Quote The Byre:
The Internet is moving us to a point of near perfect competition and therefore to a point (within markets such as eBay and MySpace) where no competitive advantage is to be gained over the millions of other entrants.
Or to put it another way, don't go there Sister!
That might be true if the Internet was the market, but the Internet is just the channel / shop window / market stall or whatever. The same applies to MySpace.
And that might be true if acts supplied undifferentiated commodities, but they don't.
eBay on the other hand IS effectively a marketplace for certain goods, but by no means all. If I put my original Spinal Tap stonehenge on there, it makes no difference that there may be a 'perfect market' for HP toner cartridges (if indeed there is).
It has always been the case that music acts and writers only add value in so far as they differentiate their goods and services. If I enter the hair metal market looking and sounding identical to the average band my profit prospects will indeed be slim. If I am the loudest, catchiest, sexiest, and most prominent, my profits will be better. It makes no difference that the market for an average or perfect good is efficient because of the numbers.
Economics must have a factor that allows for differentiation in a perfect market (which I'm pretty sure can only ever apply to uniform commodities). But I'm not an economist.