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China Is Quickly Switching From Pirating To Streaming (cnn.com)
hackingbear shares a report from CNN: Not so long ago, China was an oasis for pirated music and videos. CDs and DVDs were easily copied and sold for cheap at roadside markets. If you had a computer and an internet connection, top selling albums and Hollywood movies were widely available for free online. That's changing fast as new technologies such as the convenient WeChat payment and a long-running crackdown on pirated content mean members of the country's growing, smartphone-wielding middle class are increasingly willing to pay to stream videos and music online. "When you have to spend two-to-three hours digging up pirated content, users are willing to pay a [small] amount of money to get non-pirated content," said Karen Chan, an analyst with research firm Jefferies. Across major Chinese video platforms, the monthly fee is about 20 yuan ($3); streaming music is even cheaper, ranging from 8 to 15 yuan ($1-$2) per month. Compare that with a basic monthly Netflix subscription in the U.S. at $8, or a Spotify one at $10. The rapid spread of digital payment platforms like Tencent's WeChat Pay and Alibaba-affiliated Alipay has also played a role, according to Xue Yu, an analyst with research firm IDC. The platforms created a market of young Chinese consumers comfortable with buying goods and services for a few yuan online, Xue said.
Travelling, I have learned that US Copyright ends at our borders...Mexico City ? All programs all day $5 before haggling. Any military base ? Please fill the group hard drive with whatever movies or music you have. The demise of Net Neutrality is a gift to content providers...once an ISP is responsible for your russian downloads that hole can be plugged.
Most customers understand the difference between fixed and variable costs, but many believe that when the marginal costs are near zero, the product should be priced lower than when the same product has marginal costs that are much higher. Suppliers of course believe that pricing should reflect what the market can bear. Therein lies the dilemma.
If demand can be increased by reducing price such that more profit can be made, suppliers would be better off. Unfortunately many suppliers are afraid of upsetting existing markets by changing strategies. And of course some take the alternative tactic and increase price (and profit) per unit [cough] Apple [cough] while reducing overall demand for a product. This, however, makes very little sense in a market with near zero marginal cost unless you have totally inelastic demand.