Pricing New Economy Goods

A story following proposals being mooted in U.S. to unbundle cable channels, and offer them a la carte…”Information goods are tricky. The first unit often costs oodles to create, while the next billion units are free. So with video, where cost-based pricing becomes moot, and capitalists conjure ways to push their products out to mass audiences. That is a good thing. So is the competition with satellite TV, forcing cable monopolists to pump up quality. The political reaction to the illusion of higher prices offers to help customers by taking away channels. That is a bad thing. A la carte? Au contraire – prix fixe for the all-you-can-eat buffet, garçon.”

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