Recent woes for Netflix offer a lesson in market economics, according to editors at the Washington Examiner.
Just a few months ago, Netflix was a rising star that had destroyed earlier titans: the broadcast and cable networks. “The company doesn’t want to be a leader in video,” one analyst wrote, “or even the leader in video — it wants to monopolize the consumption of video; to become TV.”
But HBO, Hulu, Amazon, and even old network and cable giants aren’t going to just sit back and let that happen. So today, technologies compete, creative producers compete, and so do platforms and networks. This is unnerving for individual companies but delightful for customers, who have countless options for getting movies, television, and other video content. …
… Here’s where the lessons come in.
In the middle of the last decade, senators and the Federal Communications Commission pushed for mandatory “a la carte” regulations. Cable providers and programmers should be required, they said, to allow customers to buy only the channels they wanted. McDonald’s doesn’t force you to buy the whole meal deal if you just want fries, why should Comcast force you to buy TBS if you just want TNT?
Some cable providers supported regulations like this. Most opposed the mandate, and there was a stalemate on Capitol Hill and in the regulatory agencies.
Today, consumers have far more freedom than any a la carte mandate could have provided them. …
… The lesson of all this is that if something enjoys enough demand and is technologically feasible, the market will provide it without regulators getting in the way and bossing people around. If you can’t see how a service will be provided, or by whom, have the humility to admit that you’re clueless about what the sector will look like in 10 years.