Magazines Looking To Raise Prices?

from the that'll-backfire dept

As newspapers are struggling with the question of whether or not to charge for content online as their print subscribers decrease, Aaron Martin-Colby points us to an article about how some magazines are also looking to increase the subscription fees for their paper magazines. Over the past few years, many magazines have followed the natural progression in a competitive market, and continually dropped their subscription prices, and made up the difference with advertising. Yet, some magazines are trying to buck that trend. The article highlights The Economist and People as examples of magazines who recently raised prices and still saw subscriptions rise. It will be interesting to see if that's sustained, however.

Oddly, the article doesn't even mention the internet as competition -- which seems to be leaving out a big part of the equation. The Economist and People are the sorts of magazines that people have subscribed to for many years, with a strong loyalty. So, I can see them sustaining subscribers even with a modest price increase -- but as alternative sources become more and more popular, you have to wonder if people will start to question if it's worth paying so much, when there's content that's just as good (if not better) available for free online.

Filed Under: economist, magazines, people, prices

Wal-Mart Now Going After Search Engines For Linking To Sites With Black Friday Ads

from the gotta-keep-the-lawyers-busy dept

It would appear that Wal-Mart's lawyers need to come up with excuses to keep billing Wal-Mart every year around this time. Despite the fact that Wal-Mart employees admit that sites posting "Black Friday Ads" help drive more business, Wal-Mart's hired guns keep threatening sites for posting the ads, falsely claiming a copyright on the content (hint: you can't copyright prices). This year, they've stepped it up a notch and are claiming that it's illegal to even link to a site that has such content.

Specifically, Wal-Mart's high-priced law firm has sent a takedown notice to the site SearchAllDeals.com, which is a search engine/aggregator of various deals sites. The site doesn't host any content itself, but that didn't stop Wal-Mart from sending a false DMCA takedown claim to the site (and, of course, a false DMCA takedown is illegal). So, we have Wal-Mart, whose employees think deal sites are helpful, getting its lawyers to send out bogus takedown notices over content that isn't copyrighted, and then sending them to search engines that don't even host the content in question.

It makes you wonder how much the lawyers are charging Wal-Mart... and if the fees are being paid out of the legal budget, or the marketing and promotions budget.

Filed Under: ads, black friday, copyright, facts, lawsuits, prices, trade secrets
Companies: searchalldeals, wal-mart

Wal-Mart Threatens Site Over Black Friday Ad Deals

from the didn't-we-do-this-already? dept

Want to know how we know the holidays are coming? It's not the Christmas decorations already showing up in stores; it's the annual ritual of retailers threatening any website that posts the deals from their "Black Friday" (the day after Thanksgiving) sales circular prior to that day. Last year, Wal-Mart went beyond what others stores had done, in pre-threatening sites. In the past, companies like Target and Best Buy had simply threatened to sue sites after the ads went up. But Wal-Mart took it a step further and threatened to sue before the ads even went up, ignoring, of course that they don't own pricing data. The data on sales prices are not copyrightable and cannot be owned. Wal-Mart simply has no legal leg to stand on in demanding the data from the circular be taken down.

But why let that stop them? An anonymous reader alerts us to the fact that Wal-Mart is already sending the notices out to various sites, threatening legal ramifications if the sites were to post the prices prior to the date Wal-Mart makes them "official."

Filed Under: ads, black friday, copyright, facts, lawsuits, prices, trade secrets
Companies: wal-mart

Will A Google/Yahoo Ad Deal Really Impact Ad Prices?

from the not-so-clear dept

The Association of National Advertisers (ANA) has sent a letter to the Justice Department opposing Yahoo's plan to hand much of its search advertising over to Google. We've already explained some reasons why this combination shouldn't set off antitrust alarms, but the reasons given by the ANA don't make much sense. It claims that the deal would basically mean that one company would control 90% of the market, which would lead to increased prices for advertisers. However, that doesn't necessarily seem true to follow -- because Google doesn't set prices for ads. Google's ad system is, famously, an auction system where the prices are set by the market. So it's difficult to see why the inclusion of Yahoo's ad inventory would significantly raise the prices -- unless the argument is that the market is artificially depressed right now, and this would just raise it to the proper levels. However, apparently, that might not matter much, as reports are coming out that the Justice Department has already hired a big time antitrust lawyer to use against Google. This is increasingly looking like a political attack on a company that is "big" rather than looking to see if its success actually harms or helps consumers.

Filed Under: advertising, antitrust, auctions, justice department, monopolies, prices, search marketing
Companies: google, yahoo

The Net Neutrality Strawman: No One Is Stopping Broadband Providers From Charging More

from the understanding-net-neutrality dept

While I don't think that passing laws in favor of net neutrality is necessarily the right way to go about things, it really is amazing to watch anti-net neutrality types completely make up bogus arguments in favor of their position. We pointed this out exactly two years ago, when lobbyist Mike McCurry wrote a blatantly bogus editorial, claiming that Google didn't pay a cent for its broadband bills, and that it was arguing in favor of net neutrality to avoid having to pay for broadband. This was an outright lie -- and I challenged McCurry to agree to pay Google's bandwidth bill. Not surprisingly, McCurry declined -- though, the organization he represents, Hands Off The Internet, has shown that it reads Techdirt and doesn't mind quoting us out of context when it furthers its telco-funded argument.

Yet, here we are again, with anti-net neutrality supporters are making completely bogus claims about how net neutrality somehow prevents them from charging more. The Wall Street Journal is running an anti-Kevin Martin editorial, claiming that his decision to sanction Comcast for traffic shaping is a victory for net neutrality supporters, and then stating:

Net neutrality proponents.... would prohibit Internet service providers from using price to address the ever-growing popularity of streaming video and other bandwidth-intensive programs that cause bottlenecks.

That's simply untrue. No one is saying they can't charge more for bandwidth. Again, does anyone really believe that Google isn't paying a ridiculously large bandwidth bill? Instead, as Tim Lee describes, net neutrality has absolutely nothing to do with price. What the telcos are really trying to do is get you to pay twice for the same bandwidth. That's because internet connectivity has always been about paying for the connection from your home to the "cloud." We each pay for that connectivity from the ends, to the middle of the network. So, note, all of those connections are fully paid for.

What the telcos are trying to do with breaking net neutrality is also get companies providing services to pay again for connectivity from that middle out to users. As you'll recall, those users have already paid for that bandwidth themselves. So, the telcos are, in effect, looking to double charge for bandwidth already charged for.

This has huge implications when you think about it. After all, if everyone providing content and services to the middle also has to pay to deliver that to the ends, then it makes the initial connection that much less valuable. Telcos may be shooting themselves in the foot by trying to do this. In double charging companies for the bandwidth consumers are already paying for, they may make it such that consumers are a lot less willing to pay for it, since it will be a lot less useful. Note that none of this says that the telcos can't charge what they want for the initial bandwidth -- from the customer to the middle. Net neutrality advocates are simply saying it doesn't make sense to then charge again to send content from the middle outward. After all, it's already paid for, and who pays for "half a connection" anyway? The reason you pay for a connection is to get on the net. Not to get to the middle where the next tollbooth exists.

Filed Under: double charging, net neutrality, prices

Yet Another Report On Why Forcing A La Carte Cable Is A Bad Idea

from the think-it-through dept

If there's one topic that we regularly discuss that many of our readers (even those who agree with us on most other things) disagree with us on, it would be mandatory a la carte cable. We've explained repeatedly why forcing cable companies to offer a la carte cable is a bad idea that would likely lead to higher prices and less choice. Yet people still argue against it, claiming (incorrectly) that they would just order a few channels and prices would decrease. Instead, those fewer channels would inevitably cost a lot more (if they were still available at all) because a la carte pricing for channels reduces demand for individual channels, resulting in higher (not lower) prices per channel. Jeff Eisenach and Adam Thierer have put together a short report looking at the problems of a la carte cable, and noting that even if the intentions of those supporting mandatory a la carte cable are strong, the end result isn't likely to be what they'd expect.

On top of that, it's probably worth pointing out that this debate may soon be moot anyway. As we move increasingly to a world where most TV programs are available online, the entire concept of the channel will go away. It won't matter what channel a particular program is on, because you'll just subscribe to that program, and it will get delivered over the internet. In the meantime, though, there's simply no reason to force cable companies into providing a la carte channel selections.

Filed Under: a la carte, cable, costs, economics, infinite goods, prices

Rogers Tries (And Fails) To Appease Angry iPhone Buyers As Belgians Contemplate $1,000 iPhones

from the ain't-so-cheap dept

Part of the supposed appeal of the new 3G iPhone when it was announced by Steve Jobs a few months back was that it was going to be much cheaper than the old iPhone. That was true until you actually looked at the fine print. The $199 pricing only applied in the US to those who signed a long-term contract with AT&T -- for which you had to pay higher service fees. In other countries the story was also questionable. Up in Canada, the only national GSM provider, Rogers, caused a stir with ridiculously high service plans. After a rather loud protest, Rogers has pretended to relent by having a limited-time offer for cheaper data rates, though still not offering an unlimited plan. This has potential customers still pretty ticked off:

So, all early adopters that will ever be interested in the iPhone will have to buy by August 31. It's a ridiculous idea, and an obvious attempt to turn a concession demanded by the market into a cudgel against its customers -- not only can you not have an unlimited plan, but you can't buy at your leisure -- for example, waiting a few months to see if users reports overcharge horror stories from Rogers' miserly plans. You have to "buy now!!!, this offer is **limited**" What nonsense. If the plan is a bona fide effort to respond to a recognized customer need in a responsible manner, it should not be time limited.

Meanwhile, folks over in Belgium have a different problem. Due to laws forbidding the entirely reasonable practice of bundling goods together with subsidized pricing, you can only buy the phone at full price: which works out to nearly $1,000. On the good side, this has highlighted how dumb the "no subsidized bundling" law is, and politicians are looking to toss it out this fall.

Filed Under: belgium, canada, iphone, prices
Companies: rogers

Advocates Of A La Carte Mandates Misunderstand Infinite Goods

from the bundling dept

Some minority organizations are making the case that a la carte mandates would destroy the market for niche channels. They point out that the market for minority programming like BET and Univision is relatively small, so they (and minority viewers) benefit from being able to tag along with channels that have broader interest. FCC chairman Kevin Martin disagrees, saying that "if a cable operator only wants to carry one channel, it should not be required to buy 10 or 20 channels in order to do so." Martin seems to be thinking of cable channels as tangible products like cars or toasters: if people are only "required" to buy the channels they really want, they'll save money because they won't be "forced" to waste money on other channels they're not interested in. But this argument ignores the fact that television content is an infinite good. The costs of delivering cable content is almost all fixed; once coax has been run to a customer's house, it costs almost exactly the same to provide a given customer with every channel on the cable network or with only one channel. As a result, bundling is economically efficient: throwing in additional channels increases the value of the cable service without imposing any extra costs on the system.

People imagine that an a la carte mandate would mean that if they're currently paying $50 per month for 50 channels, then they should be able to pay $1 per month for one channel. But that doesn't make any sense. Switching a given customer from 50 channels to 1 channel doesn't reduce costs (the other 49 channels would presumably still be produced for other viewers), so why should the customer expect a lower bill? If anything a switch to a la carte actually makes things more expensive because in some cases cable companies have to install new equipment and set up a more complicated ordering and billing system to keep track of who had signed up for which channels. In reality, what would happen is that the cost of each channel would go up a lot. Instead of $1/channel, cable companies might charge something like $8/channel, with each customer choosing 6 channels on average. The result would be that most people would pay about the same for a lot fewer channels.

It's a mistake to think of bundling as being "forced" to pay for channels we don't want. After all, non-sports fans don't get outraged about the fact that they're "forced" to take the sports section with their morning paper. The right way to think about it is that you're paying for the parts of the bundle that interest you, and the rest of the paper is a freebie that doesn't cost you anything extra. It would be silly to demand that newspapers price each section of their paper separately and let you do without the sections you don't want. It's equally silly to demand that cable companies not show you channels you're not interested in watching, since those aren't costing you anything either.

Filed Under: a la carte, cable, costs, economics, infinite goods, prices

Blu-ray Prices Go In The Wrong Direction (For Now)

from the wait-and-see dept

Gizmodo points us to the news that it appears Blu-ray DVD player prices have gone up, rather than down, in the wake of finally winning the standards battle with HD DVD. Of course, the immediate finger pointing is to the fact that it no longer needs to compete with the cheaper HD DVD players (and certainly that new HD VMD thing isn't serious competition). However, it seems unlikely that this price hike will last very long. As more movies come out on Blu-ray and competition heats up between the makers of Blu-ray players, price drops are inevitable. Besides, given the growing (if still quite weak) efforts to deliver movies online, Blu-ray isn't completely free and clear of competition. Besides, as the Tom's Hardware article makes clear, buying a standalone Blu-ray box these days doesn't make much sense, as the standard is about to be upgraded, and most of the players on the market today won't be upgradeable.

Filed Under: blu-ray, competition, prices