Hermit wrote:Seth wrote:no cartel can survive being undercut by free-market competition
, provided the market is free. Which it isn't when it allows monopolies. Apple is a case in point. It made an agreement with five major publishing companies to sell copyrighted material only to Apple, who can then resell it at artificially inflated prices.
That's not a "monopoly" That doesn't begin to be a monopoly. Monopolies can ONLY exist when the GOVERNMENT legally sanctions them by making it UNLAWFUL to compete with the monopoly. This is seen in such public sector services as water, sewer, power and gas providers who may be giving monopoly protection by the government ostensibly to keep prices down. Paradoxically, it turns out that such monopolies actually cause costs to go up and accountability to the public to go down, which is why there are fewer and fewer electrical providers with monopoly protection.
What you describe is nothing more than a perfectly valid and long-standing practice of controlling access to the market in order to increase market share. It's not unfair or unreasonable because there is no free-market concept that guarantees consumers the lowest possible price. Price is determined by supply and demand in a free market.
Take the music industry as an example. The major record companies bind artists to their label with a contract that forbids them to independently market THEIR copyrighted works at a price the artist chooses. Publishers do the same thing to authors. So what's wrong with a distribution company like Apple's iTunes binding the publishers themselves to Apple and preventing them from selling to others at a discounted price? It's perfectly reasonable market-share protectionism.
If the price of that E-book is "inflated" too much, then consumers will stop buying them and the authors, publishers and distributor (Apple) will lose money, so they have to keep their costs low to keep the price low to attract customers.
All Apple was doing was competing fairly and squarely with Amazon.com. Amazon.com had been "undercutting" Apple for a long time with their deep-discount E-Books, but nobody complained about that did they? So Apple did the smart thing and offered SOME publishers a deal: sign an exclusive distribution contract with us and we'll give you 80% of the gross and we'll keep 20%. Then they set the prices where they thought the market could bear them, and they were absolutely correct. People liked paying $12 dollars for an E-book from Apple more than they liked paying $9 to Amazon for the same book. I'm not sure why this is so, perhaps it's because Apple is less intrusive and doesn't reach out to people's E-books to erase content that the customer already has purchased.
Or it may be that by sewing up SOME publishers with an exclusivity contract they cornered the market on digital content for E-books and Amazon took umbrage because they didn't think of it first.
In any event, there are OTHER publishers out there Amazon can go to, Or, Amazon can offer the publishers 85% of the gross and draw them away from Apple...after Apple's contract expires of course.
This is all merely good business savvy and strategic planning and implementation to dominate the market, which is the right of ALL businesses to attempt.
As I mentioned before, consumers have two options: To buy what they desire at inflated prices or not buy those products at all. They are not free to buy those goods from a competitor, such as Amazon, because there is no competitor who has access to those goods.
So what? What gives you the idea that consumers have a "right" to have what they want available from more than one source?
If you want a Ford, you have to buy it from Ford. If Ford decides to only sell it's vehicles on-line through Apple, then the only place you can get a Ford is through Apple. That's Ford's right. Ford gets to decide what is the best and most profitable way to market their vehicles, and they either succeed or fail based on consumer response.
It's no different with book publishers. If they think they can make more money selling through Apple, then it's their right to contract with Apple for exclusivity. Consumers do not have any right to expect that they can get content from anybody or for some artificially fixed price. Supply and demand. With an in-demand product, the producer can "inflate" the price as much as he likes in order to make a bigger profit, but if he ups it too much, consumers will stop buying.
This is why government intervention is a good thing. It's the government action that keeps capitalism a free market thing, from becoming monopoly capitalism.
JimC wrote:
Complete socialist nonsense.
"Seth is Grandmaster Zen Troll who trains his victims to troll themselves every time they think of him" Robert_S
"All that is required for the triumph of evil is that good men do nothing." Edmund Burke
"Those who support denying anyone the right to keep and bear arms for personal defense are fully complicit in every crime that might have been prevented had the victim been effectively armed." Seth
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There ought to be an equivalent to Godwin's Law, dealing with the likelihood of anything not agreeable to those of a hard-core libertarian persuasion being described as "Marxist".
