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."

Comments

It's their lot in life, they're made to suffer

[ackthpt]

It's because they're selling to british and the british are meant to suffer. It's their lot. Stiff upper lip and all that!

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.)

Imports

[Godeke]

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?

Market forces

[tiled_rainbows]

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.

What CDWOW should do.

[jotaeleemeese]

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).

Clarification

[slim]

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.

The hypocrisy of big business

[GreenCrackBaby]

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!!!!"

Re:How about offering 2 pounds off to UK customers

[ePhil_One]

And this sort of behavior is exactly why the music industry is suffering so; it has little to do with P2P and other things.

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.