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."

Comments

Cry me a river.

[grub]

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.

Re:Cry me a river.

[joe_adk]

It always bugs me when things like this happen. Businesses can outsource their labor and production, but we can't outsource our merchants.

Re:Cry me a river.

[Atario]

"It's not free trade when you do it."

Re:Cry me a river.

[turbidostato]

"Okay, let's flash forward to the future and see how that works out."

It's awesome how anybody wants to "flash forward" to a future that neither knows nor can make their arguments strong with when they can look at a past that can be known for sure.

I don't know how the future will look like, but I know there have been dozens of undisputable bussiness that just were flooded away by the waves of time and technology and noone misses them now (carriage builders; horse traders; water or ice street sellers; wandering surgeons and dentists; pedlars... I could go all day long), so I don't see how it could be any different with any current profession or bussiness model that today seems to be strongly stablished.

"My long-winded point being that record companies, however corrupt they may be, are a necessary evil of the world."

They are needed no more than people selling ice on the streets, and in fact much less. Till the beginning of the XX century you had that kind of music... you know, about forty minutes per piece instead of three, up to one hundred musicians on the scenario instead of a quartet, almost no singing superstars, but chores on the dozens when one of those pieces required them... They got some names, like Vivaldi, Mozart, Wagner... That industry was simply killed once the phonographic industry "saw the light" -they were able to get vast ammounts of money with what was no more than promotional media when firstly introduced, making use of professionals that needed much lower expertise levels and that were mostly marketing-driven instead of proficiency-based, so they were easily "created" out of a marketing lab. Well, they managed to have almost obscene benefits for almost a century out of it, but their time has passed and we will miss all those new rock star bands that won't be no more than our current symphonic composers that are no more.

Even in the worst case scenario where all current music standards just disappear, do you really miss the Bachs, Behetovens or Mozarts that have not been in the twenty century because the bussiness model pushed by RIAA asociates worked against them? I don't think so: when you want that kind of music you just go with Bach, Behetoven or Mozart canned or live perfomances and that's all. Then, if there're no more Led Zeppelin, The Beatles or Britney Spears, because technology or market trends go everywhere else, so what? You still will be able to listen to them if you really want it, for free, out of the Net just saying -maybe, oh, how great old days that passed away, just like when you find yourself playing with an air sword after watching -again, Excalibur.

Just remember that on a free market, really no bussiness is essential or non-reemplazable.

B.S.

[ushering05401]

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.

they call it rip-off England for a reason

[hxnwix]

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!

It should be a clear warning sign

[Nymz]

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.

some more info from TFA

[Anonymous Cowpat]

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.

Small Victory

[Smight]

Does the phonograph industry really think they have a chance against the CD industry?

Same argument as...

[ushering05401]

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.

Ah, globalisation

[payndz]

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.

Re:Ah, globalisation

[capnez]

I'm still waiting to hear an even vaguely plausible reason why record companies charge vastly more for a music CD [...] in the UK than to buy that same CD from Hong Kong including shipping halfway around the world [...]. And I'll be waiting a long time, because there isn't one.

You are right - if consumers were able to participate in the global market on the same level as multinational corporations, this would be no problem. Today, the corporations get to conduct cheap business abroad, but consumers are still hampered by tariffs, taxes, etc. The soluction is not to restrict the corporations, but to further liberate private citizens across the globe (who should be just as free to do whatever they want).
Your cynical definiton of globalization is skewed. Globalization should mean more and global freedom for everybody. For many companies and ordinary citizens, this is already a reality (in the European Union, for example). What we need to do now is to make globalization the reality for everybody. For example, this would mean that a UK citizen can buy CDs in Hong Kong or anywhere else (usually where they get them for the cheapest price).

However, in this special case we are dealing with, the company apparently broke an "agreement" (i.e., a contract) - although TFA is not very clear what exactly happend (speaking of "breaking [a] 2004 court undertaking [...]", whatever that is), and if they did that, they are lawfully punished for it.

Anyway, the course must not be more restrictions - it must be more openness and liberty for companies and citizens alike.

The Hypocrisy

[MrSteveSD]

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.

Re:If I was British

[pcardno]

The government didn't make the decision, the courts did. Yes, the government appoint judges but the decision was not made directly by them...

We have many reasons for wanting a different government - this one isn't even close to the top 10.

grey importing legal in Australia

[atmurray]

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).