In the middle 1700’s Adam Smith explained a framework which provides innovators all the encouragement they need to continue to develop new technologies. The force of the free market, the invisible hand as Smith referred to it, recognizes that individuals pursuing their own interest frequently promote the good of society, such as with new products or services, regardless of whether than was the aim of their intentions. As Adam Smith explained, “It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
A free, competitive marketplace allocates resources where they are most efficient as directed by the customer’s needs and desires. Providers move to fulfill those needs and profit from their endeavors. This process empowers the consumer.
Free market forces are continuously on display in the innovation industry as new ideas, products, services and companies constantly emerge. Because of the success, great technological leaps forward are routinely expected. Industry gadflies often wonder aloud why there is not faster and more innovation to their liking, rarely reflecting on the ever increasing pace of change and steady history of rapid innovation. Competition in the marketplace drives this furious pace of change. Predictably the completion spurs further innovation in turn providing greater choice to consumers. Whole industries have to change and redefine themselves.
One example is what until yesterday one may have referred to the “cable industry,” but today would refer to it as the “internet and television industry,” following the name change of “National Cable and Telecommunications Association” to “NCTA – The Internet & Television Association.” While the name change of the industry’s primary trade association is interesting, the real transformation, of course, has been underway for years, as individual “cable companies” are increasingly “tech” companies.
Most of the work of cable companies is now being done in the cloud as software, not in laying wires in trenches through the earth. To think, just a couple years ago some got it so wrong continuing to believe that broadband networks were and would be merely “dumb pipes.” They have emerged as technological change agents, becoming part of the software boom. Recall the words of Comcast CEO Brian Roberts in 2013,”That’s how you build a software company. In fact I think we would describe ourselves more as a technology and innovation company…”
Continuing on its software innovation path, yesterday Comcast announced that it was going to make available a “Netflix Beta Program” ultimately leading to a formal rollout to X1 users across the country by the of the year following the beta phase. The program will enable X1 customers who are also Netflix customers “to watch live, On Demand, DVR, and Netflix programming — all in one place.” Importantly, the new offering will maintain the innovations that Comcast has advanced in previous years, such as the voice control, originally developed to assist those who could not easily see or use the manual remote control, which has proved wildly popular and deployed across the platform.
Consumers can now access their content in an even more convenient way. This marketplace response happened because consumers desired greater ease of access. While there are many ways to express it, the fact of the matter is that understanding the success of the free market is pretty easy — competition to earn a customer’s dollar encourages those in the market to compete with better and better products and services. That is to say, they innovate. In this case, Comcast is stepping up to improve video entertainment options. There is simply no more successful approach then allowing the invisible hand to help us all.
