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Music Industry Pays $67M Fine For Price Fixing
Krelnik writes "Reuters is reporting that the music industry is paying a $67.4 Million settlement to end a lawsuit where they were accused of artificially inflating CD prices at retail. Yeah, P2P is causing their problems. Sure, sure it is. Here's the story at Reuters UK."
I'm sure the RIAA will be quite upset at losing that less than 1% of their annual income. Poor sods. But I think if judgements continue like this, and that moronic bill for "P2P warfare" is dropped, a real dent might be made in the RIAA's empire of art commodification.
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Is it just me, or does this seem like a reallllly low amount of money for a settlement in a judgement this serious? Not to complain about the victory, but shouldn't this have much greater consequences than what ultimately boils down to a weekly paycheck for these CEO's?
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That seems like peanuts compared to how much they're ripping off the artists and us, the consumers who buy their crap.
They are just paying their way and donating CDs to certain organizations just to say drop the suit... that's it.
"This is a landmark settlement to address years of illegal price-fixing," Spitzer said in a statement. "Our agreement will provide consumers with substantial refunds
No it won't! The suit was filed two years ago. $67.4M divided over all the CDs distributed by the labels ends up being fewer than pennies per consumer. At best, I'd expect little more than a $5 coupon off my next overpriced music purchase. The settlement also doesn't do anything to address future infringement.
and result in the distribution of a wide variety of recordings for use in our schools and communities."
Not under today's Fair Use laws...
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Probably not if you're from a country where "checque" is standard spelling. From the article: "The settlement will go to all 50 states, based on population. Consumers may be able to seek compensation."
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--Winston Churchill
Let's see, consumers were overcharged $480M and the fine was $67M?
Well now we know what step two is:
Step one, rip off consumers.
Step two, settle out of court.
Step three, $413M profit!
So is this $75.7 million worth of CD donations based on the price before or after the gouging?
In seriousness, it says in the article "consumers had been overcharged by $480 million since 1997." I don't know what the other details are, but it seems that the penalty is just a slap on the wrist since it barely adds to $200 million. Isn't that half of what they gouged? They still made off with a ton of cash. Where's the hurt?
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If you are listening to Britney, I truly pity you. Try some Stravinsky, or Radiohead.......
NO this seems like an awefully small amount of money. Does 67M approach the amount they profitted off of the price fixing? It should be at least that amount, plus a punative amount.
$67M is a Joke. A single company could foot that.
They do that at my local lib. Except that it is not second hand CD's (yup, brand spanking new) and you get them for two weeks with unlimited refunds. I know a guy who went to the library, checked out the max (15 @ a time, I think) took them home, ripped them, then burned to mp3 cd. So what should they do now, sue the libraries?
.noitacidem deen uoy siht daer nac uoy fI
They were accused of using a minimum advertised pricing (MAP) policy between 1995 and 2000. In 2000 they settled an FTC lawsuit by agreeing not to use MAP for 7 years. Since then I've seen more and more new releases advertised for $11.99-12.99, but full retail price on CDs is as expensive as ever; you'll be lucky to get change out of a $20 after tax.
I like this bold prediction from the article:
"Former FTC chairman Robert Pitofsky said at the time that consumers had been overcharged by $480 million since 1997 and that CD prices would soon drop by as much as $5 a CD as a result."
So now the local indy shops that can't match the $8 a CD that the big chains can sell for will go under. They're already more expensive, but it just got pointless for them to even try.
It'll be like bookstores all over again.
This article does not mention piracy or file-sharing.
Reuters should be commended for not confusing the issues.
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No the local book shops will continue to do what they do best sell GOOD and hard to find books, focus on what the customer wants, and build lasting relationships for steady sales. Barnes and Noble or Chapters might rake in more at 33% off the cover price of bestsellers but they'll get no loyalty from their customers. And no love from the real book lovers.
The music industry is shooting itself right now. This isn't at all helping. P2p wouldn't hurt it at all if the industry would get busy and start producing better quality music. The RIAA is notorious for exaggerating their figures that they show to the general public. While the sales of records are up, they will show you the sales are down.
Plus, what's the point of paying $16 for 10 songs that of which only 2 are good.
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Come on people, realize that these states' attorneys are just padding their resumes in prep for entering the private sector. They always settle - there's never an admission of guilt. That's the game. Meanwhile, prepare to get your proctology exam from the RIAA. Their vigilante powers to enact the corporate police state are in the works. That is, unless we can all get a little more proactive in the activism department, support the EFF with letters and, yes, money. Lots of money, to the EFF and the legislators who oppose the RIAA's latest legislation. We should have a lobby as powerful as the NRA. I mean, c'mon, if a bunch of gun-totin' rednecks can control the legislative process, geeks should be able to as well. We are an order of magnitude more literate. I say, put a lot of money into it now, it could pay off in the long term. Remember, a pound of prevention.....
They will deserve their fate, which they have earned by continuing to treat their customers and talent with contempt.
Yeah, P2P is causing their problems. Sure, sure it is.
Must I continually point out that it DOESN'T MATTER if P2P loses revenue for the record companies - P2P file sharing is still (in most instances) WRONG.
I'm so sick of hearing people whine and moan about how P2P should be considered legal because the record companies don't lose money because of it (typically followed by an argument that illustrates that the industry has sold more music since filesharing that before).
I'll say it again: IT DOES NOT MATTER.
Philosophically, this is called an "appeal to a complex argument," and it's considered a logical fallacy.
Let me give a more blatent example:
Suppose you own a really nice bicycle, but you only ride it from 5-6pm. Now suppose someone from down the street comes and "borrows" your bicycle from 7:30-8:00pm, and returns it in pristine condition...you can't tell it's been used. Their borrowing of the bicycle without your permission is still WRONG. The bicycle is your property, and they used it without your permission. You could even take it a step further and say that it would still have been wrong if they left a $5 bill on the seat, because they still used it without your permission.
We, a crowd of people of whom many make their living generating intellectual property, should understand that.
Music is simply property. If you use it without the owner's permission, it's wrong.
Are they cutting off their own noses by disallowing P2P sharing? I think they are in alot of cases. But it's their noses to be cut off.
I don't see the words "for free" in that sentence, but we're not writing a contract, so let's assume that it is implied.
Want to bet that the $75.7 million is at RETAIL prices? Since it probably costs the record industry about $0.25 to manufacture and ship each CD, and assuming for argument's sake a retail price of $16.99, it's really more like a total cost to the record industry of [$75.7 million / $16.99 retail * $0.25] ~= $1.114 million ~= a single record company exec's annual entertainment budget. Furthermore, they'll probably use production overruns and be able to write some of the costs off.
Sigs are bad for your health.
Can anyone spot the similarity between M$ proposing their crapware as part of a settlement and this mob offering $75 million worth of CD's?
Would such CD's count as sales for the next Brainless Spears or N'Stink they are trying to push to the top?
That may be, but the problem with class action suits is that they are almost always brought in order to benefit the lawyers. It's rare indeed that the actual plaintiffs in such suits gain anything significant from them. Often the plaintiffs end up with a settlement that represents less than what they lost at the hands of the defendant. But the settlement amount is usually large enough that the lawyers representing the plaintiffs make enough to retire to a life of complete luxury.
Remember: the lawyers representing you in a class action lawsuit don't work for you: they work for themselves, and are just using you as a tool to gain for themselves insane amounts of money.
What that means in this case is that if the RIAA offers to settle early for $100 million, the lawyers will probably take the deal, because their cut will be something like 30% of that, and $30 million for a small group of lawyers is a lot of money if the amount of time it represents is small. They know that if they don't take the deal, the RIAA has the resources to drag the case out for decades if need be, so they'll take the deal. And the RIAA is thus still ahead a cool $300 million.
If there's another boot to fall, it'll be something other than a class action lawsuit. And if you want an idea of the likely long-term outcome, just look at the tobacco companies and how much they were "hurt" in the end (hint: not much) by the class action lawsuits.
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They already lost a similar lawsuit in the early 90's.
It resulted in a 3 dollar increase in CD prices.
I wish I had a link to a historical reference to the previous lawsuit. I have plenty of faith that CDs will now cost nearly $25 apiece, esspecially as DRM starts to make a strong foothold in the marketplace.
"Everything you know is wrong. (And stupid.)"
Moderation Totals: Wrong=2, Stupid=3, Total=5.
...we also paid for them to shut down Napster.
Eventually, if everyone pitches in, you can "check out" whatever music you want to explore. If you like it, then buy it at the store and support the Artist. If you don't, rip it (in case you change your mind and decide you like it ;)