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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."
they've been fixing prices for how long? and it took till now for a suit like this to win.. let's hope it's not the last.
MABASPLOOM!
I know that seems like an awful lot of money, but does it even approach the amount the industry gained through its unfair practices?
Try not. Do or do not, there is no try.
-- Dr. Spock, stardate 2822-3.
Do I get any part of that amount?
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.
s200.org - visit it (me), love it (me).
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?
"Quoting famous computer scientists out of context is the root of all evil (or at least most of it) in programming." - K
Let's write a law to make it legal to hack* RIAA lawyers when we suspect them of "pirating" our money.
* hack meaning to chop into little pieces
Isn't this the amount they spend on promoting N*suck during the superbowl? They will just regain the cost of the fine when I pay the $21.99 for the new Brittany cd anyways!
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.
The five largest music companies and three of the USA's largest music retailers agreed Monday to pay $67.4 million and distribute $75.7 million in CDs to public and non-profit groups to settle...
75 million in CDs? So what's that buy nowadays, 20, 30 CDs?
Finally, someone figured out that:
1) Cost to profuce cd's is probably less than $1/CD including case and linear notes, excluding production costs.
2)The cost of CD's, with everyone making substantial profit could be $3.50
3)The only way for the prices to be so artificially high was for price fixing.
I know I would buy more music if it came at a reasonable price.
Maybe someone in the software industry will realize that: more people will buy this if we only charge $20 for it!
Help I'm a rock.
I would expect their next move would be to work a bit faster with MS, and get DRM pushed out there. While looking through Windows Update, I noticed Windows MediaPlayer v7.1 has DRM - and you can't uncheck the box for it. If you want Media Player 7.1+, you have no choice but to install the DRM portion along with it, or not install the player at all. Perhaps MP v7.1 is non-reversable - once you install it, you can't downgrade. I dont know if that is the case, but I'm not particularly in the mood to be a guinea pig, at the moment.
Someone you trust is one of us.
"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...
"Mod, mod, mod...and another troll bites the dust."
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 where do I pick up my compensation check for getting screwed over for all these years?
GoatPigSheep, the 3 most important food groups
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?
(\(\
(^.^)
(")")
*beware the cute-bunny virus
Yeah right. When hell... hey wait a minute - massive climatic change? Maybe there is hope...
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.
...where?
The music industry has been ripping us off (no news there) to the tune of $5 per CD.
The have to pay up $67 mil + $75 mil to non-profit, etc.
Who the hell gets that $67 mil? I want my cut!
~50 CD's over the last few years....where is my $250?
You should send a letter to the RIAA, and explain about this. They probably have never heard about the possibility of P2P helping sales.
;^)
Of course, when the cops arrest you for admitting to music piracy remember, IANAL.
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 would at first blush seem perfectly reasonable, until one notices that one United States dollar buys about $1.58 Canadian. That's right--CD's are typically about 50% more costly as soon as you go from Windsor to Detroit.
Granted, I've noted a similar pricing trend with some other goods--groceries come to mind. But for non-perishables, the price disjoint is quite stunning.
Is it price fixing? Or plain old-fashioned gouging? All I know is that for a ten-cent piece of plastic, that's quite a markup. Charge what the market will bear, and hope nobody notices that the neighbours are getting a 30+% discount. Does anybody know if there are any retailers taking advantage of this price difference? Buy Canadian, sell American, pocket the difference. (Whatever you do, don't write a post containing the phrase "3. Profit!!!")
~Idarubicin
This article does not mention piracy or file-sharing.
Reuters should be commended for not confusing the issues.
________________
All my sig are fjdklafjkldafjkldafdaklf
The lawsuit that the recording companies settled is only not the whole story. The Attorneys General of a bunch of states sued them in civil court because they violated anti-trust law (allegedly). The Attorneys General, or the Federal Government could also have filed criminal charges against the record companies but they chose to file a civil lawsuit, presumably because it is much easier to win. In criminal proceedings, the defendant has to be proven guilty 'beyond a reasonable doubt.' To prevail in civil court, the standard is 'more likely than not.' It is the difference between being 51% sure they are guilty and being 99% sure.
While the record companies refused to admit fault with words, they did it with dollars. You don't settle a lawsuit for that much money unless you are pretty sure that you will be found liable at trial. If they were really settling for the 'nuisance value' of the lawsuits, the amount would have been much lower. Think of this settlement as plea bargaining for guilty corporations--"We won't fight the the punishment as long as we don't have to say 'we're guilty' out loud."
The other shoe, or boot, that is waiting to fall is private class action litigation. If someone robs you, the government can prosecute or sue them. But as a victim, you also have a right to sue. (Alas, you don't have a right to start a criminal prosecution--under US law--but you can, like the family of O.J.'s wife, sue in civil court.)
There was at least one private class action lawsuit filed against these record companies for price fixing in 1996. The last I saw (1997), it was still kicking around the courts. In dollar terms, private class action suits can easily exceed the damages they'll pay to settle the government's case.
The other damage the industry faces is that this settlement, while not technically an admission of guilt, is tantamount to it in the court of public opinion. The industry has been shown to be bigger pirates than Napster--they've been ripping off ALL of their customers.
They will deserve their fate, which they have earned by continuing to treat their customers and talent with contempt.
Columbia house will offer you a dead :)
All kidding aside though, it really isn't a suprise at all. Have you ever seen a CD cheaper than the same thing on a tape? It costs them under a penny to produce a CD in under a second while it costs bundles to mass produce tapes. If tapes and cds were the same price, i wouldn't say anything. If tapes were 50 cents more than a cd, i wouldn't say anything, but when you charge more for something that costs less to produce just because of its superior quality some will say its 'whatever the market will bear', while others call it price fixing.
P2P is awesome, nothing will be done to stop it. What is File and Print Sharring or running an FTP server if not P2P? P2P will hopefully take enough money away from the record industry that we will be able to go from
a: choosing an $18 CD from the 200 or so artists that have been played on the radio/mtv in the past year
to
b: choosing a $5 CD from 5,000 artists who make equally good music but don't lip sync too well N'Suck or have a face good enough to paste on top of porn star bodies and post all over the internet Britney or can play awesome live shows but don't have hollywood making million dollar videos for their lame music Lincoln Park.
Hopefully we will get more variety and less MTV / Hollywood bullshit in our music.
I'm just waiting for a similar lawsuit to follow for Hollywood charging ridiculous prices for DVDs just because they contain footage that wasn't good enough to make it in the actual film....Tell ya what, how about I pay $20 for the DVD without any extra crap, and if i feel the urge to hear it in Pakastani or want to watch some deleted scenes, i'll come back and buy the other half for another 10 bux.
I'm just rambling, its late...But as far as the music industry goes,its right up there in the list of things that have power which shouldn't...Microsft/MTV/AOL/Bush goodnight bedtime
What if Celine's latest album is crap?
That kind of question is a priori.
Buying a Dell computer is equivalent to dropping the soap in a prison shower.
According to this, there is also $75M in CDs to be given away to non-profits.
Sorry to reply to my own post, but I have made a serious error in my calculations - I forgot to include the artists' royalties that they'll have to pay. So, instead of $1,114,000.00 cost to the record industry, make that $1,114,003.65. My apologies for the oversight.
Sigs are bad for your health.
Shoot the lawyer twice.
That kinda makes $67 million a fortune or what? Why didn't they fine them at least $500 million? If the fine is lower than the overcharging, seriously, why should they care?
Not Buzzword 2.0 compliant. Please speak english.
...we also paid for them to shut down Napster.
Ok, this is pretty sketchy, but this study seems to show that CD sales are highly price elastic in Macedonia (yeah, I know, but this is the best I could find in 10 seconds of Googling). The page is excruciatingly slow to load, so here's the relevant data (prices in denars):
Price Quantity
>250 71
250 103
200 159
180 243
120 360
100 463
80 690
Of course, there are a bunch of things that could explain this (unpopular CDs priced higher to account for the lack of economies of scale, price increases as inventory dwindles, etc.) but it's kinda interesting anyway.
OK, so the RIAA owes me. They can subtract all the music I have "pirated" from the bill. I bet they still owe me money.
My beliefs do not require that you agree with them.