posted by Kroc on Thu 30th Aug 2007 13:03 UTC
IconI hear often that when something new appears that "competition is good". The primary reasons competition is seen as good, are: it drives down prices; it gives consumers more choice; it pushes technology forward, quicker. Competition is not good because: competition is why consumers have to choose between HD-DVD and BluRay; competition is why DRM exists; and more. In this article, each of the supposed benefits of competition will be looked at in more detail.

'It drives down prices'

There are many cases where this is evidently true. Car manufacturers compete for better price points and deals. The cost of electronics is generally driven down.

However price != TCO.
The constant battle for lower prices has pushed quality and reliability to absolute lows.

Competition also prevents interoperability. This alone adds massively to the overall lag of the industry. Here's a 'what if' to demonstrate:

If, in coming up with a successor to the DVD, a format was collaboratively designed to be forwards & backwards compatible with most existing DVD players, yet offer high-definition on new equipment, then the new technology could be rolled out quickly and efficiently with almost zero fuss on consumers.

Instead, consumers are forced to buy new players, often new screens too, that are grossly overpriced and offer little benefit (It has been proven that screen size matters more than resolution, 720p is as good as 1080p with moving content at normal viewing distance, plus PC's have had 'HD' screens for years, for a few hundred bucks, not 1000's). And that's if the consumer even gets optimal output, what with the expensive cables needed, and getting the configuration right (I've seen HD screens running at SD simply because the consumer didn't know how to change the right option on the OSD - and they still didn't care, the picture looked good enough to them)

To view this 'high-definition' content on a PC, you need to have approved equipment. If you do not have a DRM enabled graphics card, cables, and screen then you have just paid more for a film, that looks exactly the same as a cheap DVD. As it stands, getting a fully approved media path on PCs is in such short availability at the moment that almost every perfectly capable PC currently in use by consumers will need to be heavily upgraded, or replaced entirely just to display more pixels, that the user's old screen already had.

High definition content and DRM has increased the cost of access for consumers, when existing equipment and standards are all adequate.

DRM has cost billions to produce, and proved ineffective every single time, only inconveniencing consumers in the end. You know how in cinemas they have an anti-pirating ad that makes pirate copies out as having worse picture quality? A pirated HD x264 video will remain crisp no matter what monitor it is played on. Try playing a BluRay on unapproved equipment and you'll get reduced picture quality, if a picture at all. :)

'It gives consumers more choice'

Choice is good when there's one agreed base standard, and a number of compatible approaches. For example, there are many Linux distributions, but they are all Linux, and they can all run the same software. They are 'flavours' of the same thing, that is a good choice. People like different flavours.

Choosing between HD-DVD and BluRay is not a matter of taste. They both do the same thing, they provide you with a choice you don't need to make. You wish to watch a movie, since both provide the same thing with no variance in features (the movie content is the same on both), the consumer is therefore having to choose between two of the same flavours, except these are expensive flavours, and one might not be around as long as the other, and it'll cost you more money to switch sides in the future.

Consumers just want things to work with a minimal amount of fuss. Having just once choice isn't always better, but in saying that "competition is good because it gives more choice" the difference in types of choices made above is ignored. Competition does not produce easier choices for consumers. All they get is added un-interoperability and complexity with competitive choices.

'It pushes technology forward, quicker'

This also raises TCO. People are upgrading and renewing computers faster than ever before. Rather than buying a machine and using it for 8 years, people are renewing every 3 years, often due to the lower build quality, and cheaper parts end up breaking sooner.

This is adding to an acceleration of environmental damage. Computers are cheap enough now that in many cases people would rather buy a new one than fix the old one, even if the only problem is a simple virus infection unbeknownst to them.

Technology would still move forward even without competition. People like Sir Tim Berners-Lee would still push forward software & technology. Linux would still exist exactly as it is now. What's more, without competition favouring half-baked standards and short-sighted designs, the difference industry-wide would be astronomical. Tell me, what would you prefer?:

  • A 1 GHz computer that was ultimately efficient, 100% interoperable with all equipment, all standards and with no proprietary lock-in;

  • A 4GHz computer running Windows Vista.

I certainly know what I'd find more productive. Even though computers like the Amiga and RISC OS machines are now all but gone, you can't help but marvel at how they excelled at what they did, compared to Windows at the time. Imagine an Amiga after 25 years of constant leading progress- a multimedia system right down to the hardware level. The IBM design we know now as standard (BIOS/BUS-IRQ) was a very poor decision for multimedia work. If it were Amiga instead of Microsoft, we could have been looking at computing hardware with 100x the graphical capability of existing technology. But that's just hypothetical really. The point is that competition has not picked the best of each generation, it's not picked the best interoperability nor given new competition equal footing when it's turned up.

Competition is why in 2007 we have PCs that take longer to start up than 10 years ago. There are endless excuses for why this is; but at the end of the day they're still excuses and not reasons. The reason is that competition has dulled engineering. An Amiga cold-booted in seconds, there was no shutdown - you just switched it off. Don't think that because new computers/OSes do more that that is a reason to take three minutes to shut down. It's an excuse, nothing more.

'Competition sets up non-competition'

Competition by it's definition is to beat the opponent. When the opponent is beaten, there is no need to continue with any of the competitive actions, such as lowering prices or improving technology. Competition ultimately ends with stagnation and vendor lock in. The amount that stagnation and lock-in has set back computing progress cannot begin to be calculated. One clear example is the period 2001-2004 where IE6 held a near 100% monopoly on the browser market. During that period no major revision of IE occurred (other than a popup blocker in SP2), Viruses, spyware and other malware exploded on the web. Even though tabbed browsing had been around for years, Microsoft had no need to add it, there was no competition. Microsoft had no monetary reason to benefit users any more.

We have Firefox and it's grass roots advertising campaign to thank for bringing some small amount of competition back to the web, but the damage has still been done. We're almost five years behind where the web should be, and consumers will continue to be plagued by malware on an unprecedented level.

'Competition also sets up anti-competition'

In order to beat someone, sometimes you have to cheat and sometimes you have to prevent the consumer from using any of the competitors. One day people are going to wake up and realise that they don't own anything, or that everything they thought they owned is suddenly taken away from them. DRM exists solely to prevent competition from others and is not in the best interests of the consumer. Without competition, such restrictions would not be needed, or even if they were, done in a way that actually benefited the consumer through industry-wide interoperability. A DRM'd song would not be a problem to a consumer if it could be played on every single possible device produced with the only restriction that they were not allowed to give the song in full to another person, as that is clearly illegal.

Competition exists for one purpose only, to increase the bank balances of share holders. It has nothing to do with consumers. Modern business is based on contempt for customers - name me an example where that isn't the case?

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