Quote:
Originally Posted by darryl
@pwalker8. If your argument is in fact correct, we wouldn't need anti-trust legislation since the market price can never be artificially inflated even in a monopoly or oligopoly situation. Different numbers of people are prepared to buy at different price points. Competition, even shadow competition, has the potential to drive prices down. In an already efficient market this shadow competition will damage legitimate players and may even tend to drive legitimate players out of the business and jeopardise the viability of the industry itself. However, the paper suggests that in an industry where competition is not working and pricing is well about the optimal price point, piracy may in fact be beneficial by forcing the price down towards the optimum price point where net revenue will be maximised.
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There is indeed an argument that anti-trust legislation is normally unnecessary. Most of the time, I tend to agree with that argument. With a few exceptions, most monopoly positions require support by the government. The original US anti-trust legislation, the Sherman anti-trust, was written by the Senator from Ohio in response to how the railroads were treating Ohio. The railroads at the time were a government supported monopoly.
There is an editorial in today's Wall Street Journal by Ted Olson about the current anti-trust case in court with Qualcomm. Of course, Qualcomm co-op the standards process to get the process that it held the patent on declared a communication standard, then reneged on it's promise to license that patent to all comers at a reasonable fee, so one could say that it is using both a government granted monopoly as well as a pseudo government agency granted standard. Perhaps a better solution would have been to require any patent that is incorporated in a standard to be renounced.
The optimum price point is a matter of opinion and exists at different price points for different markets. Copyright, is of course, a government granted monopoly, and as such meets some of the criteria for successful price fixing. Of course, if someone doesn't want to pay for Game of Thrones, then one can watch any number of other programs, which the vast majority of the potential audience seems to have done.
I seriously doubt that piracy kept the cost of GOT down. First, GOT was part of the HBO package, so for people who already subscribe get it without paying extra. The analysis is how much do they charge for GOT via the normal streaming, renting and purchase venues. GOT seems to be competitively priced in those venues, i.e. priced at price point fairly similar to what other such shows are priced at. Season 3 of GOT on iTunes is approximately $40 or $4 per episode. Big Bang Theory, a show that one can watch for free on TV, is $30 per season or $3 per episode. Star Trek Discovery is $35 per season. Does the threat of piracy also keep those shows priced fairly comparably? It seems that the assumption is that if not for the threat of piracy, they would price GOT at some price point far above what the market has settled on what TV shows should cost. I question that assumption.