainment value Americans enjoy from their home pay TV provider,  whether it be cable, satellite or telco, is relatively the best available entertainment value for American consumers.

In sum, Free Press and others who want public networks and media to replace private networks and media over time have to recognize reality.

American consumers have spoken loudly with their hard-earned  dollars. Property-based, for-profit video models are vastly outperforming public not-for-profit models in the video market. It isn’t even close.

[First posted at the Daily Caller]

Scott Cleland

Scott Cleland is a precursor: a proven thought leader with a long track record of industry firsts.... (read full bio)