News
DOJ investigating digital music price fixing
Following a similar investigation by New York Attorney General Eliot Spitzer, the Department of Justice is now investigating the major music labels for possible anti-competitive pricing of digital music downloads.
“One music industry source said that some subpoenas may have been issued already in connection with the probe, while other labels had been tipped off that subpoenas would likely be coming in the next few days,” reports Reuters. “The two music industry sources said Thursday the DOJ’s probe appeared to be focused on the same issues—whether the labels colluded to set wholesale pricing for song downloads. The investigation also could be related to licensing renegotiations with Apple, maker of the wildly popular iPod digital music player, for its iTunes music store.”
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1
Oh, great. Just what we need, Elliot Spitzer and his continued preelection campaigning brand of vigialante “justice”. Don’t get me wrong, I am no music label fan, but Spitzer is a psycopath ever trolling for high profile populist “enemies” to beat up on, whether they are deserving or not.
Hate insurance companies? Call Elliot Spitzer. Hate stock firms? Call Spitzer. Are music labels the current public bad guys? Call Spitzer, he’ll trash ‘em.
Posted by Obadiah on March 3, 2006 at 1:54 PM (PDT)
2
Well, finally someone can figure out why it’s cheaper to buy a newly release CD at Best Buy, Circuit City, or Wal-Mart than online. I’m gonna guess and say it costs more to manufacture and distribute CDs than place music files on a webstore.
Posted by kdogg on March 3, 2006 at 2:45 PM (PDT)
3
It’s not just Spitzer; ALL state attorney generals are doing this. You can call it vigilantism, but what it really is a captive corporate cash cow. They really aren’t interested in consumer justice per se; they’re interested in corporate payouts under the guise of consumer justice. It scores brownie points with the constituency under this smokescreen, and benefits the respective state’s general fund as the money is siphoned from some token ‘magical’ reimbursement plan that not surprisingly is rarely implemented with any degree of seriousness by the states.
It’s happened in the past (as with the tobacco settlement), and it’ll continue to happen again and again when tax revenues in many states unable to cover bloated government costs. Corporations, especially those based in other states, will be continue to be the target of aggressive state AGs as long as they can smell the money.
As for CD cost vs. download cost; I don’t think that’s the crux of the investigation, but the record companies are fully justified in giving their loyal B&M retailers a better deal if they so choose. Besides, usually the cheapo price is only for an intro special or startup artist…the labels can offer cheap prices if they want to promote these releases, and can support the flagging CD sales of their traditional B&M retailers at the same time, particularly if they’re GUARANTEED that the retailer will buy a certain bulk quantity of CDs from them. With online download sales, there’s no such guarantee; each download from iTMS or Rhapsody is made and tallied one purchase at a time.
Posted by flatline response on March 3, 2006 at 8:01 PM (PDT)
4
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Posted by UL56fmr31F on March 4, 2006 at 3:04 AM (PDT)
5
flatline response -
You nailed it.
Posted by Obadiah on March 4, 2006 at 4:11 PM (PDT)