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Looks Like Competition In the Music Industry is Working

Harold Feld writes about the falling revenues of the music industry being attributed to the increase in competition brought by new technologies:

"As reported by the NYT, legal music downloading for which record labels received royalty payments more than doubled last year. Nevertheless, the industry is still not making as much money as it would like. Unsurprisingly, the industry and sympathetic trade reporters attribute the difference between the huge profits the industry actually makes and the obscene profits to which they believe they are entitled to ‘piracy.’

Allow me to proffer a different explanation: we should expect that technology that shifts power to customers and makes the industry more competitive will lower the profit margins for incumbents. That’s Econ 101. In fact, if we didn’t see a decline in profits, it should make us profoundly suspicious of claims of competition. Competition, after all, supposedly lowers prices — remember?" -- Read more @ PublicKnowledge.org