A Consumer-Welfare Framework for Media Competition, Mergers, and Government Barriers

​Executive Summary
​Media Competition Is an Attention Market, Not a SiloMedia competition is no longer best understood as a contest among separate industries such as cable, broadcast, streaming, social video, gaming, podcasts, music, and news. Consumers do not live inside those regulatory boxes. They allocate scarce time across them. That means modern media is best understood as an attention market. This framing matters because antitrust debates too often begin with the wrong question. They ask whether one firm is “too big” or whether one deal sounds politically uncomfortable. The better question is whether consumers are likely to face higher prices, reduced output, lower quality, or slower innovation. That is the core of the consumer welfare standard, and it remains the best guardrail against turning antitrust into industrial policy.

This policy brief builds on the pro-innovation framework in the report, Innovation Over Intervention. The central insight is simple: competition policy should protect consumers and the competitive process, not punish success, freeze market structure, or protect legacy business models. The evidence points to a saturated, dynamic, and increasingly cross-platform media market. Streaming reached a record 47.5% of total TV viewing in December 2025, while broadcast and cable still accounted for meaningful shares of viewing. Consumers also remain highly price-sensitive. Recent digital media consumer research found average streaming spend per subscribing household at $69 per month, widespread adoption of ad-supported tiers, and a substantial willingness to cancel if prices rise.

Consumers multi-home, churn, downgrade, bundle, substitute, and discover content across platforms. A household choosing among Netflix, YouTube, TikTok, ESPN, a podcast, a video game, a livestream, or cable news is making one basic economic choice: how to spend scarce attention. The greatest threat to competition in media is often not at the private scale. It is government-made barriers. Licensing restrictions, local franchise obligations, permitting rules, spectrum constraints, carriage mandates, retransmission frameworks, compliance costs, liability exposure, and regulatory capture can protect incumbents and reduce entry.

The Market Definition Mistake: Consumers Spend Attention Across Formats
The first task in media policy is to define the market correctly. If the market is defined too narrowly, competition disappears by assumption. That error can lead lawmakers and agencies to treat normal rivalry as monopoly power. Consumers do not experience media as separate categories. They experience it as a choice among substitutes for time.

A consumer may watch a streaming series, scroll short-form video, play a game, listen to a podcast, watch a sports livestream, read a newsletter, stream local news, or follow a creator. These options differ in format, but they compete for the same scarce resource: attention.

The Communications Marketplace Report is a useful public-sector starting point because it evaluates communications and media markets broadly rather than assuming every technology sits in a separate policy silo. The rise of connected TVs, mobile devices, creator platforms, virtual bundles, and free ad-supported streaming makes narrow market definitions increasingly obsolete. The report Competing for Attention helps formalize this concept. Even when a service has a zero-money price, it still competes because consumers pay with time, data, and opportunity cost. That insight is critical for antitrust. A free video platform can limit access to paid content. A podcast can constrain a documentary. A game can constrain a movie. A livestream can constrain cable news. This framing contributes to the policy literature by integrating market definition, consumer welfare, and government barriers into a single framework. In media, competition should be measured by consumer substitution across attention uses rather than by legacy distribution labels.

The Competition Map: Media Rivalry Now Runs Across Platforms, Devices, and Formats
Media rivalry is now multi-layered. Policymakers should map consumer behavior rather than legacy industry labels. Social video and creator platforms are central competitors, not fringe alternatives. They compete directly with streaming, traditional television, and news for viewing time, advertising dollars, and cultural relevance. Platform roadmaps, such as YouTube’s 2026 product update, show how quickly firms iterate through creator monetization, AI-enabled tools, TV-screen viewing, and new formats. Subscription streaming competes on more than just the monthly price. It competes through content investment, recommendation quality, ad tiers, bundling, release cadence, user interface, sports rights, and cross-platform fandom. The relevant consumer welfare question is not only “What is the subscription price?” It is “What value does the consumer receive?”

Broadcast and cable still matter, especially for live sports, local news, and appointment viewing. Streaming reached 47.5% of total TV viewing in December 2025, while broadcast and cable remained meaningful parts of the market. That shows substitution and coexistence, not simple replacement. Traditional outlets also remain numerous. The broadcast station totals released for March 31, 2025, showed 33,524 licensed broadcast stations, including 1,767 full-power TV stations and 15,622 AM/FM radio stations. That does not prove every local market is competitive, but it undercuts simplistic claims that consumers face only a few voices or formats. News distribution has also changed. 

News competes through search, social feeds, short-form clips, podcasts, newsletters, streaming channels, and direct subscriptions. The competitive field is no longer defined by ownership of a printing press or broadcast tower. Gaming, music, podcasts, and social chat are real attention rivals. They may not look like “television” to regulators, but consumers experience them as substitutes for leisure time. A household deciding between a soccer match, a game, a long podcast, or a documentary is still allocating scarce time. Streaming adoption and traditional pay-TV penetration figures reflect recent subscription data, which show high streaming penetration and declining pay-TV adoption.

Consumer Power Is Stronger Than Policymakers Often Admit
Consumer power in modern media comes from low switching costs, multi-homing, bundling, churn, ad-tier migration, and product iteration. Low switching costs are central. Consumers can add, cancel, downgrade, upgrade, or rotate among services. Even when a platform is popular, it must continue to earn attention. Popularity is not captivity. Multi-homing is normal. Consumers do not choose one media provider. They typically use several platforms across paid subscriptions, free ad-supported services, social video, podcasts, music, gaming, and news. This makes it harder to sustain durable harm because users can reduce engagement without exiting entirely.

The video market is mature and saturated. Recent streaming subscription data found that 91% of U.S. internet households subscribe to at least one streaming video service, while traditional pay TV has fallen to 41%. The same data describe consumers averaging nearly six video subscriptions and spending about $109 per month across video services. Consumer price sensitivity is also strong. The digital media consumer research cited earlier shows that consumers are increasingly adopting ad-supported tiers and remain frustrated by recurring price increases. These facts matter. A market where consumers churn, downgrade, use ad tiers, switch between homes, and substitute across formats is not a captive market. Firms may test prices, bundles, and ad loads, but consumers respond.
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The Consumer Welfare Standard Keeps Antitrust Focused on Harm, Not Size
Media mergers and conduct should be evaluated in terms of consumer welfare, not political aesthetics. The 2023 Merger Guidelines provide an analytical framework, but that framework must be applied carefully in dynamic attention markets. The right question is not whether a deal sounds large. The right question is whether it is likely to harm consumers.

The consumer welfare checklist has four parts: 

1. Prices. Would a merger increase subscription prices, bundle prices, ad-tier prices, or effective prices after adjusting for quality? A higher nominal price is not automatically harmful if it comes with higher quality, broader access, or more output. A stable nominal price can still harm consumers if quality falls.
2. Output. Would a merger reduce content production, distribution breadth, access, or availability? Output in media includes not only the number of titles but also distribution windows, sports availability, creator opportunities, and device access.
3. Quality. Would the deal worsen user experience, raise ad load, reduce privacy protections, degrade recommendations, or reduce customer service? In the media, quality is often the main competitive margin.
4. Innovation. Would the merger slow the development of new formats, creator tools, AI-enabled recommendations, interactive experiences, advertising technology, or distribution models? Dynamic competition often shows up first in innovation, not prices.

This approach aligns with the broader economic tradition in antitrust. Richard Posner’s Chicago School antitrust analysis helped move antitrust toward economic effects rather than political suspicion. Jennifer Huddleston’s explanation of the consumer welfare standard similarly warns against treating size as a substitute for evidence. Adam Thierer’s permissionless innovation framework adds the technology-policy corollary: experimentation should be the default unless clear harm justifies intervention.

Error Costs Matter Because Over-Enforcement Can Reduce Competition
In fast-moving markets, antitrust mistakes are not symmetric. False negatives occur when the government fails to stop anticompetitive conduct. False positives occur when the government blocks or punishes conduct that would have benefited consumers. Both matter, but false positives can be especially costly in dynamic media markets because they chill investment, reduce experimentation, and raise barriers to entry.

This is central to my recent report, Innovation Over Intervention. When policymakers treat scale, integration, or mergers as presumptively harmful, they increase uncertainty. That uncertainty raises the cost of capital, discourages investment, and can reduce future entry. This is also consistent with research warning that moving away from consumer welfare in digital platform markets can suppress innovation and efficiency. A high-tech digital platforms analysis cautions that categorically increasing antitrust enforcement risks errors that weigh against efficiency and consumer welfare.

The media market is particularly vulnerable to this problem because it changes faster than litigation does. A market that appears concentrated around one format may be contested by a new format, platform, or bundle before a case is resolved. Social video, FAST channels, creator studios, livestreams, sports streaming, and gaming all demonstrate this. 

A false positive in a media merger review can prevent efficiencies that would improve consumer value. It can reduce the exit opportunities for funding startups. It can preserve legacy firms that consumers are already leaving. It can convert antitrust into industrial planning, in which the government decides the “right” market structure rather than consumers. Hayek’s knowledge problem remains essential here: no agency can aggregate dispersed knowledge about consumer preferences, technology trends, creator economics, sports rights, and platform design as well as markets.

Platforms Can Be Gatekeepers and Value Creators at the Same Time
A stronger antitrust framework must recognize that platforms often create value by reducing transaction costs between creators, advertisers, distributors, and consumers. A platform can be both a gatekeeper and a value creator. Antitrust analysis must determine whether the net effect harms consumers. This point matters in media because platforms solve real economic problems. They help creators reach audiences, help advertisers find viewers, help consumers discover content, process payments, host user-generated content, support recommendation systems, and reduce distribution costs.

A platform economics analysis makes the broader point that courts should weigh alleged anticompetitive conduct against the procompetitive effects of platform business models. That is directly relevant to media, where intermediation can expand output and reduce discovery costs. Section 230 also belongs in this discussion because it lowers the cost of hosting user-generated content. 

A competition and content moderation analysis explains that liability protection allows platforms to host third-party content and moderate without facing crushing legal exposure. Weakening that framework can burden smaller rivals more than incumbents, reducing entry in creator-driven media markets. This is a major policy insight for media competition. If lawmakers weaken liability protections, increase compliance burdens, or impose content mandates, the largest firms may survive. Smaller platforms, new creator tools, and emerging distributors may not.

Synergies Should Be Judged by Consumer Value, Not Corporate Slogans
Media mergers often promise synergies. That word should trigger analysis, not cynicism. Synergies can be pro-consumer. Cost savings can support lower effective prices, more content investment, improved user experience, better recommendation tools, broader distribution, and stronger competition against larger rivals. But synergies can also mean restructuring and cost-cutting without clear consumer benefits. Disney’s integration-era materials regarding Fox show how major media combinations can be framed in terms of cost expectations and strategic integration in investor disclosures. Reporting around the Paramount–Skydance transaction likewise shows how large deals can involve restructuring and organizational changes.
This does not prove harm. It proves that lawmakers and agencies should ask whether claimed efficiencies trace to consumer welfare. 

A merger that eliminates duplicative overhead and allocates funds to better programming may benefit consumers. A merger that mainly cuts output, narrows distribution, or reduces creative risk-taking may not. The evidence matters.

The Real Monopoly Risk Is Government Barriers, Not Private Success
The most durable monopoly risk in media is not that consumers lack alternatives. It is the government that raises barriers that protect incumbents. Milton Friedman warned that government assistance can be a major source of monopoly power. The lesson is straightforward: private firms face entry, substitution, and innovation, while government-created privileges are protected by law. George Stigler’s theory of regulatory capture explains why regulation often ends up shaped by the regulated. A useful overview of regulatory capture scholarship shows that incumbents have stronger incentives and more resources to influence rules than dispersed consumers or future entrants do.

​Sam Peltzman’s political economy of regulation holds that regulators respond to political incentives rather than to consumer welfare. This matters in the media because the sector is politically salient. Politicians care deeply about speech, news, sports, cultural influence, and platform access. Hayek’s knowledge problem provides the deeper philosophical warning. Central planners lack the dispersed knowledge that market participants reveal through prices, experimentation, and consumer choice. Attempts to design market outcomes from above often fail because they cannot replicate market discovery. Ted Bolema’s recommendation that Congress clarify the role of the consumer welfare standard is useful here. His analysis of FTC policy argues that statutory clarity would reduce agency discretion and help prevent politicized enforcement.

The conclusion is direct: if policymakers want more media competition, they should reduce barriers to entry and expansion.

A Serious Pro-Competition Agenda Starts by Lowering Barriers
A serious pro-competition agenda should focus on two principles: disciplined antitrust and fewer government barriers.

1. Keep antitrust centered on consumer welfare. The standard should remain prices, output, quality, and innovation. If a merger or conduct harms consumers, challenge it. If not, do not use enforcement to preserve legacy firms or satisfy political pressure.
2. Treat the media as an attention market. Use broad evidence like the Communications Marketplace Report, cross-platform viewing measurement, and consumer behavior research. Do not define markets so narrowly that substitution disappears.
3. Apply error-cost humility. Fast-moving markets punish regulatory overconfidence. False positives can reduce investment, chill innovation, and entrench incumbents by raising compliance costs.
4. Prefer narrow remedies tied to demonstrable harms. Where harm exists, remedies should fix the harm, not create a permanent regulatory regime.
5. Reduce barriers to entry. Congress and state legislatures should review laws and rules that raise fixed costs for new distributors, creators, and platforms. More competition comes from easier entry, not more micromanagement.
6. Avoid industrial planning. Policymakers should not use antitrust to engineer the “right” number of media companies, protect favored content, or punish disfavored firms. That path undermines the competitive process.

Competition Is Created by Choice, Entry, and Innovation
Competition in media is broader, faster, and more dynamic than old categories suggest. Consumers shift attention across streaming, social video, cable, broadcast, gaming, podcasts, music, sports, and news. They multi-home, churn, bundle, downgrade, and substitute. That gives consumers more power than many policy debates admit. A merger may help or hurt consumers. The answer depends on evidence, not slogans. The consumer welfare standard provides the right test: prices, output, quality, and innovation.

The broader free-market lesson is equally important. A durable monopoly is usually created or protected by barriers, and the government is often the source of those barriers. Private markets discipline power through entry, substitution, and innovation. Government barriers can freeze markets and protect incumbents. The best path for Congress and state legislatures is clear: keep antitrust pro-consumer and evidence-based, recognize media as an attention market, reduce government barriers that suppress entry and experimentation, and prefer narrow remedies tied to demonstrable harms.

Competition in the media (and elsewhere) is bigger than any one deal. Policy should be, too.