It’s not an equilibrium price, because the average cost is higher than the marginal cost (which is indeed close to zero). Free markets don’t work unless the marginal cost (and the price) is higher than the average cost, for obvious reasons.

The average cost ist always higher than the marginal cost for digital products, for obvious reasons. So you are literally saying free markets don't work for digital products.

That's not true. There are a number of obvious instances of it working.

YouTube/TikTok/etc.: The market price is zero, the service itself and much of the content is funded through ads.

Debian/Firefox/etc.: The market price is zero, the development is provided through user contributions/donations.

Substack/OnlyFans/etc.: The market price is not zero and then the content is often available for free anyway, but enough patrons choose to pay to fund its creation nevertheless, either because they don't know how to pirate or choose not to. Maybe this is the same as the donation model in all but the eyes of the law, but in any event there are objectively people making a living from it.

I'm afraid you don't really understand what you're writing about. Terms such as marginal cost and average cost are used only for goods, which are sold on a free market for a price. Your examples are services or freeware, you can't calculate marginal cost and average cost for a service or freeware.

The problem ist that a production of f.e. a movie costs money. If the people that make movies don't earn money, they will not make any movies. So they have to earn that money somehow. If the price of their good is 0 why should they bother with filming?

They could earn their money by not actively pissing off their customers. The streaming industry proved that consumers prefer paying for convenient streaming over messing around with privacy.

For some reason, they feel they need to burn their own industry down in order to prove that people prefer piracy (or not watching) over inconvenient streaming setups. Is anyone really surprised by the current outcome?

Yes, distribution is a service, and providing good service adds value that people are willing to pay for.

I can cook myself using only my free time.

But I'm willing to shell out some money for having someone cooking for me and doing the dishes.

Yet, only if the price is right.

A good legal bargain kills illegal ones. But then capitalism greed comes, with that enshitification, and as that lowers the legal bargain value, illegal comes back.

Everyone else saw Netflix making a lot of money and decided just making a healthy amount of money renting the rights to them they had to try and make more money releasing their own service. Gotta love modern capitalistic greed. I wish streaming services was like movie theaters where production companies are not allowed to own theaters (aka the distribution network).

Owning theaters was forbidden for movie studios, but afaik making movies was always allowed for theaters.

> Everyone else saw Netflix making a lot of money

At the time Netflix was literally making a cash loss despite paying less than the cost of production for most of it's output.

Because they love making movies, and can find other ways to get people to pay them for their labor rather than for copies of the movie. This is already happening today.

1. That IF is untested, it's hypothetical corporate propaganda.

2. That's a problem for them to solve, it's not a problem for me to solve by going like "alright Sony, I'll do you this solid and pay and inconvenience myself instead of pirating just because I like you and I know you're struggling" wink wink

Honestly that sounds like their problem, not mine. There is a catalogue of movies and TV shows stretching back a century, I don't need more made. The number of worthwhile movies made a year is roughly 100x less than the number of worthwhile movies already made, and there are enough of those to last me forever.

Don't polarize. There are many in-between states.

I pay to see movies in the cinema. A few weeks / months later I could pirate them if I want to watch them again.

I have paid once. I am not paying again. It really is that simple but they will rather die than do honest business.

If the market sees movies as being worthless (a price of 0), why would they even consider making movies? Clearly nobody wants them.