Am I the only one tired of Infront / MXGP's corporate greed?

GetShorty wrote:

Thanks for the reply, and I appreciate the discussion. However, I respectfully disagree with your notion which seems to be that the free market will always...

Thanks for the reply, and I appreciate the discussion. However, I respectfully disagree with your notion which seems to be that the free market will always dictate fair prices, and here’s why.

1. Markets aren't always in perfect equilibrium

The assumption that free markets always find a “fair” price rests on the idea of perfect equilibrium. In reality, markets are often imperfect, with several external factors distorting price mechanisms:

• Monopolistic or oligopolistic control: Many industries, including streaming services, are controlled by a small number of major players, reducing competition. This allows companies to set prices without fear of losing significant market share, even in the face of rising prices. This is similar to what’s seen in the housing market—where land scarcity, zoning laws, and large corporate ownership have driven prices sky-high, despite demand being present.

• Price inelasticity: As you mentioned, companies, including streaming services, have found that consumers are more tolerant of price hikes than previously expected. This creates a scenario where prices rise faster than inflation or wage growth, not because of increased value, but because consumers don’t have viable alternatives. Studies during the pandemic showed that certain sectors, including digital services, faced inelastic demand, meaning consumers continued to pay higher prices despite economic pressures.

2. Wage growth and price increases aren't in sync

A big part of the frustration here is that prices for many essential goods and services—like housing, streaming, and healthcare—have outpaced wage growth. Let’s look at some stats:

• Wage growth: In the U.S., real wage growth has averaged about 5.1% annually in 2024.

• Housing prices: Housing prices have grown at an average rate of about 8.6% annually over the past decade. The disconnect here is a prime example of why just “letting the market decide” often leaves consumers worse off.

• Streaming price increases: As I pointed out earlier, the price for MXGP TV has increased by over 15% in a single year. This far outpaces both inflation (around 3% in 2024) and wage growth. When prices increase at a faster rate than wages, consumers lose purchasing power, leading to the feeling of being priced out without real improvements in service quality.

3. Income disparity and market power

Another critical point is the growing income disparity, which highlights how market mechanisms often fail to result in equitable outcomes:

• Income disparity: The wealth gap has continued to widen, with the top 1% of households in the U.S. holding over 30% of the nation’s wealth. This is a global trend as well. If the market always found “fair prices,” why would we see such disparity? Instead, companies (like Inmoto in this case) may prioritize maximizing profits over maintaining reasonable price levels.

• Corporate profits: Corporate profits, especially in industries with less competition, have risen dramatically. For example, during the pandemic, many companies posted record profits despite stagnant wage growth and rising living costs for the average consumer. Streaming services, digital platforms, and media companies have leveraged these conditions, increasing prices while their cost structures remain relatively stable.

4. Housing market analogy

You mentioned affordability, and the housing market is a perfect parallel:

• In the '70s and '80s, housing was much more affordable relative to wages. Over the past few decades, however, housing prices have outpaced wage growth, leaving millions of families unable to afford homes that previous generations took for granted. Why?

• It’s not just supply and demand, but speculative investment, zoning laws, and a concentration of ownership that have driven up prices—factors that distort the idea of a “free market” solving everything.

• The same can be said for streaming services, where we are no longer just paying for the service itself but for the increasingly consolidated control over content distribution. This lack of meaningful competition allows companies like Inmoto to raise prices aggressively without corresponding increases in service value.

5. Final thought: A free market isn't always fair

Lastly, while free markets are theoretically self-correcting, they often lack the safeguards to ensure fair outcomes for all consumers. Pricing based solely on what the market can bear—without regulation or ethical considerations—can lead to situations where companies prioritize profit margins far above delivering value to customers. This is especially true when we see disproportionate price increases (as in the case of MXGP TV), with little to no corresponding improvement in product or service quality.

I believe that while companies have the right to set prices, customers also have the right to call out unjustifiable price hikes and demand more transparency, especially when there’s an imbalance in the value being delivered to consumers versus the profits being taken in by the companies.

Again, my two cents.

Last2Stroke wrote:

I agree, but I never said free market were fair!

cheesehead420 wrote:

When corporate interests and government are so intertwined it’s hardly a free market. I call it more like a planed economy. The western world is like...

When corporate interests and government are so intertwined it’s hardly a free market. I call it more like a planed economy. The western world is like a privately owned/corporate controlled planned economy operating through the mechanisms of the state. China for example is a planned economy where the state/goverment owns the corporations. Here the corporations own the government. It’s just flipped-flopped, though they’re both capitalism. One is state controlled the other is corporate controlled. Neither are free market and neither are good for innovation because of all the handicaps lobbied/payed for by the corporations and applied by the state to small business in order to stifle competition.