As a hypothetical example, imagine if Apple had sourced the M1 chip from a third party which it now proposed to buy. There would be intellectual property at stake there too. This case is no different.
And indeed, in the Apple hypothetical you could well expect consumers to be better off and for exactly the same reason: if Apple purchases an input (the M1 chip) from a monopoly supplier (the hypothetical non-Apple-producer), vertical integration removes one monopoly markup.
I do not know exactly what will happen in this case, but it seems like Amazon's proposing to buy a single studio is very unlikely to result in harm to consumers.
The copyright issues do not make the case relevantly different.
I didn't say Intellectual Property, I said Copyright. Copyright—much more than other forms of IP—has a significant impact on our shared culture and cultural transmission. Yes, there may be other factors with IP that we should consider when dealing with mergers, but end-users and everyday people are harmed much much more often due to copyright issues than they ever are due to patent and trademark issues.
> I do not know exactly what will happen in this case, but it seems like Amazon's proposing to buy a single studio is very unlikely to result in harm to consumers.
Sure, and I do not know exactly what will happen when we place a straw on a camel's back. But in each case it seems like it's very unlikely that the camel's back will break. It's a sorities paradox in reverse: Which individual acquisition is the point at which network effects start creating problems. Each individual M&A is unlikely to be the one that causes the problem, and yet if you allow each one because it is unlikely, eventually the system stops functioning correctly.
Based on this line of reasoning, literally any acquisition that increases the power of copyright holders has downsides.
I'm not saying acquisitions can't also have have upsides. I'm not saying that the net benefit can't be positive for the end-consumer.
I agree with huitzitziltzin that it's possible that this acquisition is net welfare-improving. I think we probably mostly disagree in:
- the extent of the downsides to increasing the power of copyright holders, AND
- the probability that this particular acquisition is net welfare-increasing
I would argue yes and the government has argued it, too, when they forced movie studios to divest their stakes in movie theaters.
The central argument is whether Amazon specifically is a monopoly in any of the industries in which it operates, so as to be able to charge higher prices you speak of — that's not what's happening.
In fact, the GP comment laid out exactly why vertical acquisitions often improve consumer welfare, in the case that the company being sold is itself a monopoly:
> And indeed, in the Apple hypothetical you could well expect consumers to be better off and for exactly the same reason: if Apple purchases an input (the M1 chip) from a monopoly supplier (the hypothetical non-Apple-producer), vertical integration removes one monopoly markup.
I think it's hard to avoid the conclusion that increasingly strong copyright holders (given all of the media mergers) implies increasingly strong copyright law.
Add that to the expanding ability of parsing for copyright violations and I can imagine the Disney Police parachuting in to arrest you for that counterfeit Micky Mouse watch 150 years after Steamboat Willie.
No human consumes enough TV media to warrant subscribing to every single streaming service at the same time, and there's certainly a lot that can be improved to make the "a la carte" experience of selectively subscribing/unsubscribing to services on demand more seamless — but the way the industry operates across the entire supply chain is dramatically different today.
Now we have subscriptions. It would be as crazy as it sounds, we are almost at the point where a preference of Picard over Kirk could have an effect on which toilet paper you end up buying.
But I agree in so far as that it is far from as bad as it could be if they tightened down on unsubscribe/resubscribe (which I think will inevitably happen one day). Still, I've been to that party that end with one room full of "Amazons", one room full of "Neflixers" and those left over wondering what they all talk about.
I really like what you said here. A familiar analogy that I like to use is cable TV: Netflix and Amazon are just "channels", each with different shows. When one half of the room is full of "Amazons", that's just the half of the room that's interested in some subset of shows not too dissimilar from what it might have been like to be a regular viewer of a serial television series in the days of yore.
However, whereas before, you had to subscribe to all of the channels in bulk. Today, you have the option to pick and choose the "channels" you want to pay for on any given month given the TV shows you care about. I think we agree that the experience to do this can be improved, but I think we also agree that it will inevitably happen one day.
The average human being consumes 2-3 TV shows at most on any given month. In the absolute worst case, that extends to 2-3 separate streaming subscriptions. The only thing that changes over the course of the year is which 3 TV shows one is watching (and therefore which underlying streaming service they care about).
The future isn't a $200 bundle of every streaming service available on-demand; the future is an LRU cache that automatically unsubscribes you from a streaming service if you haven't watched a show on it in the last month, and then re-subscribes you the moment you do. Given the current price of streaming services, it probably works out closer to (at most) $45/month, on average.
The future is rolling window two years subscription or something along those lines, because someone will inevitably build that LRU and it will be quite poplar for all seven weeks of operation.
And addressing it via enforcing separate distributors and producers allows the copyright issue (the real issue) to go unchecked, since politically, it’s harder to attack it as a problem.
It might even be politically necessary for people to feel the pain before we can get back to decent copyright lengths.
So, from my perspective, any system that allows those powerful entities to continue to accumulate more power and wealth is always going to harm efforts to change copyright law.
We need to weaken the power that companies wield over copyright law, and that's harder the more powerful those companies are.
I fully agree w/ this criticism of copyright law. I do not think that has a substantial intersection w/ the competitive effects of this proposed acquisition.
My understanding is that MGM has a large holding of copyrighted media, and therefore substantial interests in protecting and extending the rights and terms afforded by copyright law. For example, they have led consortiums of large entertainment companies in the past to bring copyright lawsuits to the Supreme Court (MGM Studios, Inc. v. Grokster, Ltd).
My other understanding is that Amazon is a very powerful corporation, that has complex interactions with copyright law already (they are a distributor of both physical and electronic media through Amazon Video and Amazon Music; they are a content producer through Amazon Games studios and Amazon Original Series [also already built on the back of other acquisitions]). This acquisition gives another significant interest in copyright protection to an entity that is already extremely powerful.
We're going to M&A our way to another Mouse on the copyright front (which was also built largely on the back of "mostly-harmless-at-the-time-but-problematic-in-aggregate" acquisitions), until massive swaths of our cultural expression are owned by a very small handful of organizations.
I suppose maybe a disconnect we have is there is a non-financial "consumer welfare" question that I don't see being asked. Consumer welfare is generally only approached from the financial perspective of: "what will the financial cost to a consumer be to obtain the rights to consume media"; I don't see anyone attempting to defend consumer welfare from a _cultural_ perspective of: "Which entities do we have to ask permission from in order to interact with important elements of our culture and society?"
The idea that media is "consumed" is an artifice. When you consume a media product, it actually still exists and nothing is meaningfully physically depleted.
Intellectual property is an artificial law construct meant to "promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries" according to the Constitution.
Sitting on your ass and collecting rent every time someone watches a movie from the 1940's for the next 150+ years--which is an action on a copy of a work and not really equivalent to anything involving real property--is not promoting the progress of anything but the wealth and power of media conglomerates. Combine this with the ability of money to buy laws and you are looking at establishment of permanent legacies through copyright.
This isn't some kind of new idea, in the 1930s the US government forced movie studios to be separate companies from movie theaters on antitrust grounds.
On the other hand, it is their content.
I find this to be sort of self-contradictory. On the one hand, monopolies are bad, but on the other, having 5+ platforms is bad. Which is it?
My (perhaps unpopular) opinion is that having more and more streaming platforms ("balkanized", to use your term) is extremely good for consumers. The low barriers to entry and the near-zero marginal distribution costs make this the perfect industry for competition (and as a result, consumer welfare).
It's a common misconception that having N streaming platforms necessarily means that consumers spend N * subscription cost dollars per month, but that's not a sensible user pattern. Nobody consumes from every single streaming service at the same time. Instead, we have a sort of TDMA style consumption of media that allows us to constantly subscribe/unsubscribe/resubscribe from services as we chew threw our respective TV show backlogs. Savvy consumers have benefited the most from this reality, and it's only a matter of time until we see subscription management products that extend this benefit to un-savvy consumers in seamless ways.
One day, streaming services will look to consolidate so as to be able to extract monopoly rents. These are horizontal acquisitions that would be terrible for consumer welfare, and those are the kinds of acquisitions the US FTC would likely police.
The problem isn't that there are 5 platforms; it's that they don't have the same content.
Having multiple platforms have different content is not all that different from having multiple TV channels have different content, except now I'm not forced to subscribe to a giant bundle of channels when I only realistically use 2-3 at any given time.
It’s their content and they can do what they want; but you can’t stop piracy
And Amazon Prime Video is quite good. Certainly HBO stuff was never available elsewhere (except for purchase or physical rental). Yes, Disney siphoned some stuff off the other services, but again much of that wasn't available for subscription streaming pre-Disney+ (which at current pricing is actually a pretty good deal).
I really can't be bothered with piracy unless I really want to see something and just can't find it elsewhere.
I said we shouldn't uncritically allow massive copyright holders to both produce and distribute their media.
https://en.wikipedia.org/wiki/United_States_v._Paramount_Pic....
I think you have to examine vertical integration in copyright affected industries differently than you would in, say, the vertical integration of steel production with a company that consumes steel.
The interaction with copyright invariably creates issues for the end-consumer, which is why consumers in the media ecosystem are often better off when distributors and producers are separate.