Video Entertainment "Market" Now Smashes Separate Regulatory Walls between "Content and Apps" and "Delivery"

The new move by T-Mobile US video streaming business is portrayed by the company itself, and news reports, as representing competition with cable TV.

“The Un-carrier will build TV for people who love TV but are tired of the multi-year service contracts, confusing sky-high bills, exploding bundles, clunky technologies, outdated UIs, closed systems and lousy customer service of today’s traditional TV providers,” said John Legere, T-Mobile US CEO.

A few reports correctly described the service as a streaming offer more akin to over-the-top services offered by AT&T, Dish Network, YouTube and Netflix.

But that might be quite the point. T-Mobile US itself describes its move as representing a move into the $100 billion revenues subscription TV market dominated by cable and telco suppliers.

““We’re in the midst of the Golden Age of TV, and yet people have never been more frustrated by the status quo created by Big Cable and Satellite TV,” said Mike Sievert, Chief Operating Officer of T-Mobile.

The over the top service represents the “successor” service to linear TV, virtually all observers agree. That is why Disney is launching its own retail streaming services, for example.

And that is perhaps among the most-important ramifications of the move. In the application business--including the application businesses traditionally operated by telcos and cable TV--app delivery has been decoupled from the use of access networks.

Relevant competition for cable TV includes satellite and telco services, but also DirecTV Now, Netflix, Amazon Prime, Hulu, Sling TV and other services, with additional competition coming from Facebook, YouTube and many social networking apps.

In other words, the traditional regulatory distinction between unregulated “content or data services” and regulated access service providers is evaporating. Netflix and others create their  own content, bundle and license content and deliver that content.

That makes Netflix (if not a “perfect” substitute) a rival for linear TV subscriptions. The move by T-Mobile US into the OTT video subscription business represents that evolution.

Streaming services might be owned by app providers (social media, YouTube), commerce providers (Amazon), content studios (Sony, Hulu), or distributors (AT&T, Dish Network, Verizon, Comcast).

Whomever the owner of the assets, the new reality is that content creation, packaging and delivery now is becoming independent of the access mechanism. That will--or should--eventually have regulatory implications of major scope.

Defining the scope of a “market” now is more complicated--and much broader--than it once was.