We're All Normal And We Want Our Freeview
by Quinn
My first venture into digital television was with the ill-fated on/ITV digital a few years ago. When they went bump (while trying to drag a few lower league football clubs with them) I wasn’t all that bothered; most of the channels we lost were rubbish (my wife missed E4, I quite liked Paramount for “Seinfeld“), but we kept the set top box, and still got the BBC digital channels, which were the ones we probably watched the most, and ITV2 was still there for the occasional Inspector Morse re-run. Then, when Freeview started, these channels were joined by some half decent offerings; UKTV History has its moments, the two music channels are okay for a change, Sky Sports News is occasionally worth watching. Basically, it does us fine.
Except the old ITV digital box started playing up; it was getting to the point where I had to pull the plug out of the wall at least once a day when the whole thing froze. Solution? The fantastic new DigiFusion FVRT100, with built in hard drive recorder. Basically, rather than having a separate set top box and video, you have a combined unit which records your TV programmes to a hard disk, so preventing the need to go searching for blank video tapes. It has two tuners incorporated into it, so you can watch one channel and record another; in fact, you can record two channels at the same time, and watch a recording, should you so wish. It also automatically records up to 30 minutes of the channel you are watching onto a temporary file; so you can “pause” and “rewind” live TV. This has become a real boon; when the phone goes in the middle of a programme you are watching, or if your nose tells you your son’s nappy needs changing…now! It’s a little marvel.
You may say that this seems very similar to the Sky+ box, and you’d be right; they are basically the same thing. There are a few differences I have noticed though, in purchasing a Freeview hard drive recorder compared to Sky+
- My box records up to 40 hours, compared to Sky’s 20 hours. Already DigiFusion are talking about bringing out an 80 hour version.
- With Sky, you get the box you are given; with Freeview you have a selection of different boxes to choose from; DigiFusion, Pace, Thomson and Humax all manufacture them. Humax are currently working on a Freeview TV with integrated Hard disk.
- You have to wait for Sky+ to be delivered and installed, at a cost; I bought my box from Currys, plugged it in, and I was away (although I dare say there are technical reasons why you can’t install Sky+ yourself)
- Sky charges a monthly fee for Sky+; unless you are already on one of their more expensive monthly packages. With my box there is nothing else to pay.
- The DigiFusion box is £40 cheaper. I think the Thomson box was cheaper still.
I know that this is a far from scientific comparison of the two systems, and I may have missed some benefits Sky+ has over a Freeview box; obviously you get far more channels to watch with Sky, and you can’t watch Premiership football on Freeview; but isn’t that what the pub is for? Also, I am not saying that Sky+ is rubbish, because it’s not; in fact it is because it is so good that I wanted the same thing for Freeview. What I find interesting in comparing the two systems though, in this regard at least, is how Sky seems to be acting in a way similar to BT, pre-privatisation, where it was a case of “Do you want a new phone? Well, we’ll tell you when you get it, and what it looks like, and when you will be connected.” Yet Sky is part of a massive private company; why would they act in a way I find reminiscent of a public monopoly?
Firstly, of course, in the market for a Sky hard drive recorder, they are a monopoly. Sky alone provides satellite digital television to the UK, and only they provide a hard drive recorder with an integrated satellite tuner. They do face some sort of competition, from Freeview, and cable, but if you want the range of channels that only satellite technology provides, and you want to record one digital channel whilst watching another, then Sky+ is it.
Secondly, I have a feeling that in many ways, large private companies actually have more in common with the public sector than they do with small private companies, at least in their day to day running. I hasten to add that this is just my little pet theory, likely to be contradicted at a stroke by a well placed statistic or two, but it is a theory based on my own observations having worked in the public and private sector, in large and small companies. Of course, private companies have a profit motive that is absent from the public sector, and this will affect their decision-making; but public firms do have their own financial considerations. Meanwhile, within large private companies, you can find vast swathes where the profit motive seems an irrelevant and alien concept; the senior managers who are interested in profits are often insulated and ignorant about how many areas of their business operate. Examples available on request.
People often talk about comparing the public and private sector as if it was a simple divide; Ruth Lea of the Centre for Policy Studies is typical when speaking to the Telegraph of comparing “the dynamic private sector to the wasteful public sector”, but I think this is a simplistic comparison, even if there is some truth in it. Similarly, Tim Worstall replied to my comment on his blog by saying that what he dislikes about the State is “the meetings, conferences, planning sessions and bureaucrats”, and he is right to dislike them; but they are far from the sole preserve of the public sector.
I would say that it is competition that makes the difference, rather than simply whether a firm is in the private or public sector; so, where Sky do not face any meaningful competition, their service suffers by comparison with a similar market where competition does exist.
I think that this illustrates part of my concern when people preach the virtues of the unrestrained free market. It works brilliantly well in many ways, at least where the actions taken to maximise profits coincide with actions that benefit the consumer, as they very often do. However, some people talk about the benefits of the free market and the benefits of perfect competition as if they were the same thing, when in most cases the free market throws up oligopolies and monopolistic competition. If we do just leave things to the free market, what is to prevent a gradual slide towards monopolies across all markets, and where will we stand then? Will we be much, if any better off than under a public sector monopoly; and if not, how can such a drift be prevented, other than by state action of the sort the OFT engage in, and which is so criticised by some proponents of the free market.
What is the answer? You didn’t really come here for an answer did you; I am certainly the wrong person to ask. I am just throwing ideas and thoughts about to see if they make any sense. Do they? I may have a degree in Economics, and so have forgotten more than most people know about the subject, but that is probably the problem; I have forgotten it, and I just carry about a little knowledge at a dangerously low level. I think all I really learnt at college was a cynicism and scepticism towards all economic theories.
I will tell you what I am not saying, however; I am not attacking the free market, and I am not arguing for a large state. Sometimes it is assumed that if you question the free market, or defend the state in any way, then you want politicians to organise everything for us, and for the state to tell us what we are having for tea. I don’t. I want the state to be as small as possible, and for taxes to be as low as possible, albeit I would like them to be more progressive than they are now. And it would be lovely to think that leaving everything to the market would solve all our problems, that some invisible hand will always be there to mop our brow and steer us back onto the right course when things get tough; but it seems a somewhat naïve view to me. I suppose I just think that market failure occures a bit more often than some people believe, and that the state may have to nip in now and then to help out more regularly than some would like.
Or perhaps I have just rambled on, at perhaps too much length, over reacting to what is just a rather fine piece of consumer electronics.
The Obscurer 
Fair points about monopolies and oligopolies. I’m agin’ ’em too. It’s one of the few areas in a market system where government does, to my mind, have a legitimate function.
Thanks for your comment, Tim.Don’t tell me we’ve found a small patch of common ground!
“What is the answer?”Hopefully by adding my own thoughts to your interesting post we can all take a step toward finding out what the answer is!You claim that public/private is not a simple divide. I completely agree.It stems from “excludability” and “rivalrous”, and in the case of a streetlight vs a sandwich it’s easy to see how one is public, and one private.But once we move toward organisational structure, serious muddles ensue. A “private” economy would be one with high trade barriers, no migration, self-sufficient farming and energy independence. A “private” household would be The Good Life, or The Darling Buds of May. On the other hand, if we trade for nearly everything, that seems to be far more public. After all McDonalds will engage with anyone with means to pay, whereas local councils are not available or accountable to those who don’t live in a specific area.Back to your own points, and you claim that a large private company resembles a public monopoly, and use Sky as evidence. Sky is indeed a monopoly provider of live Premiership football, on account of the large sums invested in securing the rights. You suggest they’re more efficient than the public sector because of competition, but i’d make a clarification to that: it’s the threat of competition. Freeview might offer some a better service. BBC might bid for England matches… But the main reason for a private monopoly being more efficient than a public-supported one is the threat of opt-out. Any Sky customer can end their subscription, and they know it. So it’s not competition per se that is what’s needed, just the threat of competition.What needs to happen is a movement away from the typical understanding of “perfect competition” “oligopoly” “monopolistic competition” and “monopoly”. these are hypothetical constructs used by statists to justify government action. The fear that there’s a gradual slide toward monoploy is legitimate, but unfounded. It was what Marx based his ecomomic historicism upon, but in actual fact market concentration fell during his period. If big firms dominate a free market, that’s good: they can provide more valuable goods at a lower price than anyone else. If they took liberties with that power, they’d lose it. Unless they have some form of government protection. For example it’s a myth to think that regulation is merely protection of consumer interests. It raises the cost of doing business, and powerful firms love it! It restricts competition! If I were a large pharmaceutical company, with lots of lawyers, I’d love a new law that made it harder to sell a drug. what happens when a local district tries to combat all these McDonald’s by making it harder to get a restaurant license? There’s an advantage for bigger chains to expand, and it’s harder for new firms to enter. So the Starbucks/McDonalds/Tesco etc “engulfment” is a sign of an unfree market.Also, your own “little pet theory” goes a long way to ensuring that monopolies won’t take over the world. Indeed big private firms have a lot of bureauracracy, and this will make them more inefficient. Joseph Schumpeter made this point, as a rebuttal to Marx. That’s all for now, sorry for the lack of cohesion.AJE
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Macceroni – thanks for your comments, and I certainly will visit your blog.
AJE – thanks once again for your interesting and informative comments. Much to mull over as usual. Thanks again.“Lack of cohesion”? No less cohesive than my original post, surely!Thanks are also due to you for taking my Sky example, which I felt was probably flawed, and running with it; giving it some legs that it didn’t really deserve. Cheers.Your comments regarding monopoly were very interesting. I am not quite sure that you have proved to me that the fear of monopoly is unfounded, but you have certainly made me consider that a drift towards monopoly is not inevitable. The idea that Government action designed to help the consumer actually restricts competition is certainly something I hadn’t considered, but it certainly makes sense. When you mention that large firms’ inefficiencies prevent monopolies from taking over the world, I hope you are right. There is certainly evidence of large conglomerates selling loss making brands and divisions, only to find venture capitalists turning the same failing brands around within a couple of years and selling them for a healthy profit. But in the long, long run, is there not a concern that large firms, no matter how inefficient, may still have just too many advantages over smaller or new entrants into their market to allow meaningful competition (newcomer start-up, economies of scale, and other terms I am dredging my memory for!). You do say, though, that Schumpter’s point “goes a long way” towards rebutting Marx’s position on monopoly, so I realise there is more to say on the matter.Once again after reading one of your posts or comments, I am thinking I really should read more economics books to keep my hand in on the subject. I do buy a few, it is just the reading that I find hard to get around to; but if I am going to claim that I am sceptical of economic theories, it is a good idea to have a better knowledge of what I am being sceptical about. In particular I could do with reading some Hayek, someone whose ideas have always interested me, even if I may have my doubts. Where do you suggest I start; “the Road to Serfdom”?
Road to Serfdom is great in that Hayek was writing it for politicians/non-economists in a geniune attempt to debate. I’d definately recommend it as a starting point, and will point out the cartoon version here:http://www.mises.org/TRTS.htmAlso keep an eye on the literature section of The Orange Path – i’m trying to find entertaining works that bridge the gap between good means (the “right”) and good ends (the “left”). http://thefilter.blogs.com/orange/2004/12/literature.htmlThere is a geniune concern that as firms get bigger they will have enough market power to essentially limit competition. For example a large Tescos that owns so much surrounding land a potential competitor can’t acquire land. Or DisneyWorld is a good example of a large firm that restricts competition.As you point out, there isn’t that much difference between Disney World and a city. See here http://thefilter.blogs.com/thefilter/2004/03/disney_world_co.html (although I’ve change my thinking since I wrote that).It certainly is interesting to consider the way an apartment block resembles a governance (litter collection etc are all included in the rent). The key issue is opt-out, again, and we can move to where we think the rent is a fair price for the particular mixture of “public services”, like gymnasium, swimming pool, proximity to metro etcA paper by Tiebout made the point that most political work centers on the national level, even though in the US more spending is done by seperate states. His conclusion is that citizens move to a state that closely fits their preferences, and states will offer tax/spend policies aimed at pleasing, aware that the population can move.It’s a great work, and is severely under-read. It dents the libertarians position, since opting out is a viable option. My issue, however, is that for many people theirs a prohibitive cost of migration. Whilst the rich can live in whichever island has the least tax, the poor are more fixed to their community. In theory, a citizen of Liverpool could simply move to Manchester, but in practice it’s more difficult. With free mobility, I wouldn’t have any problem with a “hands on” council, but the fact is people can’t just up and leave when council tax rises. (Also there’s a problem of centralised power, preventing some councils from trying to attract and better serve people).So I share your fears regarding monopolies, because they have the propensity to mimic the public sector. And this gets back to the public/private distinction. We’re moving away from that, toward various blends of the two. The state should facilitate this “sorting”, and allow some communities to develop that are very low tax/low spend, and some (perhaps Bath) with a high council tax but a high quality of public buildings and ambience. I’m not sure that’s got us any closer to the answer, and considerably further away from the question, but i appreciate the attention!
“The Road to Serfdom” it is then; I have some Borders vouchers that need spending anyway. I like the cartoon version, just a shame it is so brief. I read a cartoon version of Hamlet a few years ago which was so detailed I have never bothered to read the play itself; although I dare say the cartoon missed out many nuances from the Shakespeare original.I would be interested to know if there are many, if any, people who have moved to a different area within the UK directly because of the tax and spend policies of a local council; more importantly, does the fear of opt out affect council’s decision making? I doubt it. I remember reading Miranda Sawyer’s book “Park and Ride”; she mentions that her parents told her, when they moved to Wilmslow, that they couldn’t afford Manchester’s rates, as if this was a factor in determining where they lived. I find that hard to believe; anyone who chooses to live in somewhere as swish as Wilmslow – it is a bit like Formby, but without the red squirrels – is unlikely to find anywhere in Manchester where they would happily settle. I suppose state policy does impact upon migration, though, only less directly. As you say, only the rich are likely to be able to move somewhere purely because they prefer the tax / spend policies of a particular place; but these policies do affect where firms locate and relocate, and where their employees must live as a result. Not so much people opting out, as being coerced in, perhaps.Finally, I note the uses of the quotation marks when you talk of “the gap between good means (the “right”) and good ends (the “left”).” I wonder if, like me, you feel these terms are rapidly losing their meaning; that’s if they ever had much meaning at all. Sure, they serve as useful shorthand sometimes and people usually know what you mean when you say “right wing” or “left wing”, and I am not saying I never use the words myself. But take for example the Tory party on ID cards. Here they seem split between those of a libertarian view, who oppose their introduction, and those of a more authoritarian, reactionary opinion who support the Government. In theory, you could say the libertarians are more right wing, in that they oppose a greater role for the state; yet they will be voting with the Liberal Democrats on the issue. In general I dislike referring to people as being of “the left” or of “the right” as if they where two distinct homogenous groups; they are labels which don’t really help us to understand what others actually believe in.
This is an old post I know but….I’ve not moved within the UK because of tax but I have moved out of it for that reason. No, not some grand millionaire style tax exile, just an average incom.
I would be interested in how much the UK tax rate played in your decision to move. Was it the overiding factor, or just one of the many reasons which led you to leave these shores (being offered a job oppurtunity, feeling there are better prospects abroad, hating British weather etc.) As has been said, it is of course possible, but how pratical is it for many people to move?And does this mean you agree with Tiebout’s paper, which AJE feels “dents the libertarians position, since opting out is a viable option”.