Eric Rescorla wrote:
You are right that producers would want to segment the market, but we have no reason to introduce extra laws to help them. We would only have a reason to do that when segmenting the market results in greater efficiency, not merely greater profits.No, this isn't true. Say that Americans are willing to pay 50% more for DVDs than Europeans. It would make sense for producers to attempt to segment the market.
With DVDs we have a complex situation. Supposedly studios can make more per film, so they can afford to make more marginal films. Also more people are offered films at a price they can afford. Oddly, in practice it doesn't seem to work this way. Films tend to be launched in the US, which is one of the lowest cost markets. Films that do badly could theoretically be released at a higher cost in other markets, to recoup the expenditure through differential pricing. In practice they seem to be dropped.
Coupled with this, we have the negative effect on the technology industry that results from DRM. A small efficiency gain for the content industry could become a large efficiency loss for the technology industry. Suppose that open source operating systems were technically able to play DVDs but were prohibited from doing so by law. Suppose also that open source was a much more efficient economic model. You would now have a more classic case of market distortion, which also gives rise to inefficiency.
One last point is that governments serve the interests primarily of their own people. So the job of Britain's government is to get me, and other Brits, the best possible deal on films within the UK. This might mean balancing the interests of British consumers against British film producers. It doesn't mean balancing British consumers against foreign film producers. If no films were made in Britain, the government would logically insist on a completely free market that allowed parallel imports and circumvention measures.
I agree; for example copyright itself is a restriction on commercial freedom in a sense. You have to weigh up the pros and cons in each case. For me the collateral damage from DRM and region locking is simply too great, and so I believe it should be prohibited (or that people should be allowed to circumvent it, which would have the same effect).I don't speak for Mr. Denker, but the point I think is relevant here is that there are a fair number of situations in which removal of some freedom would result in a superior situation for everyone (Pareto-dominant). I'm not convinced that maximising freedom is the best approach in all such cases.
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Pete
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