Americans live in a golden age of mass media. News, entertainment, technology, and communications firms have experimented with new content and business models, leading to an abundance of consumer options. Despite this, many policymakers, scholars, and journalists mischaracterize these industries as monopolistic or anticompetitive—an error largely caused by a static understanding of competition.

Competition in the real world rarely resembles the perfect competition models from Econ 101. The competition in media markets is frequently made up of a few incumbent firms and numerous start-ups constantly jockeying for (usually short-lived) competitive dominance. A narrow “snapshot” of an industry often hides, rather than illuminates, the considerable upheaval occurring in media markets. An apparently unassailable incumbent can become a has-been a few years later, outmaneuvered by upstarts or an unforeseen competitor from a different industry. Established, dominant firms and industries like local newspapers or flip phones are upended by Internet news and smartphones, respectively—this can happen in a matter of only a few years owing to unforeseen consumer habits and competitive pressures.

Increasingly, media is online, decentralized, and platform-based. Traditional categories like “creator” and “consumer” are breaking down, and network effects—where more users attract even more users—are unpredictable. Firms use multiple and differing strategies for revenue, including advertising, subscriptions, and freemium. In modern media markets, traditional measures of market power, like industry concentration or profits, often mislead policymakers about what policies are pro-consumer.

Media Metrics, a Mercatus Center research project, captures various measures of competition, prices, and media quality through time. Despite the sky-is-falling rhetoric in some quarters, there are compelling reasons to be optimistic about the benefits to consumers as firms churn out more content, more connectivity, and more devices. Schumpeterian creative destruction is what drives the high-risk, high-reward innovation in American technology and communications markets. Onerous regulations in such markets tend to protect inefficient incumbents from competitors, induce rent-seeking, and slow innovation—all to the detriment of consumers.