SUMMARY: Before the Kindle, was the price of a book merely a function of its printing, production, and distribution costs? Or was the price a measure of its value to the consumer? If it was really the former, then one would expect prices to fall with the advent of a digital distribution network. But if it’s the latter, then why are prices of books, movies, music, and software falling?

I noticed something interesting about my own behavior this weekend using Netflix, and I can’t help but wonder if it applies to others.

Netflix recently came to Canada with a $7.99/month all-you-can-eat, streaming media service (movies & TV) that works with your computer, iPhone, iPad, Sony PS3, and Wii. Despite a dearth of recently released movie titles, I can see this service severely cutting into my own visits to the local Blockbuster. Not only can I pick from a huge library of titles and watch them on demand, but Netflix does a decent job of recommending shows that I’ll likely enjoy. Read the rest of this entry »