I haven't been posting, coz time is rather tight. But still, this fine Sunday afternoon prompt an inner side of me to post some stuff, just as an escape from the stress of life (laugh).
The Sunday Times Headlines screams "Football fans bear brunt of pay-TV battle' (actually, the headline SHOW ME THE MONEY on Ronald Susilo who might take legal action against his ex-fiancee Li Jiawei attracts my attention more. Haha).
While it is generally true that a more competitive market generally contributes to more consumer welfare, we have to analyze deeper than the simple competitive market model. While having another competitor offering similar products generally shift out the supply curve, the thing is, having another bidder actually increases the demand for the same supplier of the product -- the EPL and Champions League content. In the end, they end up paying more to win the bids of the content and in the end pass on the higher costs on consumers due to inelastic demand curve (and supposedly elastic supply). Plus the bundling pricing strategy captures a higher producer surplus (since most people who pay the bundle only wants to watch football more than the rest but has to pay 'extra' for the other contents).
The ultimate winners are the football clubs and football players (and the distributor of football contents) since they command high monopolistic power. It' s no wonder football stars are earning so much money.
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