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What is Monopsony?

cOMCAST  BECOMES bIG vROTHER 3We all know what a monopoly: is one seller with many buyers. Exxon’s ancestor, Standard Oil, controlled  all the oil in the US.   A monopsony (pronounced muh-NOP-suh-nee) is one buyer with many sellers. So if Amazon become the only way of selling books, it will be a monopsony, the only option for authors to sell to their stuff, forcing the authors not only to  sell for less but to only write what Amazon will buy.

That is exactly the threat posed by Comcast’s purchase of Time Warner.  Worse yet, like Amazon, Comcast has already become an “author,” a provider of programming itself.  The classical example of a monopsony is a milk processor that forces all the dairy farms to sell their milk to the processor.  But, in the case Comcast is also owns the cows!

 

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