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Malaysia Plans To Cut Disc Prices To Curb Piracy
from the who-cares-about-market-economics dept
Malaysia has an interesting strategy for combating CD and DVD piracy. They're going to start controlling the pricing of all movie, music, and software offerings, and will set the prices so low as to be competitive with what the pirates are selling. This is an interesting strategy, which basically ignores all free-market economic thought, and forces all such content providers to agree to the low prices the government sets. As you might imagine, those who sell legitimate copies are not at all happy. As one of them says: "It's like asking luxury goods makers to reduce prices because there are so many fakes out there." I agree that this is a bad plan. Companies should be allowed to charge whatever they want - and then consumers can make the decision for themselves. If the prices are too high, then not enough people will buy, and the producer should be forced to drop the price thanks to the market. Controlled pricing takes away the efficiency of the real market - and suddenly puts them in the pricing business, when they have no idea what the proper price for an item is. While I think it does make smart strategic sense for companies, themselves, to offer a price that is close to the pirated price, that doesn't mean that they should be forced to do so.
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Controlled pricing
I have to say, I'm surprised by your stance - you're always railing about how the industry "doesn't get" customers. Here a gov't forces them to "listen to their customers" (or at least acknowledge what they are doing, albeit for their own reasons, ie. cut down on black market crimes and regain lost tax money from black market sales). Maybe that's just an indication of how far out of whack the industry is.
Can't wait to see if this actually works.
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Re: Controlled pricing
There was an example of this in Santa Monica, CA (or some SoCal city). What the city gov did was, they decided it was unfair for ATM to charge people from other banks the 2 dollar fee and banned the practice. Banks answered back by not letting people from other banks use their machines for cash.
If the government forces someone to sell at below cost, it may make more sense to not serve that market at all.
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We know going in the opposite direction like Sweedon's doesn't work. It sounds novel.
Although, I don't understand how this even begins to address the problem they're talking about.
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Dog catcher wagging the tail wagging the dog...
A cooperative approach of both parties (competitive pricing + punishment for infractors) would be better and more fair...
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