Valuetainment - January 16, 2019


Episode 248： What is a Monopoly and How Does it Work？

Topics
monopoly innovation competition
Hosted by
Patrick Bet-David
Mentioned
Monopoly Groupon Uncle Pennybags Coffee Bean Snapchat
Episode 247： Self-Made Millionaires： Three Qualities They Have in Common Episode 249： How To Master A Skill

Episode Stats


Length

5 minutes

Words per minute

190.61

Word count

1,069

Sentence count

82


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode, Patrick and I talk about what a monopoly is and why it's bad. Monopolies tend to happen when there's only one firm that sells the product, a high barrier of entry, and there's no close substitute.

Transcript

Transcript generated with Whisper (turbo).
Topics generated with Qwen2.5-3B-Instruct.
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.380 30 seconds. One time for the underdog. Ignition sequence start.
00:00:06.960 Let me see you put them up. Reach the sky, turn the stars up above.
00:00:11.100 Cause it's one time for the underdog. One time for the underdog.
00:00:17.400 I'm Patrick Bedevi, host of Alletainment, and today we're going to talk about an old school game
00:00:21.240 that we all used to play with our friends and family, and that is Monopoly.
00:00:24.400 But the question is, what is a Monopoly, and how does it work?
00:00:27.480 I'm not talking about our buddy named Uncle Pennybags, who we play the game, and we roll the dice,
00:00:34.760 and you hope to land on boardwalk, and pass go, and collect $200, and not go to jail.
00:00:40.940 We're not talking about that game today. We're talking about real-life Monopoly.
00:00:45.360 Three things cause a Monopoly to happen.
00:00:48.480 One, only one firm sells the product. There's only one firm that sells the product.
00:00:53.080 Two, two, there is a very difficult barrier of entry, meaning the government's created so many
00:01:00.300 regulations and licensing for you to get in that it makes it tougher for a smaller business to go in
00:01:05.820 and compete with the bigger business. If there's too many regulations, too many laws, very difficult
00:01:10.360 for the smaller business to compete with the bigger business.
00:01:13.280 Three is there's no close substitute. So a close substitute could be, I have a choice between buying
00:01:20.120 a car, but there's motorcycles. If a car sold for $100,000, then there's a motorcycle, then there's
00:01:25.920 a bicycle, I have a close substitute. So when you think about those three things, I'll give you a few
00:01:30.400 examples business-wise. When Apple first came out with an iPhone, you remember when the iPhone first
00:01:34.940 came out, it was a big hit. It's called a smartphone. It's incredible. It does your thinking for you.
00:01:40.300 One of the best things that happened for you and I is Droid came out, right? And one of the best
00:01:46.300 things that's recently happened for everybody, including iPhone users and the consumer, is
00:01:51.540 Samsung came out with a new phone called Galaxy S5. That phone is going to influence Apple to get a
00:01:58.260 bigger screen and get better. If they don't, they're going to lose a lot of customers to Samsung, and
00:02:02.400 they need to be a little bit more affordable for the average middle-income family to be able to buy
00:02:06.880 that. If they don't, they're going to lose customers. You think about Netflix, product grew. It did
00:02:13.140 very well. Stock's doing incredibly well. Amazon decides they want to compete with Netflix. You
00:02:18.020 know what that's going to do? If you own Netflix, be excited about this because the product's going
00:02:22.800 to get better. They're going to have to deliver a better product for you because there's a
00:02:26.300 competition now. There's somebody that wants to take that marketplace. If Netflix is at whatever
00:02:31.720 percentage, Amazon's just going to lower it, and Netflix need to think about creative ways
00:02:36.280 to prevent that from happening. Some people may say, well, Groupon was a monopoly when it first came
00:02:41.100 out. Yes, but it doesn't last long because within one year, a couple thousand group buying websites
00:02:47.020 came out. They gave them so much competition that made Groupon change their regulations with their
00:02:52.500 relationship with businesses where they had to go from 50-50 profits to 60-40 to 70-30 to 80-20
00:02:58.500 because there were other people that were doing the same, and that continues on happening and
00:03:02.380 happening and happening because the number one thing that prevents a monopoly from happening
00:03:08.660 is choice. When there are choices, everybody has the pressure to improve. If I don't want to go to
00:03:16.140 Starbucks, I have Coffee Bean. If I don't want to go to Burger King, I have McDonald's. If I don't
00:03:21.340 want to go to Subway, I have Quiznos. The list goes on because choices prevents monopolies from taking
00:03:28.760 place. So when you think about the pendulum, if we have a pendulum here, on one side, there's only one
00:03:33.600 company. It's a pure monopoly. On the other side, we have pure competition, many, many firms. What do
00:03:38.720 you think is the best opportunity for you and I? With a lot of firms. So that's why we call it free
00:03:43.840 trade when there's, you know, allowing Japan to come and compete against Ford and Chevrolet when Toyota
00:03:50.020 comes here, Honda comes here. It's allowing international companies to compete domestically.
00:03:56.020 That not only creates the products to get cheaper and cheaper and cheaper for you and I, but it also
00:04:01.860 makes the competitors produce better products. Innovation gets better because they're seeing their
00:04:07.520 competitors, what they're doing. This has happened firsthand to me with competitors that I have
00:04:11.860 that we deal with because every one of us is forced to improve collectively representing that one
00:04:17.220 industry together. But above all, if there's one organization that can both prevent and influence a
00:04:23.700 monopoly from taking place as the U.S. government, here's why. A U.S. government can get involved
00:04:28.940 and say, no, this is a monopoly. This is not going to be taking place. And on the opposite side,
00:04:33.180 U.S. government can also create a lot of regulations by the way you and I vote because it may seem like
00:04:38.100 we're doing the right thing. Let's over-regulate this industry and this business because I don't like
00:04:43.520 Apple. I don't like Walmart. I don't like this. Let's create more regulations. You know what the
00:04:47.720 bigger businesses say? No problem. You're helping us out. Do you know why? The more the regulation,
00:04:52.860 the less the smaller business can compete with the top guy, which means what for you and I?
00:04:59.100 Prices don't go lower. And what you and I vote for as the consumer is to make things better,
00:05:05.540 efficient, and more cost-effective. The more the regulations, the less that's going to happen for us.
00:05:12.100 Thanks, everybody, for listening. And by the way, if you haven't already subscribed to
00:05:15.100 Valuetainment on iTunes, please do so. Give us a five-star. Write a review if you haven't already.
00:05:20.720 And if you have any questions for me that you may have, you can always find me on Snapchat,
00:05:24.940 Instagram, Facebook, or YouTube. Just search my name, PatrickVidDavid. And I actually do respond
00:05:30.440 back when you snap me or send me a message on Instagram. With that being said, have a great
00:05:35.020 day today. Take care, everybody. Bye-bye.