How do you distinguish price-dropping to force the competition out of business (boo!) and price-dropping to be able to compete with the newcomer (yay!)? After all, cannot any competitive situation be interpreted as everyone trying to force everyone else out of business?
I remember that some years back, the price of several top-end commercial 3D modelling and animation tools suddenly collapsed. Houdini (edit: or maybe Maya) was around $6000 per year per user, and dropped to about $1200. Some trade fairs showcasing those high-end tools also stopped happening because the companies couldn’t support the expense. The reason was that free tools like Blender, and cheap ones selling for a couple of hundred dollars, had over the years improved so far that a lot of professionals were deciding that they could no longer justify the cost of the expensive tools.
It was probably a good thing all round. The producers of the high-end tools have had to work harder to keep ahead of the low-end tools, and the producers of the low-end tools have reason to add more and more high-end functionality. And users at all levels have had better and better tools to work with.
I do not believe that any sort of regulatory interference with this would have benefitted anyone.
The problem is not the price decrease, the price decrease usually doesn’t play out. Relatedly, self-determined price commitments aren’t intended to prevent the price decrease that render competition non-viable, they would force it to happen.
The problem is the optionality of the price decrease. Situations where the incumbent can afford to reduce prices in order to disincent the creation of cheaper alternatives, the threat works, and so no cheaper alternatives arise, and so they don’t.
So the proposal is to take away just the optionality of it. They can do whatever they want, but they must commit to it now, and being the market leaders, I think they often will have enough foresight that they can totally afford to do that. If they don’t, maybe we’d all be better off if they weren’t the market leaders!
I don’t really see the story of Blender as a positive one. Afaik they only started receiving really adequate funding and industry adoption very recently, for the longest time being a fan of blender was kind of depressing, the industry mostly failed (and is probably still failing) to adequately reward its hero. self-determined price commitments would have resulted either in the emergence of a cheaper commercial competitor to maya or faster price decreases from them.
In the former case, Maya might have failed to anticipate competition and been driven bankrupt when it emerged. Whether that’s terrible or not might depend mainly on how gracefully we can manage bankruptcy.. for physical assets they simply move into the hands of new owners, for digital assets I guess it must be more destructive, I imagine the fallout would hurt a lot of their customers?
I don’t really see the story of Blender as a positive one. Afaik they only started receiving really adequate funding and industry adoption very recently, for the longest time being a fan of blender was kind of depressing, the industry mostly failed (and is probably still failing) to adequately reward its hero.
That looks like the same story I told, with a different framing. Free/cheap was snapping at the heels of the expensive software, and things evolved in a way that has benefitted everyone, all as a result of the users and companies taking their own decisions as they saw fit in pursuing their own interests. There is a wide spectrum of tools from free to expensive, and they all get better from year to year.
self-determined price commitments would have resulted either in the emergence of a cheaper commercial competitor to maya or faster price decreases from them.
All the proposal does is reduce the ability of companies to respond to the conditions around them. It is indifferent to whether the responses they prohibit are ones you approve of or ones you do not.
How do you distinguish price-dropping to force the competition out of business (boo!) and price-dropping to be able to compete with the newcomer (yay!)? After all, cannot any competitive situation be interpreted as everyone trying to force everyone else out of business?
I remember that some years back, the price of several top-end commercial 3D modelling and animation tools suddenly collapsed. Houdini (edit: or maybe Maya) was around $6000 per year per user, and dropped to about $1200. Some trade fairs showcasing those high-end tools also stopped happening because the companies couldn’t support the expense. The reason was that free tools like Blender, and cheap ones selling for a couple of hundred dollars, had over the years improved so far that a lot of professionals were deciding that they could no longer justify the cost of the expensive tools.
It was probably a good thing all round. The producers of the high-end tools have had to work harder to keep ahead of the low-end tools, and the producers of the low-end tools have reason to add more and more high-end functionality. And users at all levels have had better and better tools to work with.
I do not believe that any sort of regulatory interference with this would have benefitted anyone.
The problem is not the price decrease, the price decrease usually doesn’t play out. Relatedly, self-determined price commitments aren’t intended to prevent the price decrease that render competition non-viable, they would force it to happen.
The problem is the optionality of the price decrease. Situations where the incumbent can afford to reduce prices in order to disincent the creation of cheaper alternatives, the threat works, and so no cheaper alternatives arise, and so they don’t.
So the proposal is to take away just the optionality of it. They can do whatever they want, but they must commit to it now, and being the market leaders, I think they often will have enough foresight that they can totally afford to do that. If they don’t, maybe we’d all be better off if they weren’t the market leaders!
I don’t really see the story of Blender as a positive one. Afaik they only started receiving really adequate funding and industry adoption very recently, for the longest time being a fan of blender was kind of depressing, the industry mostly failed (and is probably still failing) to adequately reward its hero. self-determined price commitments would have resulted either in the emergence of a cheaper commercial competitor to maya or faster price decreases from them.
In the former case, Maya might have failed to anticipate competition and been driven bankrupt when it emerged. Whether that’s terrible or not might depend mainly on how gracefully we can manage bankruptcy.. for physical assets they simply move into the hands of new owners, for digital assets I guess it must be more destructive, I imagine the fallout would hurt a lot of their customers?
That looks like the same story I told, with a different framing. Free/cheap was snapping at the heels of the expensive software, and things evolved in a way that has benefitted everyone, all as a result of the users and companies taking their own decisions as they saw fit in pursuing their own interests. There is a wide spectrum of tools from free to expensive, and they all get better from year to year.
I don’t buy this, for all the reasons that Dagon has posted.
All the proposal does is reduce the ability of companies to respond to the conditions around them. It is indifferent to whether the responses they prohibit are ones you approve of or ones you do not.