Slashdot Mirror


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.

67 of 217 comments (clear)

  1. Hmm... by ceejayoz · · Score: 3, Funny

    Yay! So now they'll change their evil ways and become good corporate citizens, right?

    *cough* yeah right *cough*

    Took 4 years for one record, what about the thousands of other CDs that come out every year? Something tells me this is just gonna be a slap on the wrist that they'll recover from quite quickly.

  2. Price Fixing? nah! by Myselfthethoom · · Score: 5, Funny

    In other news senators carrying large bags of money proposed changing the law and making it legal for music companies to DOS people accusing them of price fixing.

    --
    "Beware of he who would deny you access to information, for in his heart he dreams himself your master"-Unknowen
  3. Only for the 3 tenors world cup live concert cd? by mochan_s · · Score: 2, Interesting

    As the concert approached, the complaint alleged, Warner and PolyGram became concerned that the audio and video products resulting from the Paris concert would not be as original or as commercially appealing as the earlier Three Tenors releases. To reduce competition from these earlier releases, the companies allegedly adopted what they called a "moratorium" agreement. Through this agreement, the complaint alleged, PolyGram would not discount or advertise the 1990 Three Tenors album and video from August 1, 1998 through October 15, 1998 (the "moratorium period"); in return, Warner would not discount or advertise the 1994 Three Tenors album and video during the same interval.

    I guess this is price fixing but what about all the CDs that are released. Aren't they all over-priced becuase of all the record companies working together to raise prices?

  4. Anyone surprised? by Mullen · · Score: 5, Insightful

    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.

    --
    Linux O Muerte!
    1. Re:Anyone surprised? by FatRatBastard · · Score: 4, Insightful

      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

      That's because your grandmother isn't buying plastic discs. She's buying content. The CD is simply the device by which it is delivered, and is only one part of the 'cost' of the product. This is no arguement for proof of price fixing (If so we could sue each and every book publisher for not adjusting the price of a book every time the price of paper changes).

    2. Re:Anyone surprised? by jelle · · Score: 2

      "She's buying content"

      Whatever. All I remember is that back in the eighties, the record companies all increased the price of albums when they went to the black LPs to the silver CDs with the argument that that was because of the higher cost associated with the new medium and the promise of returning to the LP price as soon as the medium cost went down.

      Well, the medium cost has gone down, now where are the promised price reductions? Twenty years and still higher cost of CDs manufactured in a few huge fabs than those big black LPs that were manufactured in a much higher numer of smaller operations? Sure.

      All I can see is record companies not keeping their promise by keeping the price of CDs high.

      They've created a oligopily and the consumer is the victim.

      --
      --- Hindsight is 20/20, but walking backwards is not the answer.
    3. Re:Anyone surprised? by lunenburg · · Score: 5, Insightful

      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.

    4. Re:Anyone surprised? by Mullen · · Score: 2
      I hesitate to write this, because it almost, even to me, appears to be a troll (my reply, that is, not your post)

      I made an observation. It may not be true, but it's an obervation. However, I still think it is true.

      . But the answer is money. It's always money. And money, when it comes to the entertainment industry, doesn't just sing (ironically enough), it fscking yodels. The FTC is the Federal Trade Comission. They're governed and directed by laws. Politicians make the laws. The politicians get a significant amount of support from Political Interest Groups.

      I don't think this is true either. The FTC and a number of Government regulators have gone after companies and groups for colusion and price-fixing. Take alook at the Oil, Banking system, Cars, Stock sales, and Airline industries. In this case, the modern Music industry is new and it takes Government to react and move on something.
      The music industry, I think, tries to stay off the FTC radar so it does not get busted. That is why were not seeing the FTC go after them.

      --
      Linux O Muerte!
  5. I though the prices were always fixed. by FreeLinux · · Score: 4, Funny

    Has anyone got this Three Tenors album in mp3 or ogg vorbis? I haven't heard it yet.

    Bwahahahaha

  6. hmmmm by martissimo · · Score: 2

    well according to this:

    James P. Timony ordered a series of companies, all of which are subsidiaries of French corporation Vivendi Universal S.A., among other things to cease and desist from entering into "any combination, conspiracy, or agreement" - with producers or sellers at wholesale of audio or video products - to "fix, raise, or stabilize prices or price levels"

    lol, unless "among other things" is a big whopping fine which, i seriously doubt since that would have been certainly mentioned...

    this decision basically amounts to a "stop doing that" decision, yeah that oughta get their attention

  7. Re:Defending the Record Companies in some Ways by fluxrad · · Score: 4, Informative

    you really have no idea what goes into the making of an album/video/star, do you?

    1. Most videos don't cost that much...maybe a couple hundred grand for some extremely famous bands, shooting in to the millions only for videos done by people like Michael Jackson who usually fund a lot of it themselves.

    2. Most bands flop. This is the reason the record labels buy in bulk when they're searching for talent. For every Britney Spears, there are 10-20 "chick" singers you never heard of because they didn't sell shit. Of course, if you actually get to make a second album, most of the procedes are spent paying the label back for the first one. The record companies don't have that much influence on who becomes a star or not when all is said and done, they just have the ability to put it on the shelves and see who buys what. You need to start looking at companies like BMG, Geffen, and Sony as nothing more than gigantic venture capital groups for musicians. Except the "interest" rate they charge for their benevolence is basically usury!

    btw - please back off the stream of consciousness style of posting next time. it's hard on the eyes, you know.

    --
    "It is seldom that liberty of any kind is lost all at once." -David Hume
  8. Re:Defending the Record Companies in some Ways by Anonymous Coward · · Score: 5, Insightful

    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.

  9. The Three Tenors? by tux-sucks · · Score: 2, Funny

    Oh, I was thinking for a moment that it could have been important.

    1. Re:The Three Tenors? by ceejayoz · · Score: 2

      Hey, some of us actually have taste in music.

  10. Remarkable. by miffo.swe · · Score: 4, Insightful
    How can they screw us over with one face and cry about how they need DRM with another. All this at the same time that they arent losing money to pirating but to games.

    Realese som good music instead of brainwashing people with BSB and Britney Bimbo and maybe we ll feel that the music is worth paying for. As of today most isnt worth the plastiv its printed on. Note, thats not the artists fault. Pink is a good example of that!

    --
    HTTP/1.1 400
    1. Re:Remarkable. by Em+Emalb · · Score: 2

      from above:
      "How can they screw us over with one face and cry about how they need DRM with another."

      Dude, it's called greed. It's also called if they can get away with it, they will. Seriously, if you were an unethical, monopolistic slave to the dollar, you'd be the same way. Lucky for us, you're not.

      Soon, real soon, I believe, people will wake up and smell the coffee, and realize they have been getting screwed and this will change.

      --
      Sent from your iPad.
  11. Re:Canadian Price Fixing by Sludge · · Score: 2
    I'm not sure how HMV decides the cost of albums. I just bought a new release yesterday (Jerry Cantrell, Degradation Trip) for $17. I could spend $25 on some single-platter CDs.

    I was wondering about the costs of goods which are arbitrarily priced: a lot of prices are given because they sound good, ie: $647 over $650 or $17.99 over $20.00. Because of the exchange rate, are we getting a better deal on CDs than the Americans in some cases, just to hit the selling pricepoints?

  12. Re:Defending the Record Companies in some Ways by fluxrad · · Score: 2

    Only CD contents means. And it's not shown in stores.

    Actually, most of it is. You can go to any number of shops that'll bust open a CD for your previewing pleasure. In Denver we've got Twist & Shout, Wax Trax, and Recycle Records, to name a few. Plus there are dozens more stores that have the at least newest albums available at listening stations.

    Of course, that doesn't mean that the music you're listening to doesn't suck in the first place ;-)

    --
    "It is seldom that liberty of any kind is lost all at once." -David Hume
  13. Re:Canadian Price Fixing by Daetrin · · Score: 2
    Sounds similar to the way things work in America, in eraticness if not an exact correlation.

    CDs sell at a lot of places for about $18.99, but when they first come out, or the store is having some kind of special they're often at $12.99 or $13.99.

    Then other stores that focus on music (and sometimes DVDs) only will often have then in the $14.99 to $16.99 range or so.

    So if you can find it on sale you want to get it at one of the big stores, but if it isn't on sale anywhere you're better off going to the smaller music stores.

    --
    This Space Intentionally Left Blank
  14. Re:when by miffo.swe · · Score: 2, Insightful

    Your sig about MTV says it all doesnt it? The music industry has taken a good healthy music collective and made it into a money milking cow. MTV was good but all it ever plays now is either corporate sponsored release promos (they call it hresh or something) or crappy mainstream (corporate owned) elevator crap.

    --
    HTTP/1.1 400
  15. Look at the bright side... by Daetrin · · Score: 3, Interesting
    At least in America we maintain the fantasy that things are supposed to be fair, so the FTC can ocasionally crack down on the record companies if they're blatant about breaking the rules.

    I've been told that in Japan the record companies have some kind of agreement with the government allowing them to fix prices, which is why Japanese CDs cost $30 and the American imports were about $15 or a little over (this was a few years ago, funny how CD prices have gone _up_ as the technology has gotten cheaper, neh?)

    --
    This Space Intentionally Left Blank
    1. Re:Look at the bright side... by edwdig · · Score: 2

      The story I heard years ago about Japanese CD prices is that each album only gets one pressing. Because of the limited quantity, they cost more.

  16. Re:Horray! by Daetrin · · Score: 2
    Slap on the wrist, slight embarrassment, wait 6 months, repeat.

    You forgot the make millions in extra profits from the fixed prices step!

    --
    This Space Intentionally Left Blank
  17. You Don't Have To Be A Thief by krmt · · Score: 2

    Personally, I try and compromise by only buying used CD's. This way, I can still support the little record store on the corner, and get the full and always complete CD that I want. I sometimes have to wait. Wait a very very long time (I recently bought an album I had been waiting to find used for two years) and in the meantime I listen to the downloaded version. I'm also willing to buy new CD's from labels that aren't the RIAA, but I haven't really gone looking for small, unheard of bands yet (there's still so much that I do know about already).

    I have a bit of difficulty not going for the new bargain CD's that they sell at Tower or something. While these things don't really have the price gouging argument against them directly (hell, $7.99 is a great price for a CD even by used standards) the money will go towards gouging consumers in other ways. On the other hand, if they see that people will buy more at lower prices (an obvious fact that they have failed to grasp) then maybe they will lower other CD's to these prices, not just those in catalog that have already paid forthemselves and more.

    --

    "I may not have morals, but I have standards."

    1. Re:You Don't Have To Be A Thief by homer_ca · · Score: 2

      *shameless plug*
      Overstock.com has lots of clearance CDs for $5.99-$6.99. Not the newest releases but last year's and older. RIAA can't be very happy about that price, but I just snapped up 6 CDs myself which is more than I've bought in the last 3 years combined.
      *end shameless plug*

      I'd actually be willing to pay more than that myself. $6 is even cheaper than vinyl LPs back in the day. I think one big factor is that $10 is a psychological barrier between an impulse buy and a carefully researched purchase. I'd be pretty pissed to waste $18 on a shitty CD. When they were around, Blockbuster Music had listening booths to let you try out any CD in the store. Any other places still do that?

  18. How is this wrong? by jcsehak · · Score: 2

    Okay, as I understand it, the labels, afraid that the '98 performance was gonna suck, agreed to not advertise or discount CDs of the previous 2 concerts, so as not to take away from the fanfare of the most recent one. How is this wrong? It's not even like they got together and decided to make all their CDs more expensive. And even if they did, who cares? No one has a monopoly on selling music. It would just make more people take a closer look at independent releases. Besides, I thought price-fixing was reserved for markets that dealt with necessites, like the phone company or gasoline. You don't need CDs. In fact, they're very easy to go without.

    I'm the last person to defend major labels' practices (see the RIAA song and wallpaper for proof), but I don't see anything wrong with what they did (or more accurately, didn't do). It's a free market, and they should have the right to choose whatever business model they want, no matter how crappy or unfair.

    --

    c-hack.com |
    1. Re:How is this wrong? by tunah · · Score: 2
      No one has a monopoly on selling music.

      I would make a witty comment, but the challenge has gone.

      --
      Free Java games for your phone: Tontie, Sokoban
    2. Re:How is this wrong? by Trekologer · · Score: 3, Informative

      How is this wrong?

      Price collusion is illegal. Plain and simple. The recording companies got together and decided not to reduce some older CDs so that the newer one wouldn't be competing against them for price. That is illegal. This is something that the recording companies do all the time.

    3. Re:How is this wrong? by markmoss · · Score: 2
      I think you meant "produce" not "reduce".

      The recording companies got together and decided not to [produce] some older CDs so that the newer one wouldn't be competing against them for price.

      I'm a little surprised by this ruling, since companies discontinue a cheaper older model so they can sell more of the new model all the time. E.g., DOS, Win 3.1, 95, 98, & NT. So if the fact that two companies (out of several major and many minor players in the market) agreed together to discontinue the old CD's makes it illegal, what does it mean when one company that has been legally determined to be a monopoly does the same thing?
  19. So I went to Sam Goody today by gelfling · · Score: 3, Insightful

    The average price of a CD is $19. That's right, $19. And some Phish CD's were $26. Sale items marked $17. And there is no difference whether the CD you're looking for is 14 years old or 14 days. Nineteen Bucks.

    They need to gargle sulphur in hell while their children are eaten by Rhinos. Long live musci sharing.

  20. Re:when by ceejayoz · · Score: 2

    when are all the lovely people of this world going to wake up and realize that the only way to take back from the RIAA is basically piracy

    Judging from the Napster phenomenon and the flood of P2P programs it generated, I'd say people have already discovered piracy. RIAA's still making oodles and oodles of money, though. RIAA's not going to disappear because of piracy.

  21. This is NOT what people are hoping to see by peterdaly · · Score: 2

    Two music companies that joined forces to sell recordings of the opera stars known as the Three Tenors illegally fixed prices, an administrative law judge ruled.

    This is not a huge loss for anyone involved. No real impact will come of it. It sounds to me like a small slap on the wrist for two companies selling the same product at the same price as part of an agreed upon deal. Albums like this deal probably account for less than 1% of what is available on store shelves.

    Move along...nothing to see here, or at least not what you are hoping to see.

    -Pete

  22. How About These Examples? by krmt · · Score: 5, Informative

    I have an argument against price fixing. How about CD's that cost less to make?

    Wilco's new "Yankee Hotel Foxtrot" album was recorded for some incredibly cheap sum, like a few thousand dollars. Yet it's sitting there with the same price tag at Best Buy as the huge manufactured pop albums. Add this to the fact that Wilco released the entire album on the internet themselves before the CD was released, and they've still already turned a profit on the thing.

    Another example is the new Massive Attack DVD compilation of music videos. If you've seen this thing in stores, it's basically a clear plastic case with a boring looking DVD inside. That's it. No artwork or inserts. Nothing. The reason for this is that Massive wanted to keep the costs for the buyer as low as possible (they're giving profits to charity). You can go their website and download the artwork for yourself (you even have three choices of which artwork you want). But what happened when they talked to retailers? The retailers said that the DVD would be marked up to the same price as all the others on the shelves, even though it cost them a hell of a lot less to buy. The details are all on Massive Attack's site (I think in a newspost from 3d, although it might be in the forums).

    Either way, there's a lot of price fixing and gouging going on, and no matter what steps are taken by the artists themselves, short of delivering the CD's directly to fans, they can't get the retail price down.

    --

    "I may not have morals, but I have standards."

    1. Re:How About These Examples? by elflord · · Score: 2
      Wilco's new "Yankee Hotel Foxtrot" album was recorded for some incredibly cheap sum, like a few thousand dollars. Yet it's sitting there with the same price tag at Best Buy as the huge manufactured pop albums.

      There are other costs. For example, the employees at the record shop need to eat. In any case, this example is a long way from "proof" that record companies are colluding to keep prices high. Your other example just shows that the record shops are getting greedy. There could be some ominous agreement between other record companies and the record stores to keep prices of competing albums high, but one needs to make an argument to that effect.

    2. Re:How About These Examples? by moncyb · · Score: 3, Interesting

      ...short of delivering the CD's directly to fans...

      Maybe that's what CDBaby is for?

    3. Re:How About These Examples? by FatRatBastard · · Score: 2

      Notice I said This is no arguement for proof of price fix

      I didn't say that there was no price fixing. The fact that CDs are uniformly the same price (as compared to the book industry where there's a lot more variability) I think is good proof.

      My only beef was the "CDs are cheaper to make, therefor it proves price fixing." That is fundamentally wrong. The price of production is only a small fraction of the cost of bringing an album to market.

  23. Relation to lawsuits by these companies? by iabervon · · Score: 2

    It's not terribly significant by itself, but it's great ammunition for the next time they sue anyone for copyright infringement, though...

    "Your honor, the group of companies suing us has been convicted of conspiracy. That court put on them a cease and desist order which they are violating by bringing this suit. We're filing a countersuit, and move to dismiss their suit."

    Saying that your opponents are preventing you from illegal price fixing is a little tricky.

    Of course, these days the MPAA is much more of a problem than the RIAA, which seems to have largely killed their market.

    1. Re:Relation to lawsuits by these companies? by iabervon · · Score: 2

      But copyright infringement suits aren't cases of stealing, under the law. That wouldn't make sense, because then the goal of the plaintiffs would be to get their property back. It's hardly a theft case if the prosecution presents, as evidence, the fact that the defendants offered to give back the goods for free.

      In these cases, they don't want their property back, they want money. How much money? An illegally large amount. Of course, the amount of money as sort of a vague "damages" thing, anyway, which makes it extra difficult to figure out: they say they lost $X, but they were setting prices illegally, so they deserved to lose some amount which may be less or may be more than $X.

  24. Advertisement by Anonymous Coward · · Score: 2, Funny

    1 computer - $999
    1 CD burner - $50
    1 pair of headphones - $15
    1 Portable mp3 player - $199

    Ripping off the record companies - Priceless

    for everything else, there's gnutella

  25. So, let me get this straight by dh003i · · Score: 2

    So, the same companies that are lecturing us about how immoral it is to trade music, are price-fixing?

    Yea, fuck that.

    Fuck their moral bullshit.

    Fuck their intellectual property.

    Fuck them.

  26. Price fixing? by Black+Parrot · · Score: 2, Funny


    What did they do, charge us the price for four tenors?

    --
    Sheesh, evil *and* a jerk. -- Jade
  27. Comment removed by account_deleted · · Score: 2

    Comment removed based on user account deletion

  28. This really is significant by quintessent · · Score: 2

    Ok, enough with the 3 tenors jokes.

    This is important because it gives the FTC a rock solid example of the kind price fixing scheme that is going on throughout the industry.

    A few years ago, an FTC investigation found that the industry had set up contracts that prevented retailers from advertising CDs below a certain price level. Without competition, the price of CDs was kept artificially high.

    To anyone who has been to a record store lately, it is obvious that whatever was done to correct this has made no difference. Prices continue to float upward, while the cost of making CDs goes down.

    Meanwhile, the RIAA has poured money into campaign funds, buying votes to help them continue their abuse. Now every time I buy a CD to back up my data, I pay a tax to the artists^h^h^h^h^h^h^h record companies. The more we get disgusted and boycott them, the more statistics they claim to have showing they need more government protection.

  29. Re:Imagine that. by JamesOfTheDesert · · Score: 2
    Content is more important than packaging.

    Welcome to the 21st century: Packaging is content.

    Besides, if you don't think enough of your opinions that you can't take the time to express them well, then why should anybody else care about them? As a practical matter, with so may comments to read, if a post doesn't make a salient point up front, then I'll use some heuristics to see if it is worth reading all the way through. Sloppy spelling and poor grammar tend to indicate that the poster didn't take any time formulating a message.

    --

    Java is the blue pill
    Choose the red pill
  30. Re:when by fluxrad · · Score: 2

    You should pirate recordings regardless of whether you want to listen to them.

    I doubt you could convince anyone that Rosa Parks should also have tried to sit at the back of a bus destined for somewhere she wasn't going.

    You should decide how to publicize your illegal actions, whether as a vocal public figure or through anonymous PR statements.

    I don't agree with you that publicity is a mandatory component of rebellion. My goal is not to be the sole proprietor of change, but more simply to put a little less in to the coffers of the RIAA.

    You should decide how you're going to compensate the artists, musicians, producers, record companies and others responsible for making the recording.

    LOL. I thought not compensating these people was the point. Of course, before you jump to any conclusions, I believe they should be compensated, but to a much more limited extent than they currently are. The amount of money that the artist gets from the purchase of a single CD has already been discusses times too numerous to count.

    They all deserve compensation and saying "I'll go catch the live act" doesn't cut it.

    Yes! Yes it does! Doing this is the same as giving the money directly to the artist rather than the label! Granted, a large portion of the profits from the till are still going to the venue, the security team, etc. But this is where the musician makes their money. Arguing differently is just playing devil's advocate.

    You may make a claim that what you're doing is trying to fight the RIAA but most anyone with mp3s of songs or CDs which they never purchased are simply cheapskates who deserve to be punished.

    You are certainly entitled to your opinion.

    You may feel the companies in the RIAA are overcharging you but have you seriously looked into the economics of it? Have you tried to determine their costs, as well as their risks (which are large) and figured out how much of a share in the profits you would want if you were risking hundreds of thousands of dollars on unknown artists?

    Yes, I have looked into the economics of it! I wouldn't be trying to fuck over the RIAA if I didn't wholeheartedly believe they were trying to do the very same to me.

    Odds are you're just like most pirates, trying to justify yourself and your propensity to steal music by saying "They're bad, so I can be bad."

    That's quite a sneaky argument, so let me break it down very simply:

    1. I do not have a propensity to steal music. I do it because I believe the government will fail us in regulating the RIAA's "collusive monopoly", not because I have a compulsion to do so.

    2. They are bad, that is why I am bad.

    --
    "It is seldom that liberty of any kind is lost all at once." -David Hume
  31. Is the USA becoming a Communist state? by NewtonsLaw · · Score: 5, Interesting

    I thought that one of the things America prided itself on was that it was a perfect example of capitalism in action -- individuals and companies that succeed on their merits and markets where consumers benefit by fair and open competition.

    Oh dear, how things are changing.

    Now we have a few key players in a few industries (RIAA, MPAA) bribing the government to introduce *state-enforced* controls over markets and competition.

    The rights that previously protected US citizens from the excesses and over zealous actions of large corporations are gradually being eroded as things such as "fair use" under copyright law is completely wiped by legislation such as the DMCA.

    What's more, it becomes patently obvious that when industries such as the RIAA and MPAA conspire to defeat the principles of capitalism and free-market competition, the government seems interested only in slapping wrists on the one hand while handing them more power (via the DMCA) on the other.

    Shouldn't citizens be asking -- why are we allowing big business to buy-off the government?

    And, above all else, citizens should remember that governments are elected to SERVE and REPRESENT *all* citizens, not just those with big wallets.

    Go talk to your elected representitive and tell him he's not getting your vote unless he shapes up and restores the USA to its former caplitalist glory!

  32. Re:The fact that tapes are half the price by elflord · · Score: 2
    IS and argument for proof of price fixing.

    No it isn't. All that tells you is that selling tapes is not a viable business in its own right (meaning, if a record company stopped selling CDs and only sold tapes, they would not last very long). The reason that record companies can keep a relatively unprofitable tape selling business alive is that there is a substantial overlap in the costs of producing the tape and the costs of producing the CD.

    AS well as the cd "single" that costs a hell of a lot less then the cd, and still has the same massive hype and advertising attached.

    Again, you've already spent the money on the hype and marketting before you produce the single. The marginal cost of releasing it is relatively low. You don't have to pay those marketting costs more than once, you know.

  33. Nothing will change from this case. by robkill · · Score: 4, Interesting
    The previous price-fixing case was more damaging than this one (at least at first glance on this one.) Since a record company has a monopoly on a given CD in the U.S. due to mechanical reproduction copyright, they can charge what they want to the resellers. The RIAA line on digital copyright is that they are holding out for the true value of the copyrighted content. That will be their argument here as well.


    What we need is to support more artists who are on their own label (Ani DiFranco, Christine Lavin, etc.) or who are on independent labels. The artists don't get shafted, and we get music at a better price.


    I'd like to see more artists take stands like Tom Petty did. His "Hard Promises" album (back in the LP days) was going to be retailed at $9.98, while he wanted it retailed at $8.98. If it was going to be sold at $9.98, he was going to call it "The $8.98 album". The record company caved, and hence the title "Hard Promises."

    --
    DMCA - Chilling free speech since 1998.
  34. Laugh While You Can, Monkey Boys by serutan · · Score: 2

    The music industry is certainly a wacky bunch of madcap zanies. It pains me that eventually they and their kind are pretty much going to OWN your computer, everything you put on it, and your right to put anything on it that they don't own. We lived through a golden age (the 90's), but it's end is near.

    1. Re:Laugh While You Can, Monkey Boys by PhreakOfTime · · Score: 2, Insightful

      I can almost read the words right out of Lawerence lessig's books. But Im afraid your dismal prophecy is not going to come true. If we(and by that I mean the general public) are abandoning the media of the prepackaged CD...then what makes you think anyone would sit idly by and have the music industry OWN their PC, even in an incremental way? It wont happen, and the VCR ended up not being the end of the world either. Perhaps you need to learn how the electronics of the whole thing works before you make such statements...or at least make someone elses statements...in the end its still PEOPLE who make the designs for these products, and PEOPLE will just make other 'devices' if they dont like the ones they are presented with

  35. It's Not Just The Record Companies by krmt · · Score: 5, Insightful

    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.

    --

    "I may not have morals, but I have standards."

    1. Re:It's Not Just The Record Companies by elflord · · Score: 2, Insightful
      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.

      There could be a lot of reasons why you don't get a price reduction. For example, a more uniform pricing scheme entails less administration costs. I'm not proposing this as a reason, but simply pointing out that it's not at all obvious that retailers will pass savings on to customers product for product. For example, if large record companies that produce large lines of low cost recordings, they are cheaper on the shelves (for example, some record labels sell jazz recordings at about $10 or so). In the case where savings on an isolated recording aren't passed on, I'd put it down to laziness on the part of the record store.

    2. Re:It's Not Just The Record Companies by Triv · · Score: 2

      Yes, I understand that record shop employees need to eat...

      Record sales clerks make nothing. I was one. You can have the most extensive musical education in the world, they'll still pay you nothing. Last time I checked, Tower Records paid minimum wage (5.25 an hour) and Virgin Megastore paid 7-ish. Keep in mind this is in New York City, where the cost of living is so ridiculously high it's impossible to survive on minimum wage. for instance: minimum wage at 40 hours/week after taxes is about 672 bucks a week. The absolute cheapest I've seen for a room in the outer boroughs is 300ish. Plus utilities, phone, and transport.

      I'm not arguing with you or anything, I'm just saying that since there're so many college kids in the city they can afford to pay nothing because there'll always be someone else lookin' for work.Paying employees isn't at all where their money's going.

      Triv

  36. Anyone see a pattern here? by frovingslosh · · Score: 3

    It's just like Micro$oft; get caught, even loose a trial, and as your "punishment" you promise not to do it again. Then, of course, it's business as usual. I've lost track of how many times M$ has done this. Pretty much the entire record industry, as their punishment two years ago when they were caught in predatory practices, agreed to stop doing what they were doing, which was going to lead to lower prices. See how much they have come down?

    --
    I'm an American. I love this country and the freedoms that we used to have.
  37. Re:Denying responsibility by Hadean · · Score: 2

    It's common knowledge that things that are advertised more - pushed down our throats - sell more then ones that aren't. Why do the music companies feel that Britney, N*Sync, etc. deserve more advertising then others? It may not be a gun - people still have a choice - but when knowledge of choice is limited, what do you expect to happen?

    Honestly, if - for a short test period - every artist had the same amount of advertising and special offers/rebates - i.e. none - who would honestly sell more? Britney? Maybe at first, but I'd be of the opinion that it wouldn't last long.

  38. Comment removed by account_deleted · · Score: 2

    Comment removed based on user account deletion

  39. Re:The fact that tapes are half the price by elflord · · Score: 2, Insightful
    If record companies did not make a profit selling tapes, they would either raise the price of tapes or stop selling them. Duh!

    It's not that simple. Do you understand the difference between total costs and marginal costs ? Let me explain in more detail:

    Suppose that selling CDs have the following costs:

    • Recording the music
    • Promoting the band
    • Administrative overhead associated with distribution
    • Artwork and packaging
    • Pressing CDs and purchasing blank distribution media

    The costs of selling tapes are:

    • Recording the music
    • Promoting the band
    • Administrative overhead associated with distribution
    • Artwork and packaging
    • Copying the tapes and acquiring blank distribution media

    Notice that the overlap here is considerable-- in particular, by the time you pay the costs for selling CDs, you've paid nearly all the costs for tapes.. So, supposing that you have a profitable CD business up and running. Then to add a supplementary tape business, you don't need to pay the total costs of the tape operation. You only need to pay for the marginal costs (in other words, you don't need to pay to record the music opr promote the band, because you did that when you set up the CD operation).

    So it's entirely plausible that the expected revenue from selling tapes exceeds the marginal costs of adding a tape operation to a CD operation (which is what the record companies pay), but doe NOT exceed the total cost of running the tape operation.

    If the price of the media is unimportant, why are CDs MORE expensive than tapes?

    The assumption that the price of the media determines the selling price is false. Tapes are cheap because no-one would buy them if they were more expensive (because they offer less utility to the buyer)

    Of course, they got greedy, and never lowered the price.

    You've done no estimates of prices vs inflation, so you're not in any position to even make that claim. My guess is that prices are approximately flat, and the reason is that the bulk of the costs are directly correlated with the price of living.

    I can get CDs for ~$5.00. And you know what? The record clubs MAKE MONEY selling them at that price!

    You're a smart buyer -- good for you. The fact that you can get them cheaply through this venue shows that the high prices are not a result of the record companies greed, but rather, that of an inefficient distribution model. By spending your money on someone with a low overhead distribution model than traditional retail outlets, you get a better deal.

  40. Re:Only for the 3 tenors world cup live concert cd by innocent_white_lamb · · Score: 2, Informative

    not sure how they enforced with the retailers;

    It's my understanding that they enforce this through their co-op advertising programs. "If you sell your product at $x, then we will pay y% of your cost of advertising. If you discount your product, then we won't pay anything."

    This can be a pretty big stick when you're working on a small margin and have a large advertising requirement.

    At least, this is what I've read in the past...

    --
    If you're a zombie and you know it, bite your friend!
  41. Public Enemy et. al. by cant_get_a_good_nick · · Score: 4, Informative

    I can't steal from my old comment, Slashcode doesn't get that far back, the bastards, now I have to write with a few beers in me....

    PE had a couple new tracks, and a lot of remixes, and they wnted to put it out. They called it Bring the Noise 2000, named after their track Bring the Noise which permanently changed the direction of hip-hop/rap. Def Jam (their label) didn't want to. So PE released it as MP3s on the net, the label gave them hella shit. I actually have a copy of that before they pulled it from the web (thank you GeoCities).

    After this, PE left Def Jam (I think Def Scam was their wording) and put out an album called There's a Poison Going On, after they split from Def Jam/Columbia. They sold it from AtomicPop.com for $8 downloads, $10 if you bought the actual physical album, and that came with an autographed CD liner from Chuck D (I bought it to get the autograph). AtomicPop later imploded unfortunately, and I then see the exact same album at Virgin Megastore for $18.

    Did Virgin give Chuck and Flava Flav an extra $10 per album? (They didn't sell autographed ones, so compare to $8-9 or so.) I doubt it. I'm pretty sure the price bump was just to get it in their normal, non-sale price structure, and give R. Branson a couple extra bucks. Many artists have fought with the industry to get a what they consider normal price. I think Tom Petty actually released an album named 8.99 (or something like it) to stop the labels from boosting the price past that. The way the labels structure it, groups get cash from touring, not from record/CD sales, so groups have little incentive to sell a lot.

    Count how many elements a tape has:
    You have two plastic half-shells, two reels each with a plastic piece to hold on to the tape, the tape itself which has the tape, an oxide layer deposited on it, and two leader segments added to it, the metal and spongy piece to force good tape-head contact, and possibly astenerws (though the cheaper tapes just snap on). Contrast this with CD, with only one part, nothing moving. And the CD costs more? Ummmmmm....

  42. Nope by r2ravens · · Score: 2

    They will 'own my computer' when they pry it out of my cold, dead hands.

    And they will prevent me from keeping my own data when my neurons no longer fire (see 'cold, dead hands' reference above).

    --
    War is Peace. Freedom is Slavery. Ignorance is Strength. - George Orwell or George Bush?
  43. Not communist, more like caplitalist by oliverthered · · Score: 2

    It looks like capatilism is just reaching it's inevitable climax, where by the market is controled by large multinationals, who buy up evrything in sight. that's what happens when you have 100 years or so of capatilism.

    communist is (by the dictionary)
    "A economic system characterized by the collective ownership of property."
    or by the english dictionary
    "social system based on public ownership of most property"
    Nope-thats not wIt looks like capatilism is just reaching it's inevitable climax, where by the market is controled by large multinationals, who buy up evrything in sight. that's what happens when you have 100 years or so of capatilism.

    communist is (by the dictionary)
    "A economic system characterized by the collective ownership of property."
    or by the english dictionary
    "social system based on public ownership of most property"
    Nope-thats not what the RIAA want!!!

    capitalism(by the dictionary)
    "An economic system based on private ownership of capital."

    That's the baby,
    Looks like ameriica is becomming full-cycle capitalist.hat the RIAA want!!!

    capitalism(by the dictionary)
    "An economic system based on private ownership of capital."

    That's the baby,
    Looks like america is becomming full-cycle capitalist.

    --
    thank God the internet isn't a human right.
  44. The Ruling Record Companies by JabbaKosh · · Score: 2, Funny

    "the record industry is indeed a oligopoly" How ironic then, that they will be responsible for creating their own oligopsony. B-) (thanks to www.investorwords.com....) "These cornflakes need more Tabasco."

  45. Re:Defending the Record Companies in some Ways by VAXman · · Score: 2

    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.

    Sony Music makes something like $50 million dollars a year in profit. Not sure if that is 'typical' for the big music company, but that is absolute peanut shells compared to oil companies, software companies, semiconductor companies, tobacco companies, etc., who generally net about 100-400x that per year. In short, the music industry is tiny and not even in the same ballpark as the industries generally considered to be lucrative.

  46. $5.00 words by Mulletproof · · Score: 2

    oligopoly: a market situation in which each of a few producers affects but does not control the market

    While you get credit for employing an obscure, seldom used word, price fixing implies a certain (read "large" in this case) amount of control, which the record companies do wield. They do more than simply affect the market. Since Vivendi Universal and Warner Communications had exclusive control of the Three Tenors recording in question, maybe you should have stuck to the good old fasioned word

    monopoly: 1 : exclusive ownership through legal privilege, command of supply, or concerted action 2 : exclusive possession or control 3 : a commodity controlled by one party 4 : one that has a monopoly

    ~sigh~ A fool and his big words are soon parted.

    --
    You need a FREE iPod Nano
  47. Re:The fact that tapes are half the price by Grab · · Score: 2

    CDs are more expensive bcos the public will pay more for them. Simple as that. In the US, you pay typically $10-15 for a CD. In the UK, we pay £10-15 for the same CD. Why? bcos the companies have found that raising the price doesn't majorly affect sales, so they're busy using supply and demand. Tapes are shitty quality, so no-one's prepared to pay as much for them. But it actually costs more to produce a tape (compare the prices of blank tapes vs CD-Rs). The companies still make money on tapes though, so they're not bothered.

    The absolute *best* solution would have been for Napster to have totally cratered record company sales. Seriously. Without pain in their pockets, why should they give a damn? They don't care if you complain while you're buying that CD, so long as you do actually buy it! But if you didn't buy it bcos it was too expensive, and everyone else stayed away too, *then* they start thinking on it...

    I'm lucky - I mainly like blues, folk and classic rock. I can pick up a CD I'd like for £5 in a bargain bin. Maybe it's 10 years old, but it's still good music, know what I mean? And there's so much stuff I liked on the radio but never got round to buying back then bcos it was expensive, well now I can! :-) If you listen to Metallica and Led Zeppelin instead of Eminem and Linkin Park, your high-priced CD-buying days are just gone, man!

    Grab.

  48. Re:The corporations, not the government by silentbozo · · Score: 2

    You joke about this now...

  49. Payola by bill_mcgonigle · · Score: 2

    The record companies don't have that much influence on who becomes a star or not when all is said and done, they just have the ability to put it on the shelves and see who buys what.

    Payola

    --
    My God, it's Full of Source!
    OUTSIDE_IP=$(dig +short my.ip @outsideip.net)