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British Record Companies Win £41m In Damages
Benjamin Fox writes "The BBC is reporting that online retailer CD-Wow has been ordered to pay £41m to the British Phonographic Industry. The London High Court ruled that Hong Kong-based CD-Wow, which imports cheap (but genuine) CDs from Hong Kong and elsewhere into the U.K., is '"in substantial breach" of a 2004 agreement to stop importing CDs.' This is a serious blow to proponents of an open, no-barrier music market."
Record companies win 41m damages
Which they will, naturally, turn over to the artists...
FTA: "It is vital that all retailers compete on a level playing field," said director general Kim Bayley. "Illegal imports threaten that level playing field and threaten British jobs."
Cry me a river, think of your jobs as being "outsourced" to Hong Kong. Your brick & mortar record stores are going the way of the haberdashery and cooper workshop. Be creative and come up with a new business model or go extinct.
Being in business for X years doesn't give you a mystical right to be in business for X+1.
Trolling is a art,
The part about someone putting a gun to the head of CD-Wow and forcing them to sign that agreement.
From TFA:
"The vibrancy of British music depends on a fair return on the investments that allow British talent to shine.
"This decision is an important step in ensuring that British music has a bright future."
So my question is... Why are the cd's being sold at such low prices in places like Hong Kong, where this company is buying them for resale in England. How are the artists getting a fair return selling their albums for such low prices in Hong Kong?
Regards.
If this Internet company is based in Hong Kong, how does British law apply exactly?
In theory, theory always works in practice. In practice, theory rarely works. <><
Does this mean that IBM, HP, GE and others owe billions to American engineers when they imported cheap (but genuine) foreign workers into the country?
And it would be extremely dangerous if an Englishman and a Chinaman could pay the same amount for the same product.
What would be next? Where would it end? What if petrol prices also reached parity? It just wouldn't be proper!
How does breaking an agreement the company made in 2004 to stop importing CDs drive a "serious blow" to an open, no-barrier music market? The company agreed to stop importing CDs in the first place; they should either renegotiate the agreement or abide by it.
Teh Brits affecting the accounts of a Hong Kong based business eh... What Would Hong Kong Phoeey Do?
Infiltrated dot Net
True it will hurt the local market, but that's the price you pay for a free market. Not agreeing with it, but it's the reality of the new world.
The agreement was in response to the threat of a lawsuit.
It should be a clear warning sign when it's cheaper to manufacture a CD, and ship it half-way around the world, than it is to manufacture it right where you live.
One place has too much red-tape and taxes, or one place has too few standards and protections, but in this case I think it's both.
Here comes that British Pornographic Institute again.
their annual UK TURNOVER in 2005 was only £21.7m. This judgement effectively means that the high court wants them to hand over at least 5 years UK profits. It would be a damn-sight cheaper for CD-Wow to just pull out of the British market. Also, it's clear that the BPI's plan here was to get such unreasonably large damages that CD-Wow has to hike its prices right up around the world to cover the cost of paying them, thus destroying their business of selling CDs cheap. UK customers already pay a £2 surcharge at CD-Wow to cover the cost of sourcing CD's in the EU, now the high court has deigned to make consumers the world over pay a surcharge to give pure profit to a few already wealthy corporations. So, either the company goes under, or they stop trading in the UK, or they massively hike the prices. Either way it's bad for many UK consumers. Well done the high court, always looking out for the majority of people in society!
Hopefully the EU will strike this effective tariff-imposing down - people may lambast them, but the EU seems to be the only thing protecting us from the jokers in Westminster who make laws to benefit corporate interests over those of consumers.
FGD 135
Who thought it said
"The BBC is reporting that online retailer CD-Wow has been ordered to pay £41m to the British Pornographic Industry."
and had to go back for a double take?
Does the phonograph industry really think they have a chance against the CD industry?
IOU one (1) signature
A couple more points:
Artists should have known the deal with mechanical copyright and planned accordingly. Why are we rewarding failure?
What does a music website have to do with porn?
"The vibrancy of British music depends on a fair return on the investments that allow British talent to shine."
That's the funniest line in the whole article.
Does that mean without money, talent won't shine? If you're doing the shining, can the money be in sterling, euros, or dollars? Can you get some shine with the yen?
I guess it doesn't matter anyway. Now that the record companies can get a fair return, the talent will shine brighter than ever. I can see the shine from here.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
OK... According to the article, CD-Wow sells 'top 10 albums for as little as £6.99', and the basic ideas behind economics lead me to assume that they acually profit from such low prices.
For them to profit from that, it leads me to assume that it's cheaper to produce a (legit) CD in Hong Kong, and fly it to the other side of the eastern hemisphere, then to simply buy the same CD in a store in the UK.
So why does the same album cost so much more in the UK then it does in Hong Kong?
Maybe the answer isn't to sue people. Maybe it's time for them to re-evaluate their business models.
What is preventing CD-wow from creating a new corporation, selling its assets to the new corporation, and then withdrawing the original corporation from the UK market? Wouldn't that be a way of getting around the payment since the new corp would not be a signatory to the original agreement, and CD-wow could not be forced to pay if they are no longer doing business in the country?
"A Hong Kong CD Reseller has been found to be in breach of contract, by violating an agreement it made with British record companies in 2004. It agreed to certain restraints on its trade practices in exchange for financial consideration but did not abide by the terms of its contract. In football news, the Manchester..."
Doesn't really sell into Your Rights Online, does it?
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Can they pay the fine with imported CDs, marked up to the cost of comperable local CD prices?
I Am My Own Worst Enemy
Isn't this why the movie industry placed region codes on DVDs? Now it doesn't seem to matter that the music industry was so short-sighted when developing CDs, they're going to get their money anyway.
Which is all well and good, except CD-Wow aren't sourcing CDs in the EU, which is why this judgement has gone against them. They promised to be good last time, and weren't - the evidence of my own eyes tells me this, given that the most recent Scissor Sisters and Macy Gray records both came with Malaysian certificates of authenticity. This isn't some minor oversight of one or two CDs as they claim - they were shipped major releases sourced from Malaysia...
Whether they should have the right to do so is another matter, of course.
My guess would be because, due to wage/currency/other differences between the two locations, the average cost of a CD would be lower in order for it to sell at all. This is not really all that unusual. Even as a Canadian, when I went to a "Denny's" (no Denny's jokes, please) in the US, the prices on the menu were the same. However, the difference in the dollar meant that the meal cost me 25% more.
Similarly, 1GBP= 1.98119 USD = 15.4949 HKD. If I were to go to Hong Kong and buy a CD, it might still cost me 15-20 dollars (as a guess), but those are Hong Kong dollars, and when converted to foreign currency might be respectively a lot less than the same item in another country. That would resolve to under 1 GBP, and about $2 US.
If you were to try and sell the CD for the converted value of local currency, that could be anywhere from 100-140HKD. I'm guessing that nobody would pay that for a CD in HK, so in order to make any sales at all, it resolves into the local pricing and market.
Not that I'm giving lattitude to the actions of the UK labels. How many of those same labels *produce* the stamped discs and various other merchandise in cheap Chinese factories, to their own profit? It seems fair game that somebody could sell the same CD's back and make a profit from the cheaper foreign-market value.
Easy.
I would guess the agreement came about under pressure of copyrights.
Copyrights are monopoly rights. No Open or Free Market in those goods.
all the best,
drew
FreeMusicPush If you want to see more Free Music made, listen to Free
Globalization: GOOD if large corporation$ gain.
Globalization: EVIL if large corporation$ lose.
It's the new law.
That settlement only applies to Microsoft software vouchers. Microsoft are... erm... special ... or something...?
the one against drug re-importation. The drug companies have to make their R&D money back from someone, so people in wealthy nations cannot have the product at the same prices as everyone else.
Doesn't change the fact that while living in this wealthier nation many the people I know cannot afford proper health care or buy the medications at all.
I'm not trying to be bitchy with you. I am just frustrated with the realities of globalization.
Regards.
Not to mention those dirt cheap CDs appear to be around $11.00 still :(
:/
;)
How much do CD cost nowdays?
If $10 profit can't pay everyone down the chain we need a shorter chain...
Maybe all bands should put their music on video so we can get it in the bargain DVD bin instead
Thank god i have all the music i will ever need to listen to already on Cd/record/cass/8-track. I have paid retail for 1 CD in many years and that was off ebay for a 10-year-old out of print one. OK, plus a DVD of the month thingie for The Midnight Special (70's version of MTV) at full retail
This is the perfect definition of 'globalisation'. If you're a producer of a product, you get to take advantage of the lowest possible production costs wherever they may be found in the world in order to maximise your profits.
If you're a consumer of that same product, then you're fucked and have to pay whatever the producer decrees is the market price in your country. Even if that price is many multiples of the exact same product in another country (cf: Adobe software prices in the UK compared to the US, to name but one example).
I'm still waiting to hear an even vaguely plausible reason why record companies charge vastly more for a music CD, a piece of plastic and metal on which the largest production expenses - the actual recording and artists' advances - have already been paid, in the UK than to buy that same CD from Hong Kong including shipping halfway around the world other than sheer, unashamed, blatant, greedy price-gouging of British consumers. And I'll be waiting a long time, because there isn't one.
You must think in Russian.
This way they can maintain several "level playing fields" instead of one leveled playing field. At the moment, several level playing fields are what they are attempting to maintain. Now, I know what you're thinking... price fixing right? Controlling the prices in several markets. I'm pretty sure the wisdom of the courts have already accounted for that and went on to disregard it.
Now with video DVDs, there's a thing called "region coding" that will permit only appropriate players to play DVDs of the appropriate region. This mechanism properly allows the DVD consortium to maintain several markets and to price each item based upon which market they are selling in. If audio CDs had such a mechanism, this problem would be moot.
There you have it... free trade UK style: reduce trade barriers for big businesses, but don't reduce barriers in a way that might actually lower prices for the general public.
Laws, regulations, etc. forcing people to buy only domestic goods at domestic prices are fine - perfectly fine... AS LONG AS there are laws, regulations, etc. forcing companies selling those domestic products to produce them domestically. If not, then the law is an assault on the people.
I'm really sick and tired of the hypocrisy. When we lose our jobs to cheaper workers overseas, big business tells us that it's unfortunate but it's the harsh realities of the international business etc. Yet when that same market threatens them, the government steps in to protect them.
If I was British I'd be calling for a replacement of the government over this. Whose interests are the government protecting with a decision like this? Clearly not the people themselves, who are one of the most overcharged (look at the cost of a PS3, for example) populace on this planet.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
Can they pay the fine with imported CDs, marked up to the cost of comperable local CD prices?
No, they have to use comparable priced DVDs. Or HD-DVDs.
-- Tigger warning: This post may contain tiggers! --
And everything to do with protectionism. It is indeed the political favouring of the producer over the poor.
Deleted
Sorry, Asian American only if living in the US. As the Chinamen in question are in Hong Kong, please use East-Asian-Pacific-Islander.
Likewise Englishman is outdated. The correct term is Northern European Imperialist.
cheers
Sure, it might be a larger factor, but that would only be important if you define a hypothetical base, which there may be. But the clear deciding factor is the total span between the two, the disparity between the two, that causes uncontrolable and sometimes undesirable methods of equalizing.
In general, I can see the issue here that's kicked CD Wow in the pants. It's a real shame though, as I've previously dealt with the company and they were really rather nice. I started a music and arts festival in a town (Reading) nearby to their head office and one of my co-organisers knew their Managing Director. A few of the guys involved went to see them regarding sponsorship. With a simple pitch and an agreement to link to their site from ours and put their logo on flyers (which gave us more credibility, as well as advertising) they chipped in enough to fund the whole festival for one year, with some left over and an agreement to consider further, more extensive funding the following year. We're talking thousands of pounds rather than hundreds.
Every dealing we had with them was brilliant, they sent through the money with no fuss and were responsible for allowing us to put on and effectively publicise over 100 events over the course of a week. That included music, theatre, comedy, children's workshops and public circus displays.
Conversely, when we approached HMV they refused to even allow our programmes in their store and told us to fuck off. Virgin allowed us to put flyers and posters all over their stores, but mainly because we knew the assistant manager.
Real shame that this might be the end of such a nice company...
--- Band: Joey Ultra
Except that British and English are not the same. Try going into a bar in Scotland or Wales and telling everybody in a loud voice how it's great to come and visit England....
Come on now, no need to flame & fight. It looks like you mostly repeated what I said but used words specific to your culture. Pound, pence, labour, & knoweledge.
It's ok for us to disagree on what each of us considers too much red-tape. But I'm going to challenge you to do better than make statements like "the pound is so strong" when it appears you're parroting a sound-bite instead of examining and accepting the underlying economics.
Shouldn't the British Phonographic Industry be investigated for price fixing? As has been mentioned, the CDs are legally produced and the artists have already been paid their share, leaving the only reason the BPI are pissed off is that they didn't make a larger cut of the sale.
To do something right, you often have to roll up your sleeves and get busy.
Yep, supply and demand can be odd sometimes. The other day at a store, I saw a movie (on DVD) for $17.98 and on the same aisle was the music soundtrack (on CD) for 18.99. How does the musical audio for the movie cost more than the entire movie?!
I'm sure this is flawed thinking, but oh well:
If you want protection from parallel imports/greymarket sales, then you should be forced to develop your products from scratch in the country in which you're expecting protection.
e.g., if you benefit from cheaper production in China, the customers should be able to expect cheaper sales via China/HK. If you want to kill off parallel imports in CountryX, then research, design and handle production for your product entirely in Country.
'Thats they exact same thing a banana wrench monkey.'
Interestingly, in Australia the court system has found on several occasions to date that "grey importing" (unofficial importing) is legal and in fact (as sony found out: http://games.slashdot.org/article.pl?sid=05/10/06/ 1211211) circumvention of devices which prevent grey importing (e.g mod chips which get around region encoding) is also legal.
It's interesting/scary how countries seem to go in virtually completely different directions on some of these issues (and in this case it is the UK and Australia which have inherited the same legal system).
Once the customer base start failing you, make use of your lawyer base.
Beware: In C++, your friends can see your privates!
What's been particularly interesting/scary is the complete lack of "mainstream" journalism on this subject. I watched a section on BBC Newsnight which totally failed to address any of the issues that even the most unkarma Slashdot troll would have raised. The mouthpiece from the BPI was given free-reign.
This is very disappointing because it means we are not getting our message through to the mainstream.
Rich
libguestfs - tools for accessing and modifying virtual machine disk images
> The London High Court ruled that Hong Kong-based CD-Wow
This prompts the question, what we're they high on when they made the ruling? Maybe they'll ban multi-region DVD players for an encore. Those silly wigs must be overheating their brains.
The problem with globalisation is that large companies can now have their cake and eat it too! The get to pick and choose where in the world they set up manufacturing based on cost, and then get to dictate pricing regimes for individual markets... The copyright laws in our countries have been bastardised to such a point that a company still has a say in what happens with their products AFTER they've been sold to the consumer. A company should not have the power to dictate to me or anyone else who I sell their product to AFTER I've legitimately purchased it from them. Besides that, if I'm from Australia and I'm in Hong Kong and I buy a CD in the Hong Kong marketplace WTF shouldn't I be allowed to play it in my own home is Aus? Why are we (as a population) so ignorant and impotent that we allow a handful of governments and corporations to implement these types of controls ??
By your way of thinking, bank robbery or raiding Fort Knox would be an acceptable business plan, I take it.
Infuriate left and right
I hope consumer protection groups will appeal this judgement.
It's really simple: if corporations can buy, manufacture their goods whereever source material, production labour is the cheapest, consumers should have the equialent right to buy anywhere globally for the best price.
Anything else is unfair.
This is sick. I don't understand why these companies think that market segmentation helps their business or why courts and governments agree with them on it. I simply can't fathom what went through their minds to develop region coding for DVDs and legally enforce this kind of separation.
grey wolf
LET FORTRAN DIE!
Here in Australia, they removed all parallel import restrictions on CDs and record stores didn't go out of business. Stores like JB Hi Fi, Sanity and others are still doing a roaring trade.
If the same thing happened in the UK and all the UK record stores were on the same level playing field (and could import stuff from Hong Kong just like CD-WOW does), this wouldn't be an issue.
These CD-Wow folks should really be embarrassed. Not only did they lose but they lost to the British Phonographic Industry, whose name is the ultimate in anachronistic throwbacks. However, while those Phonographic guys may not be in tune with the technological times as far as their name goes, they more than made up for that by hiring a bunch of lawyers who obviously were quite up to date when it came to winning a high profile, very lucrative case. In light of all this, and the resultant financial pain it's going to cause them, maybe CD-Wow should change its name to the more apt CD-Ouch.
Not CD Wow.
If I live in the UK and order something from overseas, I am officially the importer.
I have to pay the relevant import duties and taxes when the goods arrive. In this case, as you will notice from the text quoted from CD Wow's site, the duties are paid on my behalf by the shipping agent, out of the payment made to CD Wow. But in essence, it is still me, as the importer, who is paying the duties albeit through an agent.
The company selling the stuff to me is the exporter.
Beef.
nothing to see here.
and fly it to the other side of the eastern hemisphere
But, my goodness, if you live due West of Greenwich, then it gets damn expensive.
Way back when, British Leyland aka Rover was a Great UK Car Company. This is before it finally exhausted subsidies and went bust. In those days, to keep it in business, the Government permitted a cartel which fixed prices at levels where BL could more or less break even. This was at levels about 40% higher than in Europe. Everyone in Britain paid far more than the world price for cars, just as they do now for CDs. To benefit BL, just as now to benefit the record companies.
So guess what? BL then exported their cars to Germany, and sold them below cost. Doubtless in pursuit of the Queen's Awards for Export. Enterprising people with a crazed desire to buy cars guaranteed to rust and break down then tried to import them back into the UK.... After all, if you were going to buy a pile of junk, why pay list for it? That's not quite how they thought of it.
The more it goes around, the more it comes around.
I hear the cross-dressers in Hong Kong are quite good... umm wait...nm.
Prices for *everything* in the UK are outrageously higher than in continental Europe, USA and even Mexico. But I guess the main reason for that is because the government let corporations do these kind of things. It is so stupid that they do it *even* against their own companies. For another example see the Tesco vs Levi where Tesco (a Wal*Mart like supermarket) was importing Levi's jeans cheaper than the price they got from Levi's... guess what happened? Levi's sued and they where forced to buy directly from Levi's... at the highest price.
But hey, the guys over here are used to that, if you tell a Briton that they are getting raped with the prices they will have a *hard* time acknowledging it, they do not believe it as most of them have not traveled outside their island... and when they go to Spain they are surprised *how cheap* is it... they should look all around the world to see *how cheap* is everywhere, excepting of course their island.
Ubuntu is an African word meaning 'I can't configure Debian'
So you're saying this money they receive is going to the artists? Or the record companies?
Sounds like double speak to me. To put it more crudely, this is "bullshit".
$GlobalCorp that was paying me a good wage can outsource my job to India, Serbia, South Africa, etc.
Check.
I then have to get another job, possibly in another field.
Check.
Most jobs being created in the US and UK economies are service industry jobs where I have few applicable qualifications so I will most likely take a serious pay cut.
Check.
Because I now have a lot less disposable income, if I want to maintain my previous quality of life I need to look to other sources for products. I can't afford HMV or Virgin prices of GBP15 for a new CD anymore. Imports from overseas may be one solution to this. After all, it's exactly what $GlobalCorp did in step 1 - saved money by sourcing their product (my labour in this case) from a cheaper market.
Nope - can't do that.
AFAIK this is explicitly against the WTO agreements on price differentiation in different markets and the prevention of people from taking advantage of this. This is why the BPI have to use shady trademark laws (see Levi vs Tesco for more on this).
Time to make this shit personal and stop being sheeple!
As long as they're still screening soaps, you'll never rally the masses.
> why does the same album cost so much more in the
> UK then it does in Hong Kong?
^^^^
THEN is temporal;
THAN is comparative.
The E isn't even near the A on a QWERTY keyboard.
The words don't even sound alike.
Why did you do it?
I'm sorry...but the first time I read that, I thought it said Pornographic...
As our way of thanking you for your positive contributions to Slashdot, you are eligible to disable Slashdot 2.0.
> The London High Court ruled that Hong Kong-based CD-Wow,
"You socialist cowards gave us back to a freakin' communist dictatorship , then seek to sue us in court now?
How ya gonna enforce it...punk? Come on (pushes UK's shoulder). What ya gonna do? When it came time to stand up for freedom, you slunk your tail down and ran away. Oh, what ya gonna do?
Oh, look. He's gonna cry. Come on now, cry. Cry, baby. Cry. Wahhhh! (Pops his nose, making him bleed and cry harder.) Waaaaah!"
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
British industry is suffering because the strong pound make British exports expensive (we will have less tourists visiting the UK this year, the psichological point in which one pays $2.00 for a pound is weighing heavily on British industry).
IANAL but write like a drunk one.
ANd they should not treat us as potentail thieves, we are their costumers, and what the costumers are saying by droves is that they want music without DRM on demand.
Yes, people want the ease of use and convineince of P2P sharing networks, and yes, they may not want to pay for it.
The challenge is for the labels to square that circle, suing anybody with ears and a fucntioning auditory system is not a bussiness model, is a protection racket.
IANAL but write like a drunk one.
You were doing so well and then, blam! You start to talk about things you don't know, and it shows. Badly.
In the XXth century orchestras playing classical music got *bigger*, not smaller. The demands of the likes of Stravinsky, Prokofiev, Shostakovich, Mahler and many ohers (and here, I mean many, if you don't know them is not our fault).
Several important composers like Vivaldi were revived from literally nowhere thanks to recored music.
In the XXth century we had our Beethovens, Mozarts and Bachs. They were called Shostakovich, Prokofiev and Stravinsky (pretty much that would be their equivalent roles in classical music: the experimentalist, the one that consolidates a movement and the pioneer) and many others.
If you wanted to talk about dead professions related to music you should have tried other things, I don't know, trovateurs or viola da gamba players, but your example is so catastrophically stupid that it hurts. Classical music perfromances and composition are alive and well to this day, most towns in civilized countries will have at least one decent orchestra which in many ocassions pulls more people to concerts tha a professsional sports team does to matches.
IANAL but write like a drunk one.
The artists are being ripped off now by the labels. This has been amply documented and you can o adn find this information if you care to do so.
In your "fast forward" pseudo-exercise I don't see any elelments of abuse from the guy running the servers, if anything the abusive ones would be the artists he has helped, the thing we can rescue from your crappy writting is that the guy with the computer and the artists are in a more equitative position in regards to each other.
Nowadays the artists are screwed over and over and yet some more (even the biog names that actually make some money, the immense majority make no money at all from recordings), while the labels get richer and richer irrespective of the luck or lack therof of their numbers.
IANAL but write like a drunk one.
I do regularly. The more the merrier.
IANAL but write like a drunk one.
I didn't write this article!
I never thought I'd see another "Benjamin Fox" on slashdot..