Monday, April 01, 2002

Cripple the aftermarket A while ago the recording industry got Garth Brooks to try and ban second hand CD sales. This failed. Note that banning resale would not effect new CD purchases--if I can sell my CDs second hand then the cost of a new CD falls to its sale price minus it's resale price, so I can afford more CDs overall and the revenue remains unchanged. But eliminating the aftermarket by banning resale does allow recording companies to price discriminate by charging different amounts to different people (right now they simply collude to charge the monopoly price).

The recording industry wants to price discriminate when it sells digital music, but here the aftermarket problem is even more acute (as people are happy redistributing at marginal cost). I'd say 80% of current RIAA funded legislation is focused on crippling the aftermarket for music sales so they can price discriminate, 10% is on protecting their cartel, and the remaining 10% is on appropriating rents from artists. (link via Government Monkey)


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