What future for video?

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James Speta of the North Western University School of Law argues that in the future, we face an effective reality of unlimited video channels. Media regulation will be therefore complex as traditional media regulation affected content indirectly by regulating market structure but the unlimited channel scenario suggests that this will be less effective because unlimited channels will reduce the market structure effect. This has significant implications for subsidy policies in content creation and distribution. Subsidies may still be needed if non-economic goals are important but the outcome may well be to reduce the politics of subsidies.

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What future for video?

  1. 1. What Future For Video? Professor James Speta Northwestern University School of Law [email_address] International Institute of Communications Washington D.C., December 2, 2009
  2. 2. Overview <ul><li>The reality of unlimited channels </li></ul><ul><li>It is even worse than unlimited channels </li></ul><ul><li>Improbable predictions </li></ul>James Speta
  3. 3. Known Disruptors James Speta $$ Ads
  4. 4. Unlimited Channels <ul><li>Traditional media regulation: indirectly affect content by regulating market structure </li></ul><ul><li>Unlimited channels reduces market structure effect </li></ul><ul><ul><li>Subsidies may still be needed if noneconomic goals are important </li></ul></ul><ul><ul><li>Communications regulation potentially reduces politics of subsidies </li></ul></ul>James Speta
  5. 5. <ul><li>Unlimited channels fragments audiences </li></ul><ul><li>Unlimited channels affects mixed revenue business models </li></ul><ul><ul><li>Mixed revenue business models in theory superior to either advertising or subscription </li></ul></ul><ul><ul><li>But subscription fees depend on product differentiation which may not persist with unlimited channels </li></ul></ul>James Speta
  6. 6. The Real Challenger James Speta
  7. 7. Competition for Attention <ul><li>Unlimited channels understates shifting demand </li></ul><ul><ul><li>Consumers seek to fill time (Owen 1992) </li></ul></ul><ul><ul><li>“Video” not a market </li></ul></ul><ul><ul><ul><li>Surfing replaces watching </li></ul></ul></ul>James Speta
  8. 8. <ul><li>Price discrimination affected </li></ul><ul><ul><li>Price discrimination important to video business models </li></ul></ul><ul><ul><ul><li>Windowing </li></ul></ul></ul><ul><ul><ul><li>Subscription fees for certain windows/distributions </li></ul></ul></ul><ul><ul><li>Substitutes impede price discrimination strategies </li></ul></ul><ul><ul><li>Windowing, in general, much more difficult </li></ul></ul><ul><ul><li>Current models unbundling programs </li></ul></ul>James Speta
  9. 9. Predictions <ul><li>Structural regulation must continue to decline </li></ul><ul><li>“Broadcasting” programs declines </li></ul><ul><ul><li>Fewer mass appeal programs </li></ul></ul><ul><ul><li>Lower production budgets generally </li></ul></ul><ul><ul><li>Further enhancement of power of sports programming </li></ul></ul>James Speta
  10. 10. <ul><li>Technological attempts to replace discrimination aspects of business models </li></ul><ul><ul><li>Windowing through quality or device? </li></ul></ul><ul><ul><li>Behavioral advertising, product linkages </li></ul></ul><ul><ul><li>Re-bundling through portals </li></ul></ul>James Speta

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