Reply to post: Re: Reality has a strong non-libertarian bias...

EU geo-blocking: Ansip's crusade liable to disappear through 'unjustifiable' loophole

browntomatoes

Re: Reality has a strong non-libertarian bias...

Regional pricing could be looked at as an implicit subsidy which runs from richer countries to poorer ones. Without it, the economically logical thing to do for companies selling in both territories at the same/similar prices would likely be to set a revenue maximising price somewhere in the middle of the two - i.e. a price cut for those in rich countries but an increase for those in poorer countries. This would most likely result in less revenue for producers than a system where regional pricing is in place, which explains why they are opposed. After all, in an ideal world, given their product has almost no variable costs to produce, they'd like to offer a different price to every single customer based on the maximum that customer would be willing to pay; this doesn't mean that the rules of the market should be rigged to make it easy for them to do this, since that is economically a bad thing.

The big problem is that if regional pricing were abolished, the resulting price cut for those in rich countries would likely be smaller/less noticed than the concomitant increase in poorer countries. The EU commissioner has simply (somewhat belatedly) noticed that this is rather poor politics. Thus the real opposition has nothing to do with niche languages/cultures (the market for local content would arguably benefit in many areas due to an increase in the price of foreign content if geographical pricing differences were lifted), and everything to do with being blamed for increasing the price of some people's pay TV quite a lot.

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