Hmmm... I'd speculate that it happens the same way anything that becomes commoditized happens. Prices start high when there's few producers and they're still experimenting finding out what the right price point is and what the market will bear. Some others see their success and try to bust in by duplicating the originals, maybe undercutting some because there's big margins to be had.
Each additional entrant will bring the price lower, as more and more content becomes available, as all the producers want people to buy their product and deliver more incentives by adding value (either by dropping prices or delivering more per dollar).
Lower margins will inevitably mean that cost of production has to drop, so prices for content creation and management have to drop... although there are advances in reduction of overhead by improved business practices, improved availability of tools, reduced fixed overhead (bandwidth charges, for instance) so people can charge less and maintain margins. Eventually things settle down to the lowest price point where people can still make money (because once people stop making money, they start leaving the business) and you end up with a steady state price point for both provision and creation.
Pretty basic, really... happens with pretty much every market. Except diamonds... those fuckers got a stranglehold on the whole damn business and a great marketing campaign.
