Intellectual Monopoly

Netflix is doomed. They'll be swallowed whole by their fierce competitors; HBO, Hulu, Amazon Prime Video, CBS All Access, Disney +, Sandvine, YouTube TV, DirecTV Now, PlayStation Vue, and many more are eager to take over their crown. Long gone are the days that Netflix enjoyed a monopoly on streaming services. Or are they..?

If there is competition, the idea is that competitors will drive each other to improve their products, as to not lose their customers to the competition. So they will continuously work on the user interface, add new functionality regularly, improve their network's bandwidth and so on. Since these services are driven by computer algorithms, and everything on the internet is connected, we would expect great features; how about a link to YouTube in the background that warned faithful watchers of, let's say Game Of Thrones to warn them about, or shield them from videos with spoilers for the episodes they haven't watched yet? Or what about information-pop-ups when the screen is paused; facial recognition software could link to information about the actors in the image, or more information about words in the subtitles.

So, where are all these magnificent improvements? Why do Netflix and all the others not behave like companies that have to fight for their own share of the market? Well, it's something we call "intellectual property rights." This is yet another capitalist tradition that I've never understood; how can you own an idea? And how can owning an idea ever be thought of as a good thing where it comes to speeding up progression? That's the idea behind these ridiculous property rights; patents and other IP's are seen as primary drivers of innovation.

Patent rules, for example, reflect the long-held assumption that strong protection provides an essential incentive for businesses to pursue innovation.
_{source: Brookings}

A very simplistic idea if you ask me; if you can't use my idea or solution to a problem, you'll be forced to think of one yourself, and it has to be something different, something new. Putting the absurdity of literally owning an idea aside, it baffles me that people really think this could ever have worked as advertised. Let's stick with problem-solving for a sec; we generally don't solve our problems, especially bigger ones, all at once. Instead we usually grind through a slow process of solving small parts of the bigger problem, thus creating an often winding path to solving the bigger problem. If I solve one such sub-problem and refuse to share that, I deny others to pick up where I left off, and I deny humanity to start working on the next step toward solving other, bigger problems. I've created my own private mini-monopoly, arresting the path forward for as long as I can hold on to it, and that's exactly why we don't see competition between the streaming-service providers, and we'll probably never see those great features.

What they do is create an IP for their shows, they deny the competition to compete where it counts; the quality of the service. If you want to watch a few different shows, or different sports, or different anything, you will most likely subscribe to several providers. In manufacturing, the patent rights have slowed us down almost certainly, and it doesn't take a rocket scientist to figure out that if Samsung and Apple would join forces, so to speak, by sharing their innovations (although... Apple hardly ever invents anything), mobile phones would be better. There have been few studies to examine the effects of patent laws on innovation, but the ones I can find fail to show any improvement at all.

Moreover, they reveal that countries without patent laws, such as Switzerland and the Netherlands, were at least as innovative as countries with patent laws.
_{source: Patents and Innovation in Economic History - by Petra Moser, February 2016}

These studies are superfluous if you ask me: there's no way how shielding an idea from all other brains on the planet can speed up innovation or yield better quality products. Streaming services are but a small part of this story, but please watch this video; it's what inspired me to look up these articles again and write today's post, and it uses Netflix as the perfect example of how "intellectual property" should be called "intellectual monopoly."

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