Sister Stirland asks about regulation of Cable TV.
Cooper argued that consumers ought to have more control over the content that they wish to receive (and thus more price flexibility.) Hazlett argued that it is inefficient to allow consumers to have more options when it comes to picking and choosing channels since the marginal cost of providing those programs to additional households is so low.
In the information age, bundling is a way of life, because--as Hazlett says--marginal costs are low.
--In my opinion, the music industry has to figure out how to do bundling. It's ridiculous to have people pay by-the-CD or by-the-song. People should be able to buy bundles. With the right bundle, the cost to the consumer of an additional download should be zero.
You would not want to regulate the music industry to force them to price by the CD. In fact, what the industry calls "protecting copyright" can be viewed as a form of regulation designed to enforce the by-the-CD business model and forestall competition based on bundling.
--The telephone industry tries all sorts of bundling. Few of us pay for cell phone minutes one at a time. Instead, we buy bundles.
Trying to regulate cable TV to sell service by-the-channel is like trying to help the music industry protect its business model with so-called copyright protection. It is like forcing cell phone companies to sell talk time by the minute. Yes, you can do those things, but it will raise cost for everyone.
Noted economist Lawrence Lessig suggests that customers ought to own the fibre network that would presumably make cable and phone lines obsolete:
http://www.wired.com/wired/archive/11.12/view.html?pg=5
I wonder what content customers would sell to themselves and how they would package it.
-Brad
Posted by Brad Hutchings on November 23, 2003 01:43 PM | Permalink to Comment