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UK Music Industry Stomps on Imported CD Seller
MungoBBQ writes "The Independent is one among the many news sources reporting that BPI, the British equivalent of RIAA, has made a large online retailer of CDs, DVDs and games, comply with their demands to raise prices by 2 pounds per CD sold on their website. The retailer, CD-WOW, based in Hong-Kong, agreed to raise their prices offered to their UK customers to avoid legal battles. CD-WOW caters to many other European countries, where people have been enjoying their cheaper CD prices. However, it can now be assumed that other national recording industry organizations will make CD-WOW and other online retailers jack up their prices to 'better compare' with the local prices in each country."
Bloke: "I am really enjoying this CD I saved 2 quid on!"
BPI Barrister: "Stop that! Stop that right now! You're not supposed to be enjoying or saving on anything, and where is the rain? Bloody hell, can't we have some respectable english weather?!?"
Actually, I do buy books from the UK on occasion because they have better covers on the Terry Pratchett books and some things you just can't get in the USA (Meijers/Costco mentality, lots of what you oughta like at prices you can't refuse, but less variety all the time, because variety is meant to be a luxury and should be expensive or denied to peasants just for good measure.)
A feeling of having made the same mistake before: Deja Foobar
Or did they cover that already?
Sure, charge 'em 2 pounds more, then offer a 2 pound instant savings for customers in the UK.
F the BPI and the RIAA.
Cruising the internet on my TI-99/4A @ a whopping 300 baud!
Well done to the BPI for giving those who download music for free yet more reason to not feel guilty. Truly a great day for record companies..
Blaming GW Bush for the Iraq war is like blaming Ronald McDonald for the poor quality of food.
The nature of what's happened is bad, but it also makes sense. Being in Hong Kong, CD-WOW doesn't strictly have to play by the UK's rules and can, in theory, charge whatever they want for the media they are selling. It's the basis of free enterprise, which Hong Kong is sometimes good about. (And to the consternation of the MPAA, sometimes all too good about.)
So, CD-WOW could, in theory, ignore BPI. BPI, in turn, can make life very very difficult for them through the use of repeated lawsuits (which may fail, but will cost money to defend against), through harassment of people buying their services, and through the use of the same tactics the RIAA employs here against people who don't obtain music how they want you to obtain it.
It's difficult to fight a legal battle, even one you can win, against an opponent who has the resources of the government to draw on. CD-WOW is probably just protecting their interests by rolling with the punches. Hopefully it'll hurt their sales less than fighting with BPI would hurt their bottom line.
How about they LOWER their prices to COMPETE with CD-WOW? Isn't that what economics teaches us? WTF PEOPLE!
If the cost of shipping around the world doesn't offset the price charged, then I see no reason why any organization should be allowed to demand a price change. Surely the cost of shipping that CD isn't small. Under the "globalization" of the economy, if you can't produce it locally for a reasonable price, people will import it.
Why is it that only corporations are supposed to benefit from globalization?
Sig under construction since 1998.
When your product is available on a global basis through illicit channels at near-zero cost, and innovative retailers try to bring their prices down in order to attempt to win back legitimate customers, force them to raise prices artificially and drive customers away.
Way to go, BPI!
Ceci n'est pas une signature
I just love the "free market" ideologues who suddenly want government intervention when someone manages to effectively compete with them. They have no problem shipping jobs to India to get the best prices, but dammit consumers shouldn't be allowed to SHOP in India to get the best prices! They should be forced to pay our prices and conform to our marketing plans so we can make more money!
this is getting old and so are you
blog
Don't worry. Because, as we all know, the Free Market will always end up providing the best solution for everybody, where consumers can choose the best product at the best price and everything sorts itself out, magically, until we're all rich and free and happy. Or something.
Honestly, though; first DVD regionalisation, then this. Yeah, maybe the free market would be a good idea, if it actually existed.
What people refer to as the "free market" currently is better described as a global welfare state for fat guys in suits.
evil math within Nature's Cubic Creation!
We're not acknowledging that we were in the wrong, but simply that the risk-reward ratio of spending months in court wasn't right for us.
And there you have it, the real thought behind every business decision.
--
In London? Need a Physics Tutor?
American Weblog in London
I'm not getting ripped off anymore. I tell everyone I know to do the same, for all the usual reasons, as I've been doing since I started to get informed on these greedy leeches. But if people wanna keep getting screwed, and the artists don't demand better conditions, I don't feel bad or angry anymore. Only justified in my newfound (albeit limited) apathy.
---rhad, who is a little cynical today
Slashdot needs to interview Natalie Portman.
COntact their local authority complaining about price gauging from the part of the EU.
Let China raise a complaint in the WTO.
Small companies, and individuals should try top leverage the weight of their goverments in this kind of disputes, specially when clearly the BPI is in the wrong (UK people should not the dissatisfaction with them and perhaps with the corresponding branch of the goverment. This stinks of monopolistic behaviour).
IANAL but write like a drunk one.
If I understand what phaze3000 is saying, why the hell should people feel that downloading music for free is wrong when the legal system allows a large institution like BPI/**AA to *force* (read "bully") legit cd retailers into anti-competitive price rises. Anyone agree ?
$ strings FTP.EXE | grep Copyright
@(#) Copyright (c) 1983 The Regents of the University of California.
CD-Wow probably pissed off the BPI because they have a section "Unsigned - as yet" which sells CDs from as-yet-unknown bands, which doesn't make any money for the big labels. [Gratuitous plug - look at 'Bridgefield' in this section - they're friends of mine, and think CD-Wow are great for giving them a chance to get better known].
Phil
Personally, I think this extra two pounds we have to pay is theft. How do they justify it? This is cartel price fixing.
How many millions are the music industry going to rob off UK customers as a result of this action?
The music industry are theiving b******s, which is why they are so obsessed with telling everyone that it's the public that are the thieves.
CD-Wow's business model was to sell CDs to the UK market. A typical price for a chart CD in the UK is 15.. 12 if you shop around, 10 if you get one of the special offers from a discount shop such as (my favourite) Fopp.
CD-Wow was able to undercut these prices to (typically) 8, by importing from Hong Kong or mainland Europe, depending on the product.
The BPI have alleged that importing from outside the EU is illegal, and decided to prosecute CD-Wow.
CD-Wow decided to settle out of court, despite maintaining that they were in the right. This is not unusual: small companies can't afford months or years in court. Their agreement was to cease importing from Hong Kong, and only import from the EU.
My understanding is that their agreement with the BPI is *not* to hike prices by 2 -- their agreement is to only import from the EU, and CD-Wow have stated that this will increase their costs by 2, which will be passed on to the customer.
I think this could hurt CD-Wow quite badly. At 8, this was the cheapest place a Brit could get new CDs (i.e. recent releases). There's a bricks and mortar music shop on my local high street where I can buy the very latest releases for 10, and have luxuries like browsing the packaging, having the product immediately, eyeing up the hot shop assistant, etc.
Erm, sorry about that last bit.
What the agreement (that avoided a court case) stated was that CD-Wow would source products that they are selling in the EU from within the EU, not from elsewhere (eg, Asia).
Unfortunately, because manufacturers charge more for the EU versions of their CDs (or, to put it another way, because they aren't discounted as much as CDs intended for Asian consumers) this means that CD-Wow will have to pay more for its stock in future. To reflect that increased cost, CD-Wow is putting up the prices of its CDs by 2 pounds.
The reason for this is that (ridiculously) buying goods from cheaper sources outside the EU without the permission of the vendor is illegal. Other companies, such as Levi Strauss, have taken supermarkets and other discount retailers to court over grey (non-EU sourced) imports in the past, so CD-Wow would almost have certainly lost the court case that was avoided. Clearly, this is one law that EU consumers would love to see changed.
Other online vendors who the BPI believes are selling grey imports in the UK are also being considered for legal action. These include Amazon.co.uk (which is based in the UK) and Play.com (which is based in the Channel Islands).
Why the crackdown? Well, I'm sure the BPI is being pressurised by traditional retailers complaining about losing sales to etailers undercutting them at every opportunity. It's not a coincidence that since the likes of CD-Wow, Play.com, etc appeared the average cost of an album in the UK has dropped to 10 pounds. And it's also not a coincidence that cheaper CDs (on the high street and online) led to a 30 percent rise in UK album sales last year.
As a regular CD-Wow customer, I'm disappointed by the BPI's stance, the agreement and and the law that forced it, but I'll continue to shop at CD-Wow because, for the most part, they'll still be cheaper than many of the alternatives. Not only that, but they somehow manage to ship from Hong Kong to the UK faster than most their rivals shipping from one part of the UK to another! Their customer services are friendly and helpful too.
Hopefully the consumer-hostile legislation that led to this agreement will soon be repealed. When that day comes, I'm sure CD-Wow will drop its prices again.
"Accept that some days you are the pigeon, and some days you are the statue." - David Brent, Wernham Hogg
There are lots of morons in suits that think this bit of news is a good thing. However, the smart ones will think just about the same as the /. crowd. This is a huge admission of weakness by the UK music industry. Sure its easy to crush some dotcom, but they've just raised a huge flag that will attract attention from those not so easily intimidated. The legal basis for the threatened action against CD-Wow is thin at best. Amazon or someone else who can afford the legal bickering can now swoop in and do exactly what CD-Wow is backing off of.
This is, IMHO, another example of the record company's desperation. Cooler heads would have ignored CD-Wow. Realistically, how much could an HK based dotcom change the UK market? Not much in my estimation. But by taking this action, the BPI suggests to retailers that they might be able to get a leg up by importing CDs. The BPI just fucked its members. I hope they are enjoying their "victory" today. A few more like this will kill them.
Yes, in the US price fixing is illegal. But if you read the article, in the scope of this story, it isn't price fixing.
CD-WOW was buying their CDs from Asia, where they are cheaper, and then selling them in Europe. BPI objected to this on the grounds that CD-WOW was violating their copyrights by not buying the CDs from Europe. Rather than fight a long legal battle over copyright issues, CD-WOW decided it would be easier to simply buy the CDs sold to Europeans in Europe than to fight it out. The price increase is due to increased costs for CD-WOW, not due to BPI insisting on them raising prices.
Yes, we all know that there is price fixing involved in CD sales, and that is what this *really* is about, but the actual case that was going to go to court was one of copyright infringement. CD-WOW was selling CDs for 9 pounds. You'd have to sell a huge number of CDs at that price to pay for lawyers to defend you against music industry lawsuits.
This is what gets my blood boiling about corporations today.
"Well, this guy in India/China/Mexico is willing to work for less than you. Can't compete with those wages? Oh, too bad!"
Compare to:
"Well, this CD costs much less in India/China/Mexico. We can't compete with those prices. STOP! THIEF! SUE! BLOODY MURDER!!!!"
"The market alone cannot provide sufficient constraints on corporation's penchant to cause harm." -- Joel Bakan
In 1995, the music industry decided to combat price wars in CD sales by setting MAP (minimum advertised prices). Within 6 months, CD sales flattened and began to fall, a did not recover until Napster, MP3 players, etc, revived the industry. The music industry attempts to control the consumer like no other industry, and as a result has missed out on the growth that similar industries have seen, such as Movies and video games. They pay for placement on the radio, pay for placement on store shelves, pay to create videos that they likely pay to have MTV play (all 10 that get played in a 24 hour period). And then they bitch that it cost too much money to create, and thats why they are losing money selling 50 cents worth of metalized plastic for $20.
You are in a maze of twisted little posts, all alike.
We really do get bent over by everybody when it comes to our cash.
:), I smoke and drink alcohol, both of which are heavily taxed so I probably wind up paying about $100 a week on the tax on those, then I've got road tax, council tax, x tay, y tax and z tax, and to top it all off I pay V.A.T on everything I buy - that's 17.5 percent added on *after* taxes, shit we even pay VAT on delivery when we buy our [overpriced] stuff.
:D
Looking at my own economic situation (I'll convert prices to dollars
In a regular week with no cash spent on toys, I probably pay about $200 on sales taxes, my wages are even better, with upward of $700 getting taken off my wages every week.
that's close to $1000 a week I pay the government, I'm really curious as to what the fuck the government does with all that money.
Now I'm going to be taxed up the ass for, uhh... well, going by the article, *nothing at all* - it's just some greedy assholes who want money for doing zero.
I used to buy CDs, not any more, I refuse to piss away any more money on money-grabbing fucking middlemen without the skills or talent to produce something worthwhile on their own. I'll support the artists I like by going to their concerts, buying stuff off their sites, or even just *giving them cash* ffs. The music industry is a total farce and I think I've been a total dumbass for continuing to support it financially all this time.
No more CDs for me, not until the industry is fixed.
And seriously, would it kill the government to *not* take so much money from us?
BPI release statement on CDWOW!
and just in case you might start using your brain and realise the isn't a good thing:
Music Buyers Enjoy Lower Than Ever Prices
Their contact details are:
BPI
Riverside Building
County Hall
Westminster Bridge Road
London SE1 7JA
Tel: 020 7803 1300 (+44 instead of the leading 0 if you are outside the UK)
Fax: 020 7803 1310 (+44 instead of the leading 0 if you are outside the UK)
Email: general@bpi.co.uk
A pizza of radius z and thickness a has a volume of pi z z a
It doesn't take a college education or anything more than the old saw of "two wrongs don't make a right" to shoot down the obvious flaw in your reasoning.
Two wrongs can most certainly make a right.
If someone is attempting to kill you and your family (a wrong), you are certainly justified in killing them (a second wrong), resulting in the survival of you and your family (a right).
In this case, the recording companies have been screwing artists and engaging in anti-competative trade practices like the one outlined in this article (a plethora of wrongs). If file swappers can put the recording companies out of business by illegally downloading music (another wrong), then a new mechanism for artists to reach their fans will have to emerge. It is very unlikely such a mechanism will be any worse for the artist than what currently exists, and a strong liklihood it will in fact be much better (this would be a "right").
All of that having been said, I really wish people didn't trade files illegally. P2P technology is IMHO critical to the future of the internet in terms of scalability. The internet itself is fundamentally P2P in its design, and when it comes to downloading Linux ISOs, or legitimate, free media (home movies, machinima animations, popular slashdot stories) having a P2P infrastructure in place will be invaluable. Every illegal download puts amunition in the guns of those who would ban such technologies and change the Internet from a fundamentally P2P medium, where we are all equally empowered to server content as well as consume it, to a top down glorified shopping network/cable channel.
And that is a disservice to all of us who value our freedom of expression.
So, ironically, while I disagree with your reasoning, I share your desire for this illegal file trading to stop, so that the rest of us don't have our rights and ability to trade files legally crippled and perhaps one day even revoked altogether ("trusted computing," "palladiium", super-DMCA, SCO-Law, etc. ad nauseum).
The Future of Human Evolution: Autonomy