Arnold Kling  

Which Monopoly?

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Austan Goolsbee, one of the new members of the "Economic Scene" rotation at the New York Times (Tyler Cowen is another), writes


In their fervor to free listeners from the shackles of their iPods, French politicians have abandoned one of the guiding principles of antitrust economics: penalize companies that harm consumers, not the ones that succeed by building better products.

Apparently, the French National Assembly thinks that the code in the iPod ought to be open source, so to speak. They do not like it that Apple has created a monopoly.

If nothing else, what's wrong this picture is that the real monopoly issue is with the music publishers. According to Goolsbee, their royalties are 65 cents, which would tend to put a pretty high floor under the price of a song.

If the French can figure out a way to break up the music publishing trust, then more power to them.


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COMMENTS (4 to date)
Giovanni writes:

How do the publishers have a monopoly? It's not like there's anything blocking new players from stepping in to develop and promote music talent with different contractual terms.

Giovanni writes:

Apple uses their leverage of proprietary technology to limit competition at each stage of the digital music chain: the hardware players, jukebox software, and online distribution. I don't think this is unethical or should be legally broken up, but I can see why it annoys people.

Music publishers have no leverage to stop new competition in their field. The only thing limiting entry is pessimistic outlooks on growth, high cost of entry, high risk, and a long path to steady revenues.

Mcwop writes:

Chirac unveils his grand plan to restore French pride, and compete with Google:

http://technology.guardian.co.uk/news/story/0,,1761482,00.html

Bill Stepp writes:

The French could start by abolishing copyright and compulsory licensing. Then they'd be ahead of America.

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