U.S. Investigating Online Music Pricing

An anonymous reader writes "Times Online has a story about the U.S. Federal Government investigating whether the music labels are fixing prices for online music sales. 'The antitrust division is looking at the possibility of anti-competitive practices in the music download industry ... Mr Jobs suggested such a move would drive owners of Apple's iPod, the hugely popular digital music player, to piracy, a problem that has cost the music industry billions in revenues in recent years.'"

clarify this paragraph:

[yagu]

From the fine article:

Mr Jobs suggested such a move [in reference (apparently) to greedy prices set by music companies] would drive owners of Apple's iPod, the hugely popular digital music player, to piracy, a problem that has cost the music industry billions in revenues in recent years.

I wonder, does Mr. Jobs actually believe this, or is this casual conjecture/repetition by the author?

Regardless, I'm still curious about and waiting for the definitve and objective study that shows real correlation, because I still don't believe it.

The biggest "cost" to the music industry over the last five years has been and continues to be their disdain for the consumer (e.g., the SONY debacle, protected "CDs") and their insistance on charging similar fees for songs even while the business model dramatically evolves (e.g., hugely cheaper distrubution channels).

Heck, if the music companies were found to be colluding by charging $15+ per CD years back (they were), what are the chances they are doing the same now when the per-tune cost remains the same as distribution costs drop?

My biggest fear though is the music industry gets "caught" and settles in similar fashion to their previous settlement, à la "giving away" free downloads (by the truckload) to local libraries, but restricting the downloads to non-selling tracks. Sigh.

Get the Message?

[AKAImBatman]

Indeed. The message seems clear enough to me: "Don't f**k with Steve Jobs."

The music industry tried to get greedy by forcing Jobs' to raise prices on music. He pushed back and told them it would kill iTunes. The music companies banded together and tried to force his hand. Now, suddenly, the justice department is interested in allegations of price fixing. Coincidence? I think not.

Fair practices require obligatory licensing.

[Errandboy of Doom]

If you want to stop anti-competitive practices, digital distribution needs to adopt the rules of radio:

Download services should have the right to sell any digital recording now, and compensate artists afterwards. There should be nothing "exlusively on iTunes" (or eMusic for that matter).

Opening competition prevents unfair business practices (to some extent, anyway, worth a shot!).

Billions you say?

[MrPeavs]

"piracy, a problem that has cost the music industry billions in revenues in recent years.'"

I don't buy it one bit. I always find comments/stats like this to be funny. How does that go again, 76.34% of stats are made up?

Whos to say that Redneck Billy Bob would really have paid for that Britney Spears album that had the song that he pirated? Or that your great aunt Ethal, really would had bought that Iron Maiden album from that song she pirated?

I think these numbers are grossly exaggerated and most likely, just made up. How are you to statically calculate a loss of a non-material product that you are "assuming" someone "would have" purchased legally?

The RIAA and MPAA need to get knocked off their little soap box and stop preaching their bullshit. It isn't like they aren't making enough money as it is, those fat cats pockets just keep getting bigger. Not to mention, established artists are not hurting either. The people that are getting hurt buy this are the struggling artists, that the music industry is already raping as it is. But do you hear these stuggling artists bitching, no, most of them are not. Most of them realize the more people that can hear the music, the more fans they are going to get. True fans that will buy their albums and support them.

Irony

[Datasage]

Record Industry Buiness plan

1. Fix your price at a point higher than what the market wants.
2. Find comsumers who priate your music because they dont want to pay set price.
3. Extort said persons for more than they would ever spend in a year for music.
4. ???
5. Profit

They got it pretty good, they make money of those who acutally buy thier songs and make money of those who dont.

Re:clarify this paragraph:

[Chosen Reject]

Whether or not Jobs personally believes that it would drive people to piracy is moot. He has to know that that is what will get the RIAA's attention. So if he says that it will drive users to piracy, and others believe him, then the RIAA wouldn't attempt it, because then people will see that the RIAA wants people to pirate songs so that they can sue them. Again, this things might not be true, but it's all how it looks.

Jobs says they will pirate if prices are fixed, people believe it, the RIAA does it anyway. Regardless of whether or not any of that happens, if the RIAA complained about piracy after they fixed prices, people would say "Jobs told you so. It is your own fault."

Re:variable pricing ... people will just wait.

[fahrbot-bot]

Music and movies are commodities and need to priced as such. Their respective inductries need to realize this.

The problem with this variable pricing, based on the product's age, is that many (most?) people will simply wait until the price of the item drops to purchase it. Just like DVDs.

How many people now skip seeing a movie in the theater and buy the DVD? How many of those wait 6 months after the DVD release for the price to come down?

The movie industry still mainly counts only the opening box office receipts as the guage of a movie's success. Who's to say the music industry doesn't do something similar.