Wednesday, 20 April 2011

Supply, demand and digital distribution

When digital copies are abundant and selling like mad, should the price be lower or higher? I think that's probably looking at the problem backwards. A lower price drives demand, and because the supply never runs out, you don't have an incentive as the supplier to raise prices in order to maximise your profit. The lower the price, the more people will buy your movie, book or music and vice versa. Already music and book downloads are settling into a $1-per-unit price model, simply because that's where the maximum demand and profit lies. Movies and TV shows will probably get there too. It's just a matter of time.

Mokalus of Borg

PS - I look forward to those times.
PPS - Then they just need to get rid of the DRM and I'll actually start buying things.

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