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Attorney General Investigates Music Price Fixing
An anonymous reader writes "The Guardian is reporting that the US Attorney General has launched an investigation into whether or not record labels are engaged in price fixing of music downloads. From the article: 'The department of justice inquiry centers on the activities of the four largest record labels: EMI, Sony BMG, Universal and Warner Music. Subpoenas are believed to have been issued to all parties, with federal officials understood to be focusing on whether the companies have been colluding to keep the price of downloads artificially high.'"
http://politics.slashdot.org/article.pl?sid=06/03/ 03/1543256
Thats because when you buy a ringtone, you in fact license it for playing it in public. When you buy a song, you license it for playing it in limited groups.
"So even for the "cheap" model of production, you're looking at $10 CDs."
Impossible.
Sony BMG has once-a-month sales where they ship CD's to your house at $6-7 per disk. Presumably when I buy a $6 CD, Sony is not losing money, so it suggests the cost is significantly lower than you calculate.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
I recently discovered for myself the used CD market on ebay.
I have currently purchased about ~50 cds. I got most for about $3 - $4 each on average including shipping. Each CD is a full album (no singles). Most have 10-15 songs on them. Many come from shops specializing in the sale of used cds...
Which means I'm paying about $0.30 per song. And to think that someone had to collect these CDs, figure out which ones were scratched, which not, advertise on ebay, put them into a box, and ship them to be via the postal mail...
Even if 25% of the CD is so scratched up that my computer can't read it, I still come out -- way ahead. And I like to think that maybe I'm helping someone [non-RIAA] out... (which may/may not be the case)
And to think that we currently have an *industry* selling electronic copies of songs for $0.99? Thery already had the digitized recording from the recording studios... Bandwidth these days is practically free. There is virtually no packaging or transportation cost. Very little human intervention is required....
So are the music companies colluding? Maybe. Or maybe they are just exploiting the dumbness of their customers... These companies are large enough to **define** the market. They don't have to answer to supply & demand. The real crime is that the public puts up with this and asks for more...
Does anyone remember how buying home VHS/DVD movies used to be expensive? $15-$20 US for a single movie? Lately, Wal-Mart has a huge crate in their electronics dept, filled with DVDs for ~$5-$7 each... (*renting* at blockbuster costs almost that much ~$4). When displayed like that, I realize how stilly this whole $$$ for IP thing really is... But when displayed neatly in nice packaging on a shelf, these videos somehow appear [to the public] to merit their price...
Some might say the $5-$7 movies are crap... Well, what are most of downloadable songs selling for $0.99 EACH??? And movies cost far far more to produce than music...
You are confusing price setting with price fixing. Most forms of price setting are legal - ultimately a manufacturer decides how much they want to charge for their product. Manufacturers cannot, however, legally dictate the final retail price (well, this is true in Australia). Of course, they can always could scuttle $0.99 downloads by refusing to sell tracks to apple under $0.99.
Price fixing is when different companies in the same industry collude to artificially set the prices of goods at a price far higher than what normal market forces would dictate. It is usually difficult to prove as you need evidence of the collusion part. In production of goods, when a competitor raises prices, you can either maintain prices, hoping to steal market share or you can cash in by raising your prices too! In the music industry, the end products are not exact matches for each other - artists are generally not marketed under different labels so you would be incredibly stupid to try to steal market share!
In many respects, selling music is the perfect encapsulation of Capitalism - "screw the customer for whatever you can!" - and as long as we keep paying what they ask, the labels will continue to do so.