[UFO Chicago] TRON Special Edition 20th Anniversary DVD

[Larry Garfield]

My turn to ramble....

"Peter A. Peterson II" wrote:

> But seriously, if DVDs were $5 and movie tickets were $3, would the
> entertainment industry be able to do the things that it can do with
> the revenue it has? In some ways, that question is saying, "Would the
> entertainment industry be able to churn out as much festering bilge as
> they are now?" BUt it's also saying, "Would they be able to invest in
> such projects as X and Y that we all enjoyed so much?"
> 
> And what is the appropriate plan? Should we pay $15 for a movie ticket
> (until the studio has recouped, at which point admission is fixed as
> per the cost of rental at that movie theatre) and a haypenny
> for a movie rental (still brutal extortion) and $5 for a DVD? And a
> nickel per bag of popcorn and coffee at diners should be practically
> free? If DVDs only cost $5, everyone would have every DVD they ever
> wanted, which would mean that we'd all have massive video libraries,
> and so in a way the somewhat prohibitave cost creates a balance.

This is a very common response to the "prices are too high" argument for
anything.  "If they were too high, people wouldn't buy them.  The Market
has created equilibrium where it belongs, because that's what The Market
does."  The problem is, it's a non-falisifiable statement.

Q: How do you know the price is at its socially optimal level?
A: Because it is at equilibrium.
Q: How do you know it's at equilibrium?
A: Because The Market always puts prices at equilibrium.
Q: How do you know The Market always puts prices at equilibrium?
A: Because it does.
Q: How do you know that the equilibrium price is socially optimal?
A: Because it must be.
Q: Here's a price, is it socially optimal?
A: It must be, The Market put it there.
Q: How do you know that?
A: Because that's what The Market does.

(Oversimplifying a bit, but it is 2 am... <g>)

A corollary is the famous statement "As high as the market will bear." 
Which is of course based on the concept that if everyone is equally
greedy and equally selfish, everything averages out in the end.  (The
fundamental precept of capitalism.)  I hope I don't need to explain why
that theory is hogwash, I presume we're all insightful enough to see why
that fails.  (Hint: It's the same reason that Marxism is nonsense.)

> I'm rambling. But my point is, the actual cost to produce is not the
> only consideration in fixing a price for a product, all other points
> beside.
> 
> You CAN argue on the freedom grounds though, and I have no recourse
> but to say "I'm not that much of a zealot," at which point you can
> say, "but you should be." And then I'll shrug and wonder about it.

I'm arguing on extortion grounds, although freedom works too.  Supply
and Demand does not apply to non-scarse resources.  Once information is
created, its supply is infinite, by nature.  (A more rational version of
"Information Wants to be Anthropomorphized".)  Once the costs of
producing the information have been recouped plus a reasonable profit,
and after a limited time, the information should pass to the public
domain.  (See also: Quake II engine released as GPL.  Yay!)  The costs
of producing the information in question, TRON, have long since been
recouped, and all those involved in its production have received a tidy
profit, and a decent amount of time has passed.  By rights it should
therefore fall to public domain, that is, the monopoly on it should
cease.  If there is no monopoly, then perhaps the so-called laws of
Supply and Demand may take effect and set an equilibrium price.  

However, that is not the case.  The information is still under
copyright, meaning that it is held in monopoly.  A monopoly by nature
sets the price on a product at what is best for the producer, not what
is socially optimal.  In fact monopolies are inherently sub-optimal. 
The price on this DVD is not, therefore, socially optimal, equilibrium,
or any other ideal price.  It is a monopoly price.  A monopoly granted
for a limited time in order to encourage the creation of new
information.  The encouragement has long since passed, the monopoly now
serves no purpose but to allow for further abuse of monopoly power. 
That is why I say $20 for a 20 year old DVD is extortionally high.

Now, the obvious reply is "OK, so what is a 'reasonable profit'?"  On
this I am forced to reference the Supreme Court's stance on
pornography.  "I know it when I see it."  I cannot necessarily draw a
line in the sand, because that is to over simply the issue.  However,
when all those who contributed anything to the production of the
information have received due compensation, and the agency created for
the purpose of bringing those contributors together has received due
compensation, and all have moved on to other endeavors, and two decades
have passed (people my age who saw TRON in the theater could very easily
now be grandparents, consider that for a moment), I do consider that to
be reasonable profit and reasonable limited time.  

Even if we did permit for the validity of Supply and Demand economics,
it still does not apply in this case, because of the monopoly.  Were
there no monopoly (anyone could produce a TRON DVD without royalties),
then the S&D system would set an equilibrium price, which would, I
suspect, be far less than $20 a pop.  

That is not to say that I object to paying for new content.  I just saw
Lord Of The Rings today, and paid for the privilege.  (The only spoiler
I will give for those who haven't seen it: GO SEE IT!!!)  However, I do
have a problem with paying monopoly prices for old content that should
no longer be held in monopoly.

-- 
Larry Garfield
lgarfiel@students.depaul.edu

Do you have a PalmOS Organizer?  Click here to add me to your address
book:
http://signature.coola.com/?lgarfiel@students.depaul.edu

-- "If at first you don't succeed, skydiving isn't for you." :-)