Intellectual Property Rights: Piracy FTW :b: :b:

[Cort Haus]

Originally posted by asleepathewheel
Do you even know what goes into the production of music?

Based on discussions on a recent, similar thread, I doubt it.

[Kidlicious]

Originally posted by Darius871
What I mean is, often times you'll be charged what you're both willing and able to pay. That's how the market works (except when stiff competition drives prices down, but I don't see much of that in music).

You are rarely charged what you are willing and able to pay. Unless the seller knows that information. I've heard that car salesmen put microphones in the negotiating room and leave so that they can listen to peoples conversations.

It's usually less than that. And no, I don't know what you are talking about.

[Darius871]

Originally posted by Kidicious


You are rarely charged what you are willing and able to pay. ... And no, I don't know what you are talking about.

It's funny you claim to be an econ major, because from my (admittedly limited) understanding gleaned from law school discussions, all the econ geeks treated the dogmatic textbook definition of "value" as determined by 1) willingness and 2) ability to pay.

Maybe I'm just mixing up theoretical value with actual price, but it seems to me that a self-interested seller would have an incentive to place the price at the average buyer's "value" of the product (which of course would be merely the top of a bell curve given individual buyers' varying levels of willingness & ability to pay). Thus, if the average buyer is both willing & able to pay $15 (the value) for a CD that only bears $4 in production & distribution costs, the record company would be foolish to set the price at $4 or even $10.

[Kidlicious]

Originally posted by Darius871


It's funny you claim to be an econ major, because from my (admittedly limited) understanding gleaned from law school discussions, all the econ geeks treated the dogmatic textbook definition of "value" as determined by 1) willingness and 2) ability to pay.

Maybe I'm just mixing up theoretical value with actual price, but it seems to me that a self-interested seller would have an incentive to place the price at the average buyer's "value" of the product (which of course would be merely the top of a bell curve given individual buyers' varying levels of willingness & ability to pay). Thus, if the average buyer is both willing & able to pay $15 (the value) for a CD that only bears $4 in production & distribution costs, the record company would be foolish to set the price at $4 or even $10.

Willingness and ability to pay is value to the buyer. That doesn't mean that buyers should pay that much. If they did prices would be to high and the economy wouldn't work. Buyers get surplus value in a competitive market (that means that they get to purchase things cheaper). In that case the price equal to the cost of production (including normal profit).

Average buyer really has nothing to do with that. In the case of CDs the opimal price is that which maximizes revenue (price * quantity). However, you can also change (as in p1, p2 and p3) the price to get more revenue.

[Darius871]

Originally posted by Kidicious
Willingness and ability to pay is value to the buyer. That doesn't mean that buyers should pay that much. If they did prices would be to high and the economy wouldn't work. Buyers get surplus value in a competitive market (that means that they get to purchase things cheaper).

That's more or less the point I was getting at. It is the goal of the seller to get the price of a product as close to the value as possible, but unfortunately for him (or fortunately to the buyer) the pressures of competition drive the price well below the value.

In the music industry, however, that competition is taken out of the equation. Have you ever seen the same exact album sold by 3 or 4 different record companies at the same time? No. One record company signs one artist to do one album. Ergo, that company is at liberty to set the price wherever it determines the value to be. Sure there is competition between different retail outlets, which lowers the retail markup, but they all got the album for the same wholesale price set by one record company.

This is why a record company can and does charge $15 for something that cost a few bucks to make. Charging anything less would be moronic when there is no competition creating an incentive to do so.

[Kidlicious]

Ok, I get it now after looking back for a bit.

[Tim_Augustus]

Originally posted by Slade Wilson




Part of a free market is that you make something and sell it for what the buyer will pay. If you demand too much, they wont pay-in other words, you take prices from the customers. If you cannot make your gig work at the market price-get out. There is no moral law that says you deserve anything for your work. There are copyrights that exist to facilitate the producers of content-abuse it and lose money, use it wisely and profit. What value people place on their own labor is irrelevant. If this is not true, why do we allow companies to go out of business? Because they are bankrupt, inefficient and outdated? All the work those employees put into it, the 'trust' stockholders and investors had, didnt it have worth?

Users of Itunes for example, have indicated what price they find acceptable for music. Its not 20$ per album. Their alternative is free, so they show willingness to pay. Piracy wouldnt be anywhere near as bad if the music industry would set more reasonable prices.

My view is that piracy would be nowhere near as bad if RIAA members stopped antagonising their market and instead focussed on exploiting the new distribution methods available to them. This has begun with things like iTunes, but even with these stores they have generally striven to reduce consumer's choice by restricting the way the purchased media can be used - part of the problem is they've done nothing to encourage universal standards. For example, if you use the iTunes store, you're locked into using Apple software and Apple hardware. If you go for a store selling Windows Media files, you're locked out of using iPods. Why have these big media corporations, so united in their quest against small-time file-sharers, not got together and produced digital standards in the same vein as compact discs, LP's or DVD's? And then offer their codecs to any hardware manufacturer who can satisfy the requirements of security and compatibility? Instead of relying on Apple in particular who are only interested in their monopolisation of the portable media hardware market and not consumer choice?

[Darius871]

Originally posted by Kidicious
Ok, I get it now after looking back for a bit.

Come to think of it, that fact could be extrapolated to a strong argument for filesharing. It could be said that the unrestricted liberty of record companies to overcharge (due to lack of competition) constitutes a clear market failure, and it should be stopped for the same policy reasons that monopolies and trusts have been dismantled in other industries. Since the government is doing nothing to rectify this market failure, consumers are left with no choice but to circumvent its abuses.

[Kidlicious]

Yea. I think there's a good argument for the economic benefits of sharing too. It's pretty simply, but true.