In a competitive market, the equilibrium price will maximize total social surplus: http://www.colorado.edu/economics/morey/2010/2010BookChapter.... And as Netflix, Amazon, HBO, etc. are showing, the entertainment industry is highly competitive. They're toppling the giants by creating competitive products (original shows and movies).
You have to remember that this is a coupled system. At the margin, lowering price will increase circulation (and thus consumer surplus), but it will also reduce producer surplus, and in the long run the incentive to produce.
E.g. Netflix has a 30%+ profit margin. They could cut prices significantly and still make a profit. But that would also dramatically reduce their incentive to invest $5-6 billion per year creating new content: https://www.wired.com/2017/01/netflix-investing-original-sho....
No, totally not. Totally not.
The market clearing price is a function of supply and demand - that is all it is.
It has nothing to do with 'maximizing social surplus'.
Yes - it maximizes economic surplus, in the narrow context of that transaction, but that economic surplus does not necessarily reflect social good - moreover - supply and demand are functions of other things entirely.
The easiest way to see this is to look at Monopolies. Monopoly players of a critical good can extract vast, vast profits. What they actually 'do' with those profits is critical to understanding total social good.
Imagine a monopoly provider of gasoline to the US, that takes it's profits and puts them in a room - and does not invest it back into the economy.
This is not 'good' for anyone but the owner of that monopoly.
The same can be seen in rent-seeking in any number of places.
Also - BTW Netflix has about 1% EBITDA [1]. Their gross margins are not that important when you figure you have to pay for 'staff', R&D, 'networking', 'advertising' :).
[1] https://www.google.com/finance?q=NASDAQ%3ANFLX&fstype=ii&ei=...
This means Netflix, Amazon, and HBO have a very strong incentive to engage in _anticompetitive_ behavior to lock the other players out, because in order for one to win the others must lose. This is not a market where people can pick and choose individual shows they want to watch, no, everything gets bundled. Even if you want to watch just a single HBO show you have to pay for all of them. Nothing about this looks like an efficient market to me.
Investors are willing to invest billions in Netflix in the hope that Netflix _wins_ and value can be extracted in the coming decades. This is how it works, and the manic pace at which the different platforms are currently creating premium content isn't meant to be sustainable.
Scientific papers is also not your typical market. I remember reading that university libraries are somewhat compelled to subscribe to the status quo publishers, even if they are disliked. It's an industry where pedigree and tradition is quite important.
I fully agree it's good analyze why the system outputs what it does. I would question the idea a lot of the observable dynamics in the system have been consciously chosen for. That's not to say we shouldn't make the effort now though.