Mini - Monopoly
A situation in which only one company can produce a specific product but many companies can produce separate products within the same class.
Every intellectual property is essentially a mini – monopoly. For instance, Lucasfilm has a mini – monopoly in Star Wars. Likewise, all video games, TV series, and books are mini – monopolies. For this reason, there is not as much direct competition in these industries, despite all appearances to the contrary. In fact, the size of the market for a product class like movies, video games, TV series, or books is partially determined by the demand for each mini – monopoly and thus is indirectly determined by the quality of the various products within the product class.
Simply put, if you want to know why movie sales are down, it’s probably because the movies being put out suck individually and thus movies sales in the aggregate suck as well. Ditto for video games.
Actually, even more so for video games. There’s a complicating factor here. The unspecified demand for movies is far higher relative to the specified demand for movies than the unspecified demand for video games is relative to the specified demand for video games.
Let me put that into English. People often make the choice to see a movie without first deciding upon which movie to see. No one (except a well meaning grandmother buying a Christmas gift) decides to buy a video game without first deciding upon which video game to buy.
Demand in markets made up entirely of mini – monopolies can not be analyzed to the same extent as demand in markets made up entirely of undifferentiated products. A drop in video game sales or box office receipts is not necessarily indicative of the unspecified demand for video games or movies; it is merely indicative of the specified demand for the particular video games and movies currently available for purchase.
Turning down a piece of moldy bread doesn’t mean you’re on the Atkins diet. Nor does foregoing a god awful movie mean you’ve become a shut in. That’s why the demand for mini – monopolies must be evaluated on a case by case basis.