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Comment by throwaway294566 | Hacker News Reader

Now unbundle delivery from movies/series/stuff and I'll be a member again.

It feels incredibly anticompetitive they were able to bundle Prime Video with Prime Delivery. Amazon have significant market power in online commerce, and for them to use that muscle into online video is ridiculous.

It’s almost exactly like when Rockefeller managed to use strategic rail infrastructure to attack and intimidate oil competitors until the entire industry became monopolized and had to be dismantled. ¯\_(ツ)_/¯

That's the conventional narrative. But if you read "Titan" by Chernow, it's substantially different.

Rockefeller never had a monopoly. He was accused and convicted not of having a monopoly, but anti-competitive behavior. Also, during the long trial, his market share kept slipping, and he was unable to stop the slide.

His competitors had never been vanquished, and had figured out how to compete with Standard Oil.

https://www.amazon.com/Titan-Life-John-Rockefeller-Sr/dp/140...

What's ironic about the book is Chernow reaches the standard conclusions that you wrote, but his actual text says the opposite. I suspect that Chernow's preconceived notions about Standard Oil were so strong he was not convinced by his own research and narrative of what actually happened.

That’s super interesting. I’m not familiar with the book - but the point about the monopoly doesn’t surprise me. Things are never that simple. From a legal standpoint no one actually reaches a full monopoly unless it is a government instituted/regulated monopoly, no? Like, I mean monopoly as a pursued ideal and total victory state for a business, but not as an achievable goal.

My point mostly related to Amazon - they’re really not a monopoly, but they’re definitely strategically pursuing a direction which left unrestrained would give them that monopoly. In this specific example it is Amazon using their AWS cloud infrastructure to bundle video streaming into Prime to then create a mix that strangles competitors. In the case of Standard Oil what I remember were strategic investments into directly unprofitable rail infrastructure and then SO using that to exert pressure on smaller oil competitors to force them to sell at a loss. I’m no expert but I think this is what makes anti-trust so difficult to prove reliably.

A few years ago Walmart was the unstoppable monopoly.

Was Walmart not pursuing anti-competitive strategies though? And does it still not do so in certain local markets?

The point the anti-trust people are repeating over and over is that anti-trust has been broken since the early 1980’s. So, this means huge chunks of the economy and many enormous conglomerates competing in it are themselves fortresses because lax anti-trust enforcement. In that worldview it doesn’t matter whether it’s Amazon or Walmart… or RadioShack or whatever. We literally can’t imagine another world because these conditions go as far as most of us can remember.

> The point the anti-trust people are repeating over and over is that anti-trust has been broken since the early 1980’s.

And yet an endless stream of unstoppable monopolies have collapsed or been humbled of their own accord since 1980.

IBM, Cisco Systems, Intel, Kodak, GE, GM, Microsoft, KMart, Lotus, etc.

That the de facto monopolies tend to collapse doesn't preclude the damage they incur on society/competitors whilst they're at their peak/stagnating.

The damage you refer to is simply free markets being a chaotic system. Creative destruction is part of it.

A steady state of communism is worse for people. History amply shows that.

But yeah, I noticed you moving the goal posts :-)

I don't see what the discussion has to do with communism unless you consider anything but the laissez-faire approach to be so. I felt that the main point of my comment was that we need to engage in "Creative destruction" earlier in the lifecycle of these de facto monopolies in order to encourage more innovation and healthier markets by cutting back on rent seeking and anti-competitive behaviour. Allowing Intel/IBM/Microsoft to coast by on rents for years while maintaining market dominance by strangling likely competitors via acquisitions seems like the worst possible approach.

> The damage you refer to is simply free markets being a chaotic system.

That damage has real effects on society. Markets are a tool we shape in order to benefit society. Take restrictions on anti-competitive behaviours, the 40 hour work week, or outlawing child labour as examples of how we've moulded that tool to improve society while keeping it useful.

Child labor is not covered by free market ideas because children are not consenting adults.

Consider this: free market capitalism enabled child labor laws. The reason is simple. Children had to work because non-free market societies did not produce enough surplus to make it possible for them to not work.

Free market capitalism also enabled 40 hour week laws.

Heck, it wasn't until around 1800 or so that free market agriculture produced enough food to eliminate the constant specter of famine that preceded it, and still haunts every non-free market agriculture system.

Was breaking up AT&T communism? The benefits for consumers in the following few years were massive.

I don’t think we need to suffer obvious business monopolies for years until a new paradigm shows up. Who benefits from that except the monopolists?

AT&T was a monopoly established by the government.

> That the de facto monopolies tend to collapse doesn't preclude the damage they incur on society/competitors whilst they're at their peak/stagnating.

That's what they earned by providing value. In a pure free market monopolies are hard to keep up for long.

Unless you can bribe politicians to create regulations and slow competitors, it will be hard to stop younger, fresher and better rivals.

The larger a company, the more inefficient it becomes and the more prone to be dethroned.

There's lots of different kinds of monopoly, they can be natural or created by government, but they don't require government intervention, more the lack of intervention can create an effective monopoly.

https://en.wikipedia.org/wiki/State_monopoly

https://en.wikipedia.org/wiki/Government-granted_monopoly

https://en.wikipedia.org/wiki/Coercive_monopoly

https://en.wikipedia.org/wiki/Natural_monopoly

https://en.wikipedia.org/wiki/Complementary_monopoly

I assumed Prime Video is just a loss leader to get you subscribing. Isn't the real benefit to them that they've convinced you to pay for next day delivery in advance, so you are discouraged from shopping around and end up spending way more at Amazon?

I mean, yes, prepaying for delivery encourages people to buy more things from Amazon. But that's not anticompetitive. What's IMO anticompetitive is the vertical bundling of these unrelated services, especially because they're so big in commerce.

You speculate that Prime Video is a loss leader, and that would make it an even bigger an anticompetitive threat to the rest of the streaming market.

I'm honestly surprised they kept going with this for so long. I expected them to do this for two or three years tops, but it seems to work out I guess?

I signed up for Amazon student after I finished college (still had access to a mail account and didn't know about the program before, or maybe it didn't exist yet) so I got prime for 25€ for a couple years. I watched one show on prime and never used it for music. Only really wanted the free and faster shipping. As soon as student ended I unsubscribed as it wasn't worth 45€ to me.

I think it's because if unbundled it would collectively cost a lot more, and nobody actually uses everything (or even more than one, maybe two) much anyway, so it's sort of a costless value-add to bundle them. 'Huh yeah maybe I'll use that occasionally.'

I'm sure they'll have run focus groups or whatever with proposed unbundled pricing to see which services people would pay for and how it stacks up.

There's huge value to them in being the only people who know how many people subscribe for the video and how many people subscribe for the shipping. In every vertical they can negotiate using the full Prime subscriber numbers, not the "number of people who have ever played a single Prime Video show".

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