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Message: <blockquote data-quote="Raven Crowking" data-source="post: 4345959" data-attributes="member: 18280">Prices rose significantly, then dropped due to the "piracy" (file sharing) models that arose in direct response to those rising prices.  The music industry also managed to get the government to give it a "tax" on all blank CD sales so that it could maintain its profit (a policy that allows for hidden pricing, btw).  Currently there is a move by the US-led entertainment industry to squash file sharing in those countries where it is legal.  If this succeeds, the prices will again go up.It is a pretty iron-clad law of economics that prices will rise as far as the market will bear.  The existance of significant and diverse sources of competition acts as a counter to rising prices.  This is easily illustrated by gas stations, where the raise in price at one station causes all stations in a city to go up, and where gas prices rise at the start of long weekends or holidays.  When there are only a few suppliers of a given product, they can (either directly or indirectly) work together without fear of being significantly undercut.  This is exactly how gas retailers work.In the case of movie theaters, as theaters in North America amalgamated, prices rose significantly.  The rise of DVDs, though, supplimented by the rise of file sharing, has worked to bring the cost of going to the movies back down.  The market will not bear the cost of a high ticket price unless there is a significant advantage to that price over other distribution methods.  Again, the short-term solution is to lower ticket prices, but the long-term solution is to target other distribution methods so that ticket prices can go up again.It is not "evil" to undercut your competition and drive them out of business, but it would be foolish indeed to then minimize your profit by leaving your prices low.  And it would be foolish indeed to imagine that anyone, anywhere, is going to do so.  Simply put, the buck you save today might well cost you ten bucks tomorrow.RCEDIT:  Another example:  I recently bought a used vehicle and had to get a safety certificate.  I went to Canadian Tire, and I was given an estimate of $1400 to get the certificate.  I declined, and had to pay nearly $80 for doing so.  Two days later, through sheer luck, I found a much better mechanic who completed all work for $625 and certified the vehicle to boot.There was a time, when Canadian Tire was just starting out, when its prices and "Canadian Tire money" offered a significant savings.  Now, Canadian Tire is the market leader in Canada, and no amount of Canadian Tire money is worth paying an extra $777....assuming that they don't go over estimate.</blockquote>

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