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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.
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
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!
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.
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."
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!
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."