Music Companies Convicted of Price Fixing Again

InspectorPraline writes "Providing more proof that the record industry is indeed a oligopoly, this article at the New York Times reports that two major record companies, Vivendi Universal and Warner Communications, have been convicted of price fixing by the FTC over a recording from 1998 of the Three Tenors. While Warner reached an agreement with the FTC about a year ago, Vivendi continues to deny wrongdoing and will, of course, appeal." The FTC's release is quite informative, describing the entire case.

Comments

Anyone surprised?

[Mullen]

By now, no one is surpised by price fixing and record companies. Even my 60 year old mother, who buys about 12 CD's in a year, made a comment to me about how the cost of making CD's goes down, but the cost to consumers does not.

I just don't see how the FTC can not bring the hammer down on these companies. It is just plain obvious that they price fix.

Re:Anyone surprised?

[lunenburg]

The day I can send the music companies an album on vinyl or tape, or send them a broken CD, and get a replacement back on the media of my choosing for the cost of shipping, is the day I'll buy the "You're buying content, not the delivery device" argument.

Re:Defending the Record Companies in some Ways

[Anonymous Coward]

I'm not sure of the exact price that it takes to put together a music video, but i imagine its in the millions, now the artists themselves sure as hell don't pay these costs.

Actually, a lot of them do. why do you think groups like TLC were broke after so many hit songs. They got a little more than $1.00 per CD sold but they had to pay all of the expenses for videos, and their tours. The artists are still getting the shaft. And don't give me that crap about "The record company only get's one diamond for every 100 pieces of rock"...last time I checked, diamond producers were very very wealthy, and so are record labels. If the recording industry wasn't making an ass load of money, it wouldn't be the recording industry....it would the recording company because no one would want to do it.

It's Not Just The Record Companies

[krmt]

Yes, I understand that record shop employees need to eat, but that doesn't mean that this should be happening. If the record only costs a couple thousand to make, then it can be sold overall at a lower price in order to recoup the expenses. You can still tack on the same cost for shipping and retail profit, and still have a lower cost because the entire manufacturing process is cheaper.

This is how other products work. Lower manufacturing costs lead to lower retail cost. In both examples, there is some kind of price fixing going on.

I never explicitly said that it was the record companies colluding, but it appears that it's the whole chain. Remember, the middleman is who gets hurt the most by people downloading music, and the middleman in this case is the record store. The fact is that both these examples demonstrate that something is going wrong and that collusion and price fixing is taking place.

Somehow I doubt that when Massive Attack's new album comes out, if they try to do the same thing, that the SRP will be any lower than the other CD's on the shelf, and as a result, neither will the actual price. So, once again, the consumers and the artists get the shaft.