March 12th, 2015

Panel 6

Privacy Concerns Rise as Consumers Seek Substitutes for Traditional Television

By: Gerard Cicer

For broadcast and cable networks, the writing is on the wall. Any person with an eye or ear toward pop culture and consumer trends knows that traditional television viewership is declining. Whether it be network news casts that have been replaced by internet news aggregators or former staples, such as premium cable movie channels—uprooted in favor of paid streaming services, consumer tastes have shifted away from the tube, towards alternative internet based programming. A recent Washington Post article, found here, gives little hope to traditional television media, in a chronicle of the accelerating trend towards internet based substitutions. However, in the wake of accelerating biannual decline, to the tune of almost 10 percent, author Cecilia King reveals that broadcast and cable networks are fighting back. These networks are attempting to claw back some market share, by entering the very market that is quickly eroding their decades old platform.

The last few years has seen a rise of online video viewership, as the Post article points out, roughly “40 percent of U.S. homes”, up from just 36 percent last year, subscribe to at least one paid internet streaming service like Netflix or Hulu. For traditional networks, hungry for advertising fees and licensing arrangements, this trend is difficult to ignore. Networks such as HBO, NBC, and CBS have either launched or announced plans for streaming services to compete with current internet incumbents. While new service providers in an already dense market unquestionably strokes the public’s desire for more price and quality competition, the increase in service options comes with a matched increase in opportunities for consumer privacy information appropriations and mishaps.

With these new entrants, the internet programming industry is becoming more diffuse. Consumers will likely no longer be giving information merely to the cable company and one other internet provider such as Netflix. For example, I have already eschewed cable for a combination, though not simultaneously, of Netflix, Amazon Prime, HBO-Go and Hulu subscriptions as well as “free” providers like YouTube and As in my case, consumers are no longer putting their identifying information, address, credit card information, email address, viewing habits in the hands of one or two companies. Rather, in order to match and surpass the level of choice they once had through network and cable TV, consumers may very well sign up for multiple streaming services, the combined cost of which is still less than traditional television. The rub of course is, that to access these services, consumers must in effect deal with multiple companies and provide varied information to each of them. This raises privacy concerns that are much more nascent than when there was only one video entertainment provider.

Ask any regular user of “free” video providers such as YouTube and they will tell you that the website has an uncanny ability to recommend new videos based on your history and subscriptions, as well as tailor advertising towards your interests. While you do not necessarily have to sign-up to YouTube to access its content, linking your Google account to YouTube arguably enhances your experience and augments this tailoring. Paid subscription services like Netflix operate similarly by tracking your preferences and spitting out recommendations. There is no doubt that this preference data, collected by Google, Netflix, and the like, is valuable—evidenced by the ubiquitous tailored advertising located on many websites. In addition to preference metadata, paid services require you provide them billing information, meaning, that you must give them, among other things, your credit card information and name. With the entry of more paid services, consumers must give this static data to more and more companies. A short example may shed light on one concern presented by only one provider. Perusing Netflix’s stated privacy policy as of March 12, 2015, reveals that it sends consumer information oversees for what it bills as provision of services. Netflix notes that “the countries to which we may transfer information may not have as comprehensive a level of data protection as in your country, although your personal information will continue to be protected in accordance with the standards described in this policy.” While it is comforting that Netflix will endeavor to protect our information, the information is not invulnerable to theft or misappropriation overseas.

But what is a consumer supposed to do when faced with an increased number of service providers, each with their own informational requirements and privacy policy? The question is daunting and may call for a more unified industry wide standard to bring privacy sharing policies back in line with consumer expectations as to traditional television providers. While this is by no means the correct answer to the question, one thing is clear, with more market participants, the opportunities for perceived and actual privacy breaches increase, an unsettling proposition for consumers.