The Economist takes a look at the movie business and calls it ailing link here. It sketches out the trends and competition-induced changes from the rise of new technologies and the responses of consumers. Consumption has gone from movie houses to homes, from tape to DVDs to Blu-ray, from sales to rentals, from video stores to kiosks like RedBox and now to streaming on line. One gets the impression that this is a vibrant industry with lots of innovation but the industry sees its revenues declining and profits under pressure. Competition has kept the adoption of new technology rapid despite attempts to suppress it.

The article fails, however, to mention the fact of copyright and the long and stringent monopoly it provides, far in excess of the minimum to induce investment or innovation. That is evident by the rush to reduce prices and expand the services. Nor does the author address how the creator of these stories and films gets a very small part of the total revenue generated by the industry. I almost forgot the lawyers and litigation as a significant barrier to competition and maintaining prices higher than they would otherwise be.

It is difficult to imagine what the industry would be like without copyright. Even more innovation and lower prices? In reaching a conclusion, it is hard not to conclude that the consumer would not be still better off; he pays for all of this, in the form of high theater prices, and expensive media sales and rentals. This could not occur without copyright.