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Music Media

States Sue Record Companies For Price Fixing 396

Posted by timothy from the please-for-your-own-good-check-out-small-labels! dept.
Logic Bomb writes: "Twenty-eight states filed a federal lawsuit today against the five largest record labels alleging price fixing on compact discs. The Federal Trade Commission has dealt with this before, through an out-of-court settlement that was supposed to fix the problem. A Reuters article provided by Yahoo gives good details."
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States Sue Record Companies For Price Fixing More

States Sue Record Companies For Price Fixing

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  • This is small potatoes (Score:2)

    by Anonymous Coward
    I was excited to read the headline, but the details are disappointing. The MAP policy is indeed price-fixing, but pales in comparison to the across-the-board price increases that the major labels impose on a periodic basis. I believe the antitrust terminology is "concert of action"; the labels have been doing it for years and the FTC and the states continue to ignore it.

    CDs are already the greatest price-gouging scam in the history of the world: what other industry found a way to dramatically reduce their costs (plastic vs. vinyl) and increase prices by 50-100% at the same time. Since then, every year or two they ratchet up the wholesale price by another buck for no particular reason.

    I'm glad that the states are suing the record industry for price-fixing, but in fact the industry is getting a pass on a much bigger scam.

  • Huh? Have you had your head in your ass since 1992? Japan's economy is in the shitter. Unemployment has doubled since 1988 and the cost of living is more than in ny other developed country. The economic crisis in Asia a couple years ago hit them rather hard too.

    Shit, no wonder this was marked as a troll. It was pretty content-free.

    - A.P.
    --


    "One World, one Web, one Program" - Microsoft promotional ad

  • Think of it this way. A bunch of fat, greedy bastards are suing a bunch of other fat, greedy bastards. We've already been screwed out of our cash. We aren't getting it back. But it's nice to see the people who screwed us over getting screwed out of the money they stole from us. Isn't this a sad, sad state of affairs?

  • Your write: It's not atypical for the *cover art* to be a very significant chunk of this.

    Er ... Take one box of crayons and one notepad, and start drawing. Everybody has enough creativity for that, and there's no shortage of examples if you need some.

    For goodness sake, disentangle yourself from the standard production machine! If you're using a cover artist to create your cover art, and a recording technician to do your recording, and backing singers/musicians to do your backing, and a mastering outfit to do the mastering, and a producer to produce the whole kaboodle, then it's not really your album at all!
  • Also it is damn hard to find a job and even harder to find a job if you have been laid off,

    News to me: I keep getting job offers to do AIX or Solaris contract work in Tokyo..

    But I won't wear a tie or work for a bank, and I definitely won't fly coach to asia.. But I definitely _would_ be interested in a biz-class seat for a short term, if only for the sushi and the gadgets..

    Your Working Boy,
  • We don't vote to decide on the price of things.

    Yeah we do, with our wallets. Or, thanks to filesharing, with our mice.

    I currently vote to buy only discounted CDs (and only on rare occasions), rip 'em and trade 'em over my corporate LAN and among a close circle of pals, and to not bother with Napster and its ilk. But that's just me.

    While two wrongs (price gouging, copyright infringement) don't make a right, they certainly do grab attention..

    Your Working Boy,
  • This is the result of an FTC action, and those alone take forever. The RIAA practice started in Feb 1995. The FTC settled in May 2000. This has nothing to do with attention brought by Napster.

    Still serves 'em right :-)

    --
  • Regardless of how bogus their argument is, this IS part of their argument, that promotion costs money. Promotion isn't just advertising on MTV or magazines or TV, it includes advertising, whether directly or in cosponsored stuff like this.

    --
  • Do you really think Wal_Mart and everybody was upset that the RIAA "forced" them to charge more money? How much arm twisting did it really take?

    --
  • Folks,

    I think you all need to read a good textbook on microeconomics.

    The reason why the states are suing the RIAA and the rapid rise in the popularity of Napster is simple: the RIAA and its member companies are engaging in cartel-like price fixing.

    I mean, right now go to your local Tower Records, Sam Goody, or Virgin Megastore and look up the average price of a non-discounted album-length audio Compact Disc. Is it averaging US$17 to US$18? Now go look up an online CD retailer like CDNow, Borders and Buy.com; their average price is about US$14.

    Both of these prices are bordering on exorbitant, and if you know how cartels work there is now massive incentive to get around this cartel. This is why Napster have become so popular, because people are tired of shelling out such high amounts of money for album-length CD's.

    This is why I think the RIAA member companies should not charge more than US$9.00 per album-length CD. By lowering the price of the average CD to this price point the incentive to do piracy drops to very low levels, since more people can afford to buy the CD in the first place.
  • What the *HELL* are you talking about? yes, price fixing is "normal" in other countries, but that does not make it right.

    Japan's economy crashed BECAUSE of the inefficiencies and counter-productive incentives introduced by the strangling government control, not because of the removal. All the businesses collapsed because of the artificial economic incentives they relied on like crutches which were removed.

    And for evidence of Japan's amazing economic success -- well, let's hop in a time machine to 1990, and you will invest $1 in the Nikkei and I will invest $1 in the Dow, and we'll see who does better in the end!

    (hint: today you'll have about $1. I'll have about $9.)
  • The price of audio CD-Rs has pretty much fallen through the floor.

    Originally, the price for audio CDRs was much, much higher -- in the $13-$14 range PER DISC.

    There is no real reason for this, as the "RIAA Tax" is only 2% of the CD wholesale price, and the cost of producing an audio CDR is no more then the cost of producing a data CDR. Apparently, the CDR manufacturers have "broken rank" with the RIAA's agenda of discouraging home recording through high priced media. A quick web search now turns up blank audio-only CDRs for $1.13 each.

    But yes, the record companies do get a cut when you buy an audio CD. For that $1.13 CD, the RIAA receives between two and three cents, whether you use that CDR to copy a Metallica CD, or record your own band in your garage.
  • This is the real issue in all of the Napster debates. The gouging of the consumer is what is really driving the online sharing of music, I think. It's pretty apparent that most of the industry claims [salon.com]that the higher prices are due to promotion costs are bogus.
  • I really don't think that the artists would suffer all that much with the RIAA being gone and the major labels having their wings clipped. Here's why:

    Napster has shown that the 'help' that major labels and the RIAA provided to the artist, in terms of distribution and promotion, is just not needed anymore on the net. It used to be a really valuable crutch. A new group could depend on a deep pocket while the word got out and a fan-base was laid down. The initial financing for a massive production of albums was handled. Tours were arranged and promoted. All that took heavy connections but it no longer matters.

    Now, a small band can set up a streaming video-audio server for peanuts... The cost of a cheap MIDI keyboard. It's just another instrument they play. Then they make a few posts to a USENET group that follows their musical style, and provide a URL to their site. On the site, they host some samples, bios, pics, rants... Give people the opportunity to actually buy a CD off the site, and save money by only burning those that are ordered and paid for, not a batch of 10k that may not sell. MP3.com is a good resource to tap into as well - but you know that.

    It may take a bit more capital to get off the ground than when you have a recording contract, but it's definitely much cheaper than it would have been even a few years ago.

    Now, the "manufactured" bands that are created by promoters, simply for the purpose of selling products and lining the pockets of the big labels.. Well, they'd likely be a LOT less popular then they are today. They would not spread as quickly based on their own talent (or lack there of) without the label cramming their hopped-up shows down every pre-pubescent throat in America. That's a separate issue, I think. (I saw a bit of NSYNC at Madison Square Garden on HBO last night. What a hot, steaming, runny pile of shit!) They'd still exist, and infact become the cash-cow of "The Industry", since talented artists would now have an opportunity to be heard without being herded.

    Many Artists have often complained about the contracts they were forced to sign when they were getting off the ground. They're in the position where the label owns rights to anything they ever do, and essencially have to produce the kind of music that the label dictates. I'm not a musician, but I can certainly undertand how frustrating this sort of arrangement must be - I've been told to code a certain 'way' before, and have left a job as a result. Prince is a good example of an artist fighting a contract with a label. The whole silly name-change thing is supposed to have been a means of straining the contract he was under, so he could do His music and not Their music..

    Anyway, the point is that with the current technology, an Artist has more options for creating, promoting and distributing their work. The recording label makes things a little easier - if they like you, but they are no longer the ONLY way of making it big. I think that MP3.com, and especially Napster, has served to show new artists that they have a chance to make it big without selling their soul. Hopefully many of the big artists will be able to side-step their contracts to take advantage of the new tech as well. I suspect many have not been outspoken on the RIAA issue for fear of 'punishment' by their labels, rather than because they oppose Napster.

    There is a perception issue here though. Artists who want to spread their music stand to benefit greatly from the 'new tech' way of doing things. Artists who want to get paid for their music will have to be really good - and sell themselves to fans, not a label. The difference is subtle but significant. Giving the individual fan the choice of paying for music will make it harder for those Artists who 'are in it for the money', but easier for those who are in it for the music. We KNOW that the Internet culture is a meritocracy - regardless of what the big businesses think.

    I think that there's a strong lesson in the Grateful Dead, who have been encouraging the bootlegging of their performances as a means of promoting their music. That lesson is that we're all going to Hell in a bucket. :)
  • Ok i'm torn on this issue. on one hand, i'm a sysadmin/geek and mp3s are HANDY! but on the other hand i am a musician who has recorded an album (another on the way...). $12-$16 for a GOOD album imho is worth it. but accross the board? no thanks. When eve6's first major label record came out i bought it *brand new* for $6.99. you know why i bought it? because i felt that even if the record sucked, i only lost 7 bucks. turns out it's one of my most played albums (along with thier latest...).

    Anyway! if the riaa thinks that they actually have a chance to walk out of this mp3 ordeal that THEY have created alive, lowering the wholesale price of cds would be the way to go.

    think about it... if all the latest albums were priced to own at $7-$12 for a single cd album, what would stop someone from actually buying the disc, instead of using any of the peer-to-peer file transfer programs to find the albums they want. On top of that thr riaa could walk out of this as the hero *if they play thier cards right* and use napster et al. to thier benifit. Use it the same way they use radio promotions (sometimes before a major or semi-major album is released, the first single is released to radio stations to try to generate a buzz about the album... and what does a buzz lead to? record sales.)

    Ugh!

  • Consumers like music, but they like free music even better! They like free MP3s better than $20 CDs even though (most) MP3s sound worse than CD audio. The RIAA is outraged that consumers would rather use Napster than drive down to Tower Records. I think consumers would welcome a competitive alternative between $0 music and $20 music. If the records companies were not fixing prices, there be $5 CDs (that didn't suck :-)


  • I used to buy cds at the Air Force base by my house.. The BX there charges cost/near cost for their stuff. All the cds were $10.49, which I imagine is either their cost or really close. Much better than $15-19 that most places are charging.
  • Blank CDs are what, 30 or 40 cents if you buy them on a spindle?

    What kind of logic is that?

    Man, a Lamborghini Diablo SV Couple costs $250,000. Wow, that's expensive. There can't be more than a couple hundred dollars of materials on one of those things... bring out the lawyers!
  • Yeah, that funny since most "independent" record labels charge the same about for CDs (the only exception I can think of is Dischord...)
  • No for the same reason productivity increases seen with computers never seem to pan out. Since recording time has gotten cheaper, everyone uses more recording time.
  • Agreed. However, I find people who say "Something costs too much so I'm going to steal it" to be on somewhat shaky ethical grounds.
  • You're absolutely correct. This happened a few years ago with Blockbuster.

    The movie studios were giving Blockbuster huge price breaks, since they bought so many copies of each movie. Slowly and surely, the smaller, independent movie stores went out of business, unable to compete with the goliath that is Blockbuster.

    Then one day Blockbuster mgmt told the movie studio that they thought that the price on a given film was too high. (it was some 2 star B flick, which the studios were asking $60/copy. standard price at that time for a popular title was ~$90/copy.) The studio disagreed, and kept the price the same. Blockbuster decided to just not carry the film. WHAM! Instant major dent in the studio's revenues, since they were then stuck with 60,000 extra copies of a movie nobody was really dying to watch anyhow.

    Now Blockbuster is on the rack themselves and fighting bankruptcy. It's funny how quickly the tide can turn sometimes.

  • Next thing you will be complaining that some companies have too high of profit margins.
    No, next thing I will be complaining of an entire industry where the indiviual companies collude to keep profit margins high. That's what the RIAA does.

    --

  • US Senator Hatch warned the RIAA this was comming if they didn't fix the problems they where having. If this is what the RIAA needs to get with the times, so be it.

    Though, I think that the whole situation of everyone suing everyone in the US is a joke. Govt. or not. *Sigh*.. maybe no other choice than to play by the rules of the sandbox.




    --------------------
  • This sounds like a nice thing.. except ask yourself this question: are you going to see one red cent of these collected 'damages' awarded? You, after all, are the 'victim' of these increased prices.

    hrm... ~$4/cd * ~800 CDs.. I have the money spent already!

    (HA!)

  • parallel (Score:2)

    by / ( 33804 )
    This is parallel to the FTC's action, which was settled by an agreement not to engage further in these price fixing methods. The state lawsuit goes beyond that and seeks monetary damages.
  • One of my best friends is the manager of a local AMC Theater. The theater gets zero revenue from the price of the tickets. The theaters get 100% of their revenue from concession sales. That's the major reason for the high price in concessions, b/c the theaters raise them to make higher profit margins from their only source of revenue. AFAIK and as far as he knows (AFAHK I guess) all theaters in the country operate this way. Just thought you'd like to know.

    ---------
  • Even if they sold the CDs at a buck a piece, I would not buy the same dollar-amount as I do now. There are not 30 albums per month that I would want to acquire.
    Maybe you wouldn't, but I would. I can think of a lot of older music I'd own if it were much cheaper. I can't say I'd buy 30 a month @ $1, but I bet I'd be close :)

    I'd also argue that the $1 a CD wouldn't be reasonable. But if CDs were $8 each, wouldn't you be more likely to spend approx. $30 a month then? More likely to find four CDs a month that you want to have :)

    ---------
  • So little of the money actually trickles down to starving artists anyway. Vast majority of the money either ends up in the hands of the record company or the few rich artists. Just like the rest of the economy where the 95% of the wealth is held by 5% of the people.

    A Dick and a Bush .. You know somebody's gonna get screwed.

  • Shit, I guess I'll have to run out and get a patent/trademark/trade secret/flotilla of lawyers and goons named 'Rocco' now :)

  • "Bookstores have been doing this for quite a while; often the markup is around 45% or so on hardcovers, so when you see the new bestseller for 50% off, chances are they're not making, but losing, money on it... "

    Unless the books are what's known as "reviewer copies." These are surplus books that were originally intended to get distributed to media/book critics. Such books, when available, can be bought wholesale for 25 cents on the dollar. So, if they're sold at 50% off full retail, they could in fact be making a 100% profit.

  • they created copyright... and continue to issue them.

    do you really believe that all copyright should be abolished? That's pretty shortsighted. Do you want to nationalize industry while you're at it?

    ---- ----
  • The typical assignment of the copyright to the publisher, not the artist, is a problem. But the government is not causing it, or perpetuating it.

    ---- ----
  • > do you really believe that all copyright should be abolished?
    Yes!
    [...]
    I dont want to end private property!

    ... um... what, exactly do you think copyright is? And how would you define "fair use?" "Fair" as in "free for me?" Or what?

    ---- ----
  • > What kind of damages would they have to pay and to whom?

    That's the part that frightens me.

    Y'know how your phone bill has lots of "charges" from the FCC? When the FCC charges the phone companies a few gazillion for Al Gore's latest "wire up the poor" tax^H^H^Hinitiative, the phone companies pass it on to us, washing their hands of it with the line "well, we have to charge you, the consumer, in order to recoup the lost revenue from the FCC's decision".

    Just imagine RIAA's response to losing the class action suit. "What? We owe the gummint $500M? Damn, we'd better slap an 'FTC-mandated $2.49 MAP-restitution fee' onto every CD we sell!"

    Yeah, I know, I'm just being paranoid and talking off the top of my head.

    But if I were a slug^H^H^H^HRIAA executive, and lost the case, it's what I'd do. (And yeah, apologies to all the slugs I just insulted.)

  • >Why do you talk about the cost of a blank cd as
    >being part of the issue? For instance, a Redhat
    >Linux CD costs $50 from Redhat. That's a helluva
    >a lot more markup than ever occurs with a single
    >mass produced music CD...

    Your comparison does not hold.

    When you buy that $50 Redhat CD (or the $70 version, or the $120 version, etc), you're NOT paying for the Linux operating system. You are paying for the SUPPORT contract that comes with that level of the Redhat distro.

    If you don't want the support, got to:

    http://www.redhat.com/download/mirror.html

    ... and go at it.

    Ditto for SuSE, Mandrake, xBSD, etc.

    As for the windoze and office packages being outrageously overpriced for the festering piles of crap that they are, I agree entirely. That's why I use either Appleworks (came free with the computer) on my Mac, or StarOffice (came free with the distro) on my SuSE box.

    john
    Resistance is NOT futile!!!

    Haiku:
    I am not a drone.
    Remove the collective if

  • Not that I side with the record companies here, but that's really no different than saying that Blizzard is getting a 2500% markup for Diablo II because four blank CDs cost $2 and they're charging $50 for the game.

    There are lots of other costs. Now, admitedly, the fact that they charge about half for a cassette is what really makes one wonder. And I suspect the production cost of Diablo II was a little higher than the latest piece of teenybopper pop-dreck.

  • I read Love's speech and I don't find it at all convincing, sure whoever wrote it made some interesting points, but I'm skeptical about rock stars talking about backend code and VC's. Love also bitches about digital music, not just MP3s, yet only a couple of Hole releases are available on vinyl.

    Hole is a mainstream alterna-girl band, backed by a big record company and is marketed as being "rebellious." Its their job to keep stirring the pot. To keep teenagers paying $18 a cd to listen music that does its best to diss the "man", while very obviously and ironically lining the the pockets of big business.

    I'm sure anyone in the music industry has critical opinions about the way things are running, but its one thing to express your opinion [mp3.com] and another to have an insincere, carefully worded speech perfectly suited for internet distribution [salon.com] to keep the kiddies convinced that though Love's been in many mainstream movies and a media gatabout, she's still queen of the subculture.
  • Well, I have to agree with most of the posts around here about how ironic this is etc. etc. It makes me smile.

    But, let's think what might happen in the long run. We all agree that paying for CDs is like bending over and getting it with no vasaline. And somehow, at the same time, the actual artists are mostly getting screwed. So if this suit goes through (final verdict expected around 2007?) then do you think the artists will get screwed even more? Or, hopefully, will then realize the RIAA isn't that vital, and finally get around to cutting out the fat middle man and producing more themselves? This could be yet another big push, after easy CD burners and Napster, etc., for the artists to go independent. Where do you'all see this possibly going?

    Jason
  • Napster (Shawn Fanning anway) says buy more CD's, not fewer, to prove that Napster doesn't cut into record sales, and also to show support for the artists. Boycott the RIAA if you want, but somehow support the artists.
  • Alcohol is not addictive, my friend.

    My name is Jon C too..interesting.
  • Do you think if some garage band did a remake of some old song it would be wildly popular? You know how many people have done covers of _every_ song on Garage Days? People want to hear bands they _know_ sing old songs they _know_ form someone else. No one would have ever heard that version of "Last Kiss" if it wasn't Eddie Vedder singing it.
  • No, I'm sorry, it's really not.

    Do some research, "fool." Alcoholics Anonymous was started to help people suffering from alcoholism. Alcoholism is not addiction to alcohol.

    Fucking twit, read once in a while before you fucking yell at people. I'm in a bad mood, and you're fucking wrong.
  • "Your argument basically boils down to I get stuff for free over here, so why don't I get everything for free?"

    No, my argument is that outrageous CD prices and the whole notion of copyright, as it currently exists, is an artificial and non-intuitive construct. The natural idea is that ideas should be free, since by copying them I have taken nothing from you. You still have the idea in a complete and undiminished form. What is worth paying for are the *services* and *items* that add value to the idea. It is not logical that the author of an idea should get anything other than what people feel that idea is worth. If they think your music should be free, then you are entitled to nothing. If that causes you to stop making music, fine. There will be plenty of others who will fill your shoes. Either that, or fewer and fewer people will produce music. But if people really want to hear music, they will probably start paying artists they like in order to ensure they keep making music. Artists probably won't be able to make bazillions of $$, but the vast majority of artists don't make tons of money right now anyway (music is a big-business, profitable venture *only* because record labels have artificially made it that way - people made just as much music before the RIAA showed up as they do now, and I would argue that the quality and musicianship of artists back then was an order of magnitude better than N'synch). In fact, the only thing likely to change is that big greedy record labels will go away and artists will continue to make music as they have since Man first wacked two bones together to tap out a rythym, and another person liked it enough to sit quietly and listen.

    -Vercingetorix

  • "Fine, look at the music as a service then. The artists have recorded it as a service. You are free to pay for it or not. Your choice."

    It's only a service when they are actually performing the service. A recording is just an imperfect facsimile of the performance.

    "There's a difference between what someone says they think it's worth and what it's actually worth."

    No, there isn't. Something is worth ONLY what someone else is willing to pay for it. There is no such thing as inherent value apart from the consumer. It soesn't matter at all what it cost you to produce it, since if no one is willing to pay what you are asking, it isn't worth anything, and in fact reepresents a net loss.

    "you have a whole bunch of other people who think the music is worth what they charge for it and are willing to pay that."

    And those are the people who will keep music alive. As long as people perceive something to have worth, they will pay for it according to they value they perceive. So what if the kiddies keep downloading for free? The music they like will likely start to disappear if the don't pay something for it. If that happens, they won't have any more music, or they will start paying enough to support the artists. Again, they probably won't pay enough to make anyone rich, and that's a good thing. Also, instead of being able to make a couple of albums and live off the royalties, the artists might just have to settle down and start making a lot of music, since the amount of money they will be able to make on any one song will likely be limited. Again, this is a good thing. The original idea behind copyrigjt was to give the author a limited period of time in which to make money, thereby encouraging them to come up with more ideas. Look back to the artists in the past. They would churn out huge quantities of music. The concept of a one hit wonder didn't exist.

    "Your entire argument boils down to saying that the fact that because stealing music is so easy relative to paying for it that a significant people choose to steal it means prices are inflated"

    Once again, no. My argument is that prices are inflated way over what the music is actually worth. That is why the industry is facing this lawsuit. Recorded music is probably worth something, and we will probably find out what it is actually worth when it becomes possible to obtain music and pay the artist what you believe it is worth in an efficient, easy manner.

    -Vercingetorix

  • "If you don't believe me, then when you go to sell your house give me a call. I bet you change your mind real quick about who sets the price."

    I suggest you try selling a home and see just how little control you have over the price :)

    Sure I can set the price of my house at any arbitrary value I choose. However, if no one buys it, I have no choice but to lower the price or take it off the market. The price is dictated by what the buyer is willing to pay. If they don't want to pay my price, they can buy from someone who is selling at a cheaper price. The only way I can dictate the price is to collude with my fellow home sellers and fix the prices of all homes being sold at some arbitrary value, thereby giving the consumer no other option but to pay the price I've set. This happens to be highly illegal.

    -Vercingetorix

  • I agree that Napster isn't looking out for anybody but Napster, I don't agree that it isn't helping. Having napster be free and readily available adds competition to the music market. Competition is good, it keeps the big companies from getting to arrogant [microsoft.com]. Anyways, perhaps artists will have to live off of live music returns and merchandise sales. Linux has been doing that for years now....

    -- Moondog
  • I have seen this quote in nearly every article I've read about this situation, "The labels say they started the MAP policy in an effort to help smaller music retailers compete with chains such as Wal-Mart Stores Inc. and Circuit City Stores Inc. They say smaller retailers do not have the option of offsetting losses from cut-price CD sales with sales of other products." It makes you say to yourself, "Awww..those nice big record companies were just trying to help out little record stores, that's sweet."
    My question is, why were they doing this? Why would juggernauts like Sony and Warner Brothers do a damn thing to help out small stores at the expense of huge business partners like Wal-Mart? What was in it for them?


    This is my question exactly. Everyone is screaming about this, but what exactly did the RIAA have to gain from this, except helping the smaller stores? The big chains were still buying CDs from them, and buying them at the same price as the mom and pop stores, so it definitely wasn't money they were looking for. Could it be they were trying to keep the small stores open because they offer more of a variety than the big chains?


    The huge chains won't buy anything that isn't a huge hit (quick is what everyone is always complainign about, that they can't find anything except the big bands), but the smaller stores stock a wide variety of CDs. The record companies didn't gain anything from MAP policy, but the small stores did. SO why is everyone screaming about it, when the RIAA was trying to get some of the small musicians out there? I don't want to have to go to WalMart for all my CDs, because most anything I would buy wouldn't be available at WalMart.

  • Well, on the one hand they probably don't mind selling @ a higher price as long as everyone else has to sell at that price - on the other hand, it prevents them from using business tactics like selling below cost in order to drive out their smaller competitors, which is kind of annoying when you don't want any competition...
  • Left alone people find alternatives to monopoly services and goods.

    Unless the monopolist arranges matters so that people have great difficulty in finding or knowing about such alternatives, or by using their own resources to prevent any alternatives from being implemented.

    Of course, if you TRULY got the government out of the way, then there would be no such thing as "intellectual property", so no company would be able to hold onto a government-sponsored monopoly on such information.

  • Sure.. and if a company wants to sell products at a loss.. that is their right... as is charging high prices.. In todays global economy this is much harder and there is almost always an alternative. I still dont see why the government needs to get involved.

    Argh - get a cluestick why don't you! Sure, if a company wants to sell products at a loss - it's their right - up until the point where they're hurting the society, then it's the right of the SOCIETY to use an agent (the government) to slap the greedy bastards back into primordial ooze.

    The so-called RIGHT of a small group of people (the owners of a company, for instance) to make money does NOT trump the right of a society to take care of themselves!

  • If what ever it is that's being sold belongs to the company... then I dont care if millions die because they can't afford it... what the hell.. just because you have a bottle of water and I'm dying of thirst does NOT put you under ANY obligation to give me a drink. And in the case of companies.. we can live without what they are selling.

    Heh - your response almost provides a blatant example of why society SHOULD slap down greedy bastards.

    Try and make your examples fit the argument. If I had the only access to water in town, and 20,000 other people are going to die if they don't get access to that water, but I don't want to sell them the water unless they hand over all their property, is it in the best interests of the town to pay up? Hell no - they're going to shoot me, then take the water anyway! I'd be an idiot to think I could make the outcome any different.

    Similarly, only an idiot would think that a company has some kind of fundamental right to "property". The society defines what "property" is - NOT any company.

    If a society can't take care of it's self because a company charges high prices... that society should probably die off... give me a break!

    But they CAN take care of themselves - by destroying the company which is blocking them from the resources they want. The company only exists, and is profitable, at the whim of the society - and any organization that forgets that is just ASKING to be destroyed.

    I don't even know why you're so defensive of companies - they don't even exist as real people, just legal entities! If you want to talk individual vs. societal rights, then talk about that - don't pretend that a "legal entity" has any kind of rights equivalent to a real human being.

  • You seem to have a permanent case of individuals-are-more-important-than-society, and a strong unwillingness to even think about any other viewpoint.

    Let's bring this down to primal force. There is no such thing in nature as a "right". Nature lets you keep what you have the power to defend. If someone or something more powerful than you comes along and wants your stuff, they'll take it from you. That's the only kind of "right" that nature gives you.

    In a SOCIETY, you've got a bunch of people cooperating with each other who have decided that they'll help each other keep their own stuff. If someone tries to take their stuff away from one member of society, then the other members of the society will help that person keep their stuff.

    You only get the "right of personal property" because the society has agreed to help you keep your stuff. If the society DIDN'T agree to help you keep your stuff, then nature says the first person who came along who was stronger than you could take it away from, and your "right" would be worth diddly-squat.

    That's THE problem with our society.. people believe they are entitled to what other people have.. rediculous! You have NO RIGHT to anything my company has or myself for that matter!

    Bullshit. Who has the power determines who gets what. You or your company only gets to keep what has gained because the SOCIETY as a whole has decided that it's good to allow people or companies to keep what they have gained. You don't have any "right" except what the society chooses to grant you. The only reason behind this is because the society-as-a-whole is stronger than you, and can kick your butt.

    Companies are created and owned by people.. the government is a "legal entity" and it has ALL the rights it wants.

    The government is SUPPOSED to be an agent of the society as a whole, and has those "rights" which the society grants it. If the society decides that it doesn't want the government to have those rights, then the government won't have them.

    Of course, this breaks down if the government ceases to be an agent of the WHOLE society, and instead becomes an agent of a small group of people IN the society.

    What's the point of running a business if society has the "right" to destroy what you build and TAKE your property?
    Why bother?

    Well DUH - if you provide a service to the society, then the society will reward you for that service. There's no such thing as a "right" to run a business or make a profit though. If you do something that severely hurts the society, then its going to use its collective might (possibly operating through its agent the government) to kick your ass. And all your whining about "rights" will be treated like the fertilizer that it is.

  • I purchased some very good CDs on MP3.com for around $8. Admittedly I had to filter through a lot of crap to find them.

    MP3.com should have stuck to distributing music from indie artists rather than screwing around with that stupid my.mp3.com crap. Now they're going to have to take it up the ass from the RIAA, just like everyone else.

  • Just so you know I am replying to everyone who responded, not just you `;^)

    Yes you can record an album for 25K easily when you talk about supplies and an engineer. But when you talk about something like the black album which was produced by Bob Rock, who makes about 100K per album (at least), your prices skyrocket.

    To all the other people who replied, I absolutely agree that prices are too high. My only point was that the argument that "CD's cost $.30 to make" is bs. It's like arguing to use Linux because Bill Gates speeds. There are many reasons to boycott the RIAA, use the right ones.

  • The example was given below but I'll repeat it here.

    Diablo][ ~=$50usd.

    SpiceGirls 1st. Album(New) ~=16 Cost to produce/record Album ~=$500,000 (I have the stats I will find it later)

    Amount to promote ~= $17,000,000

    Amount received concertsales/albumsales ca. 1996-1999 ~= 130,000,000.

    Where's your 35000% now? I don't know how much it cost to make Diablo][, but they have a MUCH higher markup than an album does, as they do not have as much real world expenses. Lawyers are more expensive than programmers.

  • CD's have been around for almost 20 years. When they first came out, they cost about $20. Compounded inflation since 1985 has been about 50%, so if CD prices held steady with inflation, they would cost about $30 today. And of course, the first CD's sounded horrible. They were not digitally remastered, they had no bonus tracks or new material, and they suffered from bit rot. Despite the unprecedented increase in quality, the huge number of value-added features CD's come with today over when they first debuted, their price has fallen, in real money, by 50%.

    And the price of music has always fallen. At the turn of the century, it cost most than a week's salary to buy a double sided acetate record, which was extremely low fidelity, was fragile, and was 6 minutes in length. At the dawn of the hi-fi era, it took more than a day's salary to buy the new LP's, which were still not good as today's CD's. Now with the CD, we pay a tiny fraction of hourly hourly wages, for something which has much more music, last longer, and sounds better, and people still complain.
  • Interesting idea. I've taken a quick glance through much of my music and believe that a large majority of it have artists that either don't have many music videos, or none.

    What would an 808 State music video look like?

  • Don't forget about legal costs.

    Seriously, these corporations are legal machines. Microsoft's legal team has more money than most small countries. And because of this, they get away with too much.

    One thing you forget, is that the royalties artists collect in CD sales are percentages of cents,... and many times artists themselves are supposed to pay for recordings out of their own pocket.



  • Am I the ONLY person who sees this as a reason why music piracy is NOT a bad thing? And am I the ONLY person who is disgusted that these companies have not learned their lesson?

    They did it before, and we settled out of court. Thanks a fucking lot Uncle Sam. I mean, I'm not surprised in the least bit that the music industry has weazled out of the agreement. To be honest, we need to revitalize the age-old practice of corporate death sentences (government mandated dissolution of corporations).

    Has anyone else seen the Phillip Morris commercials? They're very gutsy! They seem to agree with the government's actions against the cigarette industry. But at the end they say "We thought you should know". Phillip Morris and friends have destroyed lives, the SAME way that the music industry is destroying culture.

    The music industry takes our culture, packages it, copyrights it, and makes it a product.

    We're seeing more and more anti-trust suits being pushed through. Mostly resulting from the sucesses of the Microsoft prosecution. THIS ISN'T A BAD THING. Government exists to protect the people, and I honestly believe they are doing just that.



  • Left alone people find alternatives to monopoly services and goods.

    True, and left alone the monopoly does everything in it's power to squash those alternatives. Some competitor or inventor might survive, but hardly on merits alone.

    In a "free" economy, nothing stops people and corporations from acting in their own self interest. A good thing, you might say, but a society of people, each acting in his or her best interest, can go catastrophically wrong.

    It is the classical "prisoners dilemma" on a greater scale. I'll give you a typical example:
    Too much use of antibiotics leads to a faster evolvement of resistant strains of bacteria. It is clearly in everyones interest that the stronger kinds of antibiotics are reserved as a last resort, or the day will come when we have large outbreaks of incurable pneumonia, for example. However, if I'm ill it is in *my* best interest to get back on my feet as quickly as possible, and a stronger antibiotic will do that for me. The sum of rational people becomes an irrational society.

    The role of a government is to avoid such situations while interfering as little as possible

    The best thing a govenment can do in a free economy is to serve as a guarantee that everyone must play by the rules. (including the government itself, of course) There are anti-trust laws, since monopolies live by those rational-individual-irrational-society mechanisms. They have been around for decades. That makes price-fixing a calculated risk and trust busting a fair action.

    Regarding the goverments own monopolies we can have a discusion about them too, but this rant is getting too long already.

  • Wrong! Production costs entirely optional (Score:3)

    by Morgaine ( 4316 ) on Tuesday August 08, 2000 @02:01PM (#870734)
    A professional album costs upwards of $100,000 to record.

    You've been taken in by the studio hype.

    A $100K production package is entirely unnecessary. Quality writers, vocalists and musicians have been creating top quality music at near zero cost for millenia, and they haven't suddenly lost that ability now that 1000-track, billion-dollar digital studios are available. This applies even in totally electronic genres --- the keyboard/MIDI scene is so incredibly buoyant and rapidly churning that the kind of equipment that would have set you back dozens of thousands of pounds just 5 years ago is available at near-student prices now, and that's not just your instruments but the whole production outfit.

    Your argument is basically back to front. The industry has created an expensive production and hype machine and uses this as an excuse for keeping prices high, as if using that environment were some sort of precondition for creating music. It isn't. If you buy into that standard MO then all you're doing is feeding the already-overfed beast.

  • refunds? (Score:3)

    by Phexro ( 9814 ) on Tuesday August 08, 2000 @10:36AM (#870735)
    Spitzer said at a press conference the states were still calculating the exact amount of the damages, but said they amounted to ``hundreds of millions of dollars'' or ``several dollars per CD.''

    so... i have around 400 cds. by my calculations, the riaa owes me $1200. empeg [empeg.com], here i come!

    but joking aside... what will happen to the cash that the courts make the riaa cough up? as a major purchaser of cds, i'd sure like to be refunded for some of the cost of my music.
    --

  • Re:But will anything come of it? (Score:3)

    by um... Lucas ( 13147 ) on Tuesday August 08, 2000 @09:28AM (#870736) Journal
    Why do you talk about the cost of a blank cd as being part of the issue? For instance, a Redhat Linux CD costs $50 from Redhat. That's a helluva a lot more markup than ever occurs with a single mass produced music CD...

    Music single: 6.00
    Full Length CD: $12-$17
    Video game: $30-40
    "Free operating system": $50-120
    Windows upgrade: $90
    Windwos fullversion $200
    Office Suite: $500

    Yet they all ship on the exact same media. CD's...
    Not once in the entire antitrust trial, did the DOJ hold up a blank CD and wonder why Microsoft charged so much more than that... They wondered about microsofts pricing yes, but they never considered the actual media as being a large enough of an expense...

    Same as for music. Software has developers, QA, graphic designers, lawyers, executives, etc... Music has musicians, producers, executives, lawyers...

    Makes no sense to my why people openly advocate stealing music yet cry fould when someone violates their GPL by not releasing source... Get on one side of the fence or the other, please...

  • Bang for the buck! (Score:3)

    by jabber ( 13196 ) on Tuesday August 08, 2000 @10:04AM (#870737) Homepage
    DiabloII, as well as many other networkable games of today, provide people who bought (or pirated) the game with the ability to play the game online. Those servers do not cost the end-user anything, but they do cost a lot of money to maintain.

    You can argue that the users have already paid for those servers, even if they don't use them, since they've paid the steep mark-up for the game. You'd be right, that's where the money comes from. But, this is the same sort of reasoning that the RIAA and MPAA use all the time. Money not made is not money that's lost. Money that's spent on the game alone is the same amount as that spent on a game you intend to network. The person who networks DiabloII is getting more bang for their buck. Simple.

    Now, where's the extra bang for the buck with a CD? As another poster on this thread suggested, a CD is no more expensive to produce then a book, yet a book tends to sell more cheaply (unless you're in college, in which case you're the victim of extorsion, but that's another topic entirely).

    There isn't anything really special about a CD. No, not anything more special than a DVD - both are the 'cool thing' in our culture. We provide the suppliers with a ready market. They set the maximum price that most people are willing to, begrudgingly, pay.

    If prices dropped, record sales would undoubtedly rise; but not in proportion. Even if they sold the CDs at a buck a piece, I would not buy the same dollar-amount as I do now. There are not 30 albums per month that I would want to acquire.

    Now for the cost of production - and here we get to see the actual price-fixing at work: Say an album costs the aforementioned $100k to record, another $100k to distribute and yet another $100k to promote (though most promotion is in radio play - paid for by advertisers, and in performance tours which are paid for at the gate). So, we have $300,000 in investment. Let's add $200k for the artists and another WHOPPING $500k for all others involved.

    Now, we've got a cool Million to work with (funny how that worked out). Say an album sells a million copies... That's a dollar per copy. We pay what?? $20 a piece?

    Even if an album sells (ONLY) 100,000 copies (pitiful), that's still $10 a pop to break even - remember the bills are paid now. Where's that extra money going? Britney Spears next boob-job? New 'Stangs for NSYNC? Bail for Snoop Doggy Dog?

  • Napster has served it's purpose (Score:3)

    by jabber ( 13196 ) on Tuesday August 08, 2000 @09:41AM (#870738) Homepage
    Well, not for those making money on it, but still.. In a greater, moral sense, Napster has served it's purpose.

    It was in the wrong, and we all know it - but by allowing individuals to rip off the Record Companies, it has prompted the bears to charge. They're now out of the cave, and everyone knows they're a bunch of greedy hypocrites.

    Two wrongs do not make a right, but apparently, doing the wrong thing for the wrong reasons will sometimes bring to light another wrong, which has been swept under the rug in the hope that no one notices. It's about damn time.

    But, I just hope that this is not a sign of things to come. The FTC/DOJ/Fed seem encouraged by their 'victory' over Micro$oft. Are they now starting to chase down other monopolists? In the case of the RIAA, it may not be a bad thing. But I hope that it doesn't turn into another witch-hunt. We've seen over-zealous government agents cause a lot of harm in the name of doing good.

  • Re:But will anything come of it? (Score:3)

    by AJWM ( 19027 ) on Tuesday August 08, 2000 @11:58AM (#870739) Homepage
    CD's haven't been around for 15 years

    Not to take away from your main point, but [scrabbles around in desk drawer, pulls out a disc, checks the date] the Dire Straits "Brothers in Arms" CD was released in 1985 -- fifteen years ago. And that wasn't the first CD by a long shot, although it is one that convinced a lot of people (including me) that it was time to get a CD player. (It was one of the first 'DDD' discs, digital recording, digital mixing, digital playback, vs some of the 'AAD' discs made from analog masters. It also had more music on it than the vinyl LP version.)

  • A couple questions (Score:3)

    by Ralph Wiggam ( 22354 ) on Tuesday August 08, 2000 @09:34AM (#870740) Homepage
    I have seen this quote in nearly every article I've read about this situation, "The labels say they started the MAP policy in an effort to help smaller music retailers compete with chains such as Wal-Mart Stores Inc. and Circuit City Stores Inc. They say smaller retailers do not have the option of offsetting losses from cut-price CD sales with sales of other products." It makes you say to yourself, "Awww..those nice big record companies were just trying to help out little record stores, that's sweet."
    My question is, why were they doing this? Why would juggernauts like Sony and Warner Brothers do a damn thing to help out small stores at the expense of huge business partners like Wal-Mart? What was in it for them?
    Question 2: What kind of damages would they have to pay and to whom? The only case like this that I remember is when Nintendo was found to be price fixing (way back in the day). In the Nintendo case, they sent coupons to everyone that had bought games that were good towards the purchase of new games. What sucks about that system was that the company that was price fixing (Nintendo here) ends up making more money by mailing out coupons good for less than the profit margin of the product. Also, while you're at the store with a coupon, you are quite likely to pick up another game/CD at full price. Someone with some info, please chime in.
    -B

  • Re:You're right. Mass stamped CDs costs far less. (Score:3)

    by Rombuu ( 22914 ) on Tuesday August 08, 2000 @10:42AM (#870741)
    This just cannot be justified

    Since when should you have to justify the price you want for something. You price it.. people either say "X is worth $Y" and buy it, or people say "X is not worth $Y" and don't buy it.

    Next thing you will be complaining that some companies have too high of profit margins.

  • Read the article... (Score:3)

    by hicktruckdriver ( 29349 ) on Tuesday August 08, 2000 @09:38AM (#870742) Homepage
    I'm not a real big record company apologist, but:

    At that time, large department stores and consumer electronics retailers began selling CD's below cost as a "loss leader," in an effort to get people into the stores to buy big-ticket items, labels said.

    The labels say they started the MAP policy in an effort to help smaller music retailers compete with chains such as Wal-Mart Stores Inc. and Circuit City Stores Inc. They say smaller retailers do not have the option of offsetting losses from cut-price CD sales with sales of other products.

    Granted, those guys have a way of lying through their teeth, but that sure makes sense to me. If I were running a small music store which only sells CDs, I can't afford to lose money on CDs. A Best Buy can pick up the slack by selling impulse items like CD cases and, ehrm, refrigerators.

    The labels say they received no financial gain from the MAP policy. "The wholesale price we charged retailers was the same whether or not they participated in MAP," one label executive said.

    But the states claim in their complaint that if a retailer advertized a price below the agreed-upon minimum, the retailer risked "the loss of all promotional funds available from that (label) for a period of 60 to 90 days...(and) would jeopardize promotional funds for an entire chain."

    Why exactly is this price-fixing? The instrument industry does the same thing -- they sell instruments at a wholesale $X. They don't allow you to advertise below a certain MSRP in-print, but you can sell it for any price you want, hence the haggling which is an unalienable part of the experience of buying an instrument.

    Doesn't the blame lie on the retailers?

  • Three words (Score:3)

    by / ( 33804 ) on Tuesday August 08, 2000 @12:33PM (#870743)
    The three words that scare the crap out of the RIAA?: Northern Mariana Islands. That's right, we're not just talking about the full sovereign force of twenty-four states plus Puerto Rico. This action has been joined in full by the Northern Mariana Islands. Don't you see? The Northern fucking Mariana Islands!

  • This reminds me of an Onion headline .. (Score:3)

    by cje ( 33931 ) on Tuesday August 08, 2000 @11:06AM (#870744) Homepage
    .. from the book "Our Dumb Century", which is essentially a set of newspaper parodies from the year 1900 to 2000 (starting with the assassination of President McKinley and ending with the ascension of the Christian Right to heaven.) The headlines marking the beginning of World War I looked something like this:

    WAR DECLARED BY ALL

    States Sue RIAA Sues Napster Sues Metallica Sues Courtney Love Sues Orthodox Jews Sue Barney the Dinosaur Sues Dr. Dre Sues Puff the Magic Dragon

    TIME-WARNER ALMOST SUES ITSELF
    Companies Struggle to Remember Allies

  • Re:good news, but.. (Score:3)

    by EnderWiggnz ( 39214 ) on Tuesday August 08, 2000 @09:56AM (#870745)
    the problem is that ALL the CD's are one price. This is called "collusion", and is illegal under the Anti-Trust laws.

    It could also be considerred "price fixing".

    It is about time that legal action be brought against the RIAA. They have been using monopoly-powered mafia-like tactics to hold onto their control of the industry. Simple fact of the matter is, that these record companies control just about every aspect of the music business, and competition is nil. Look at Britney, N*Sync, Backstree Boys, etc. A free market would have never allowed these performers to sell, let alone be sensations.

    I would really like to see the MPAA sued for "bundling" their DVD players with their DVD's. That is, in order to play a DVD, you MUST use one of the players that are officially sanctioned by the MPAA. It always struck me a bit like the old railroad (J.P. Morgan?) thing where you had to use THEIR railcars if you wanted to use THEIR tracks. The forced youi to buy multiple product, because they controlled the monopoly. Exactly the same thing that MS has been pulled into court for.

    So if its good enough to pull MS in on, why cant they go after teh MPAA?

    Next, the MPAA needs to
    tagline

  • Ominous Parallels (Score:3)

    by stuyman ( 46850 ) <laurenceb@NOsPAM.gmail.com> on Tuesday August 08, 2000 @09:22AM (#870746)
    What the record companies have been doing all these years is not unlike the OEM deals Microsoft would make with people. Those deals fixed prices for them if they agreed to specific terms. The Minimum advertised price, or MAP, was just a way to hurt consumers. While the record labels use the defense that the wholesale price is the same without MAPS, they fail to take into account the advertising and promo subsidies. Given those, most stores are forced to agree to the MAP deals.

    I'm glad they're going after the companies, and I hope that when the states win the class action suit against the companies that will follow can get each of us a couple of bucks for each CD we bought. We've all known that 17 bucks was way too much for something whose production costs so little, and things like Napster are mostly the result of the absurd cost of CDs.

  • Re:$18 loss leader?! (Score:3)

    by anticypher ( 48312 ) <anticypher.gmail@com> on Tuesday August 08, 2000 @10:12AM (#870747) Homepage
    Since the RIAA takes its cut, and the major labels take their cut, and the distributors take a cut, the cost of raw materials takes a cut, and finally the artists get .003 cents for the sale, then you can see where the money goes. Note that the cut the RIAA takes does not go to the artists, they get to keep 99% of the collected artists royalties for overhead. Cut out the RIAA, and force the labels to use straight forward accounting practices for royalty distribution. Then the artists will see the money they deserve. A system like that would allow many more artists to make a living doing what they love, rather than have all the money get lost on the way to them.

    CD prices are even more outrageous here in Europe, with even less money going to the artists. I'd expect the EU to follow up with a similar investigation now that the US has shown the way.

    the AC

  • Re:Read the article... (Score:3)

    by 1010011010 ( 53039 ) on Tuesday August 08, 2000 @11:39AM (#870748) Homepage
    Have you ever haggled for a CD? Thought not.

    ---- ----

  • what patent issues? (Score:3)

    by SethJohnson ( 112166 ) on Tuesday August 08, 2000 @12:12PM (#870749) Homepage Journal


    I know of no case filed by the RIAA that has touched on patent issues.


    What is it that 'SOMEONE' will come up with that will take market share away from the current record company behemoths and FORCE a reaction? I suppose you are suggesting that some enterprising startup [atomicpop.com]will offer an alternative music distribution system that will be so compelling that hundreds of entertainers will each be willing to sacrifice millions of dollars worth of potential sales in order to jumpstart this new system.

    What you're expecting is that Britney Spears will decide "Hey, I wanna fight this stranglehold the big record companies (who pay me millions of dollars) have on consumers. I'm putting out my next four albums on some untested internet distribution model. Bring me a Zima, Claude."

    And simultaneously, dozens of millions of consumers must decide they're going to not purchase the Cristina Aquillera CD because it's on Warner and isn't available as a digital download.

    Rather than waiting for this unlikely alignment of the planets to occur, wouldn't it be more effective if the government stepped in as a matter of principle and corrected the imbalance?



    Seth

  • Re:Cost of a CD -- From RIAA's Perspective (Score:3)

    by JimTheta ( 115513 ) on Tuesday August 08, 2000 @10:39AM (#870750) Homepage
    That would be all good and great, if the price of a CD was reflective of the record company's effort for that particular artist, but I bet it's not.

    Way more promo effort (i.e. money) has gone into Britney Spears and the Backstreet Boys than say, Pitchshifter or Fear Factory. But their disc prices are just about the same, even when each was first released.

    Now, that kinda tells me that the money I spent on my latest Pitchshifter disc didn't all necessarily go to efforts solely directed at selling Pitchshifter and their disc to the public. Am I helping fund the latest boy band's promotion?

    If my $18 (after compensation, manufacturing, etc.) were going totally into efforts (or reimbursement of efforts) to promote the band I just bought, I wouldn't necessarily have a problem.

    But I don't think that it is. It's going into promotion of a small handful of record-company-constructed "musicians", who, as a result of this promo machine, will make back exponentially more for the record company than they put into it. Honestly, the strategy makes sense to suits who don't care about the art. But what about a band who, if promoted properly and paid fairly, would make a decent profit that, though not on a Christina Aguilera-scale, would be decent enough to satisfy and support that band? Well, the RIAA companies don't really care, for the most part. Sure, the smaller RIAA labels do, but they're usually not rolling in cash, either. They're just owned by the big RIAA companies so that when the small labels find the 'right' band, the parent RIAA company can be ready to exploit.

    And that's why I hate the RIAA.

    -JimTheta
    ---

  • The Pros and Cons to MAP (Score:3)

    by Kagato ( 116051 ) on Tuesday August 08, 2000 @09:58AM (#870751)
    The problem with this suit is that it doesn't really help consumers. Why? Well, basically all MAP pricing has done is to keep Walmart, and Circuit City and the ilk from closing down smaller stores. These types of retailers sell the CD's under cost. It's a marketing tool to get people into the store to but high buck items.

    The record companies sell CD's to Walmart for the Same price they sell to Mucisland or some other smaller chain.

    While MAP pricing stinks I think it's really the small part of the puzzle of price fixing. Really, it's icing on the cake. And keeping companies liek Walmart in check isn't that bad of a thing.

    The real point is a effort to keep the industry wholesale prices inflated. In order for this case to work out there has to be proof that the music companies have acted together to that ends.

  • Re:But will anything come of it? (Score:3)

    by jayhawk88 ( 160512 ) <jayhawk88@gmail.com> on Tuesday August 08, 2000 @09:45AM (#870752)
    Actually in a case life that, "out-of-court-settlement"="RIAA threatened to pull all their lobbying money, states saw that the general public really didn't care they were paying $18/CD, so one of the state lawyers went over to the RIAA members, said 'Bad RIAA' and slapped them on the wrist, and all was forgotton".

    Which is exactly what will happen this time. Napster is all over the news, so a bunch of state senators and State Attorney General's got together to get a little face time on the local news, while taking a "brave stand" on a "hotbead issue" in the face of "corporate greed". And in 2 months, when consumers are still breaking their ankles running to Best Buy to get the latest Metallica album (on sale for $15.99!!!), the suit will be settled "out-of-court", and status quo will once again be restored.

  • Re:But will anything come of it? (Score:3)

    by studerby ( 160802 ) on Tuesday August 08, 2000 @10:15AM (#870753)
    Correct me if I'm wrong, but don't record companies get a cut of blank cd sales?

    You're wrong (but not totally). Under the law 17 USC 10 [loc.gov], section 1003, the manufacturer of "digital audio recording medium" must pay a royalty, defined in section 1004 as "3 percent of the transfer price", the manufacturer's wholesale price. Section 1001 defines "digital audio recording medium" as "any material object in a form commonly distributed for use by individuals, that is primarily marketed or most commonly used by consumers for the purpose of making digital audio copied recordings by use of a digital audio recording device". It specifically exempts media that is primarily used as computer media, and a computer and/or CD burner fail to meet the definition of a "digital audio recording device" (unless they're specially marketed as such).

    Last I looked recordable CDs still didn't have to pay royalties, and 3% of 40 cents doesn't have an impact even if that's changed...

  • The wired article (Score:3)

    by cow_licker ( 172474 ) on Tuesday August 08, 2000 @09:26AM (#870754)
    Here is the wired article [wired.com]

  • Re:HAW! (Score:3)

    by Paladin128 ( 203968 ) <aaron&traas,org> on Tuesday August 08, 2000 @10:31AM (#870755) Homepage

    There is a problem with this two-tiered pricing you propose: production costs. To illistrate my point, I will use Anime as an example. When you purchase an Anime title on VHS, you generally have two products to choose from: The english dubbed, or the Japanese language with english subtitles. Anyone should be able to realize that it costs significantly more money to dub the title than subtitle it, as you have to hire voice atcors, buy studio time, hire a sound engineer, etc... Yet the subtitled VHS tapes are usually $5-10 MORE EXPENSIVE! Why is this? Because the anime distributers sell 10 times more copies of the subtitled tapes.

    Enter DVDs...

    On a DVD you can store up to 8 language tracks, and 32 subtitle tracks, and switch between them dynamically. Thus, subbed and dubbed become one product, and everybody buys that one product, thus quantities go up and cost per unit goes down. The DVD's are usually the same price as the dubbed VHS.

    The point I'm trying to make is that to do the two-tiered pricing you suggest, they'd have to split the market in two. The expensive disc that contained pretty packaging would wind up costing more like $40, due to VERY limited demand. Also, they would be a "collector's" type market, which means they would be purchased regardless by a limited few, so theycould jack up the price even higher.

    Also, most of the cost of CD's is artificially inflated. Audio cassets cost a good deal more to manufacture, and only cost a fraction as much. What the RIAA is doing is building in another $8 or so because they know CD's will never wear out like a cassette will, thus you will never need to buy another.



    "Evil beware: I'm armed to the teeth and packing a hampster!"

  • C'mon. Nobody's promoting Cyndi Lauper anymore. (Score:4)

    by Anonymous Coward on Tuesday August 08, 2000 @10:04AM (#870756)
    Amount to promote ~= $17,000,000

    Why do the CDs of old stuff still cost the same as the ones keeping the marketing staff busy?

    Your argument has holes in it.

    Oh yeah: "Doom I,II,III, Descent I,II, Diablo I" All $4.95 in the clearance bin. That's 90% off the original sale price for software a few years old. Where's the 90% off an all 80 music?

    10 Repeat after me: They're gouging us. Goto 10

  • Doubtful... (Score:4)

    by Danse ( 1026 ) on Tuesday August 08, 2000 @11:34AM (#870757)

    I have serious doubts about the artistic effort being among the most significant chunks of the cost of a CD. Typically artists get only a very tiny fraction of what each CD sells for. I'd love to see some real numbers on this. The industry made $15 billion in profit last year. Doesn't sound like they're having a tough time of it to me. There's no way in hell I'm going to take their word for it. I want the full investigation done. They aren't telling us everything, you'd be a fool to believe they are.

  • Absolutely correct. Why should the record companies have to watch their spending? After all, large parties, extremely pricey advertising and the costs of keeping non-signed bands off the charts are of vital importance.

    If the record companies actually had to worry about receiving income, they might start having to satisfy the customer. Satisfying the customer would be a bad thing... Right?

    Seriously though, by not having to worry about what bands they pick up is a bad thing. You get artists that are nothing more than advertising tools that the media companies create themselves. Putting a little responsibility into the equation would probably help stop record companies from deciding what they want to sell and instead focus on where the customer base wants to take the market.

    Keep in mind that the worst thing that the record companies did to themselves recently was not supporting Hip Hop, that opened the door for a lot of independant publishers and started the move to liberate the music industry.

    Lando

  • Re:Cost of a CD -- From RIAA's Perspective (Score:4)

    by Daffy Duck ( 17350 ) on Tuesday August 08, 2000 @10:24AM (#870759) Homepage
    Between 1983 and 1996, the average price of a CD fell by more than 40%. Over this same period of time, consumer prices (measured by the Consumer Price Index, or CPI) rose nearly 60%.

    Nice choice of years. Now try this one, taken from RIAA's own U.S. market data report [riaa.com]: between 1990 and 1999 the average cost of a CD rose by 13%. And yet, sales volume continues to grow by 10% annually. Isn't it a shame that piracy is destroying the CD market?

  • $18 loss leader?! (Score:4)

    by Mike Schiraldi ( 18296 ) on Tuesday August 08, 2000 @09:21AM (#870760) Homepage Journal
    At that time, large department stores and consumer electronics retailers began
    selling CD's below cost as a ``loss leader,'' in an effort to get people into the
    stores to buy big-ticket items, labels said.

    Someone's got to have a really inefficient distribution system if they can't make money off a $18 CD.
    --
  • ...sued Microsoft? What is it with these 28 states? Did all the Attorneys General go to the same law school or something? I don't get it, why would only 28 states sue? Do record and softare companies only operate in these 28 states? If anyone has any enlightenment to spread, I'd much appreciate it...

  • Force and fraud (Score:4)

    by 1010011010 ( 53039 ) on Tuesday August 08, 2000 @11:55AM (#870762) Homepage
    The government is supposed to protect citizens from force and fraud. Price-fixing is not good capitalism, it is a type of both force and fraud. Price-fixing distorts the market, preventing people from being able to freely negotiate price. Therefore it is a legitimate function of government to prevent price fixing -- along with other acts of collusion and conspiracy -- from happening.

    ---- ----

  • Re:But will anything come of it? (Score:4)

    by jheinen ( 82399 ) on Tuesday August 08, 2000 @09:43AM (#870763) Homepage
    But RedHat is also available as a free download. Which one I get is my choice. If the record labels offered a choice, either pay $18 for the CD, or download the mp3 for free, then there would be no problem.

    Besides, RedHat isn't charging just for the media. They are charging for the customer support you get when you buy the boxed product, as well as a set of printed manuals.

    -Vercingetorix

  • Re:But will anything come of it? (Score:4)

    by TheReverand ( 95620 ) on Tuesday August 08, 2000 @09:27AM (#870764) Homepage
    Ok, I for one am fully in favor of this lawsuit, but please don't make the mistake of saying that $.30 is all it takes to make a CD. A professional album costs upwards of $100,000 to record. Plus advertisements, plus distribution, plus the amount of money the industry "eats" for all the bands that don't sell. Don't forget for every Spice girls there are 100 bands that get printed, promoted and distributed and never sell crap. CD's should be cheaper, that is for sure, but your argument just doesn't cut it here.

  • Re:A couple questions (Score:5)

    by Silver A ( 13776 ) on Tuesday August 08, 2000 @09:52AM (#870765)
    My question is, why were they doing this? Why would juggernauts like Sony and Warner Brothers do a damn thing to help out small stores at the expense of huge business partners like Wal-Mart? What was in it for them?

    Because business "partners" like Wal-Mart are too powerful for Sony and WB's taste. Mom'n'Pop have to take the prices that the record companies charge; Wal-Mart can tell Sony how much they're willing to pay, and cut off a significant amount of their sales by not accepting a higher price.

  • Inevitable given the Attention (Score:5)

    by Badgerman ( 19207 ) on Tuesday August 08, 2000 @09:25AM (#870766)
    Considering how the Napster lawsuit focused the public eye on record companies (the Napster lawyer, Courtney Love's salon.com article, etc.) this was inevitable.
    1. The public knows how the record companies have shafted people and won't be sympathetic.
    2. The states know the record companies have shafted people and smell a chance to make money and/or impress the public.

    The companies shined attention on themselves by going after Napster, and I rather imagine they aren't enjoying the results now.


    Don't expect this to be the last lawsuit either - you know that once people smell an easy target, those things multiply.

  • Negativland essay (Score:5)

    by Kevin T. ( 25654 ) on Tuesday August 08, 2000 @09:30AM (#870767) Homepage

    An essay describing the history of CD manufacturing and price-gouging can be found at:
    http://www.negativland.com/minidis.html [negativland.com]

    Lots of other information on the record industry, copyright, and intellectual property issues is available on their site.

  • quoted verbatim (Score:5)

    by adimarco ( 30853 ) on Tuesday August 08, 2000 @10:10AM (#870768) Homepage
    This comment is quoted verbatim from an RIAA website. The original page can be found here [riaa.com].

    Frankly, this is a big load of shit, and doesn't deserve a +2 insightful ;)

    Anthony

  • Well, this is certainly interesting (Score:5)

    by revscat ( 35618 ) on Tuesday August 08, 2000 @09:22AM (#870769) Journal

    A careful consideration of the facts in the case, as well as the legal precedents set forth beforehand can lead to only one reasonable reaction to this decision by the states:

    BWAAAAAHAHAHAAHAHAHAAHAHAHAHA!!

    You fucking greedy bastards! We knew it all the time! You have absolutely no moral authority to tell Napster users what to do when you're criminals in your own right! Take a long walk off a short cliff, you RIAA scum!

    Wow, that was totally juvenile. But I feel SO much better.

    - Rev.

  • Re:But will anything come of it? (Score:5)

    by xtal ( 49134 ) on Tuesday August 08, 2000 @09:38AM (#870770)

    One might also argue that the advertising and distribution might not be necessary but for the big name labels and their promotion of crap like the Spice Girls. How many ads have you seen on TV for Johnny Welfare Garage Band? Not to many. You might have seen them in your local pub though - and the RIAA didn't have diddly to do with that.

    I can't quote you what a recording session at a studio costs, but I would hazard a guess you can get reasonable work done for less than 100 kilobucks - maybe 25? That's not a justification for record prices as I see them. Especially given most artists only see a few dollars at most - and all those promotions, ads, and radio play are taken off THEIR cut - because that money was an advance from the label. Hole had a pretty good rant about that (linked of some /. article last time we all debated this).

    The industry is a crock of shit and screws over a lot of people that care about their music. Don't think otherwise. They're scared shitless the internet is going to take away their "distribution model" aka "gravy train", and all the power to them.

    Ever ask yourself why you can't walk into Sam's with a Rio, download a song for $0.50, and walk out?

  • Government Intervention (Score:5)

    by JohnG ( 93975 ) on Tuesday August 08, 2000 @09:42AM (#870771)
    Alot of people complain when they see the government doing something like this. They say that the government is sticking it's nose where it doesn't belong and such. I think that you have to step back and look at the whole picture. I for one am comforted by the fact that I live in a country/state whose government looks out for the rights of the people. Sometimes they might do something "for us" that we don't agree with, but it's better than them doing nothing for us at all.
    As far as this case goes I am glad to see it happen. I think that the whole Napster ordeal should have been a clue to the RIAA that they need to lower their prices but it wasn't. Though the record companies might not see it this way, this case is going to help them. If the prices are lower people might not feel the need to pirate. And if you sell more product, even at a lower cost, you can still make more money.
    Besides this issue has been huge, Napster versus RIAA is huge. The government has already been made involved by the RIAA and thier actions against Napster, if they don't do something that could stop the madness, then they will have to put up with Napster cases until the end of time. Just be thankful that they are doing something that helps us instead of something that hurts us... like shutting down anything with the name MP3 in it.

  • Re:Price fixing, shmice fixing (Score:5)

    by Ian Wolf ( 171633 ) on Tuesday August 08, 2000 @10:39AM (#870772) Homepage
    Oh joy, yet another US-centric article griping about imagined flaws in the American legal system.
    Did it ever occur to you that Slashdot is based in the US and is obviously going to be a little slanted in that direction? This is news that is happening in our "backyard", its important to us.
    When I see an article about things going on in France or England or anywhere else in the world, I look at it as an opportunity to learn a little about the problems facing the people and the country. I don't make an annoying post about how much coverage that country has been getting lately.
    Furthermore did it ever occur to you that all legal systems are flawed and that only through critical discussion can those flaws be found. Its much more productive to discuss the problem then to whine about it.
    Price fixing is normal in other countries, and, believe it or not, none of them have been taken over by massiv evil corporationsy et.
    Well now that's settled we'd might as well start homogenizing the world. What's good for one country must be good for everyone.
    Come on! There are a lot of things in this world that are completely normal in one country, but are completely alien to others. Some of us call it culture, and some of us even respect other people's culture.
    Whether or not Price Fixing is normal in Japan is irrelevant. In the US its illegal, and as long as its illegal we as citizens and consumers have a right to ask that the law be upheld. We aren't always listened too, but it certainly is nice when we are.
    For example, many sectors of Japan's economy are controlled by huge monopolies (yes, including the record companies), and people the world over look up to Japan's amazing economic success.
    Some people look up to Microsoft too. Some people thought what Adolf Hitler did with Germany in the Pre-World War II days was something to look up to. He even got Time's "Man of the Year". You know what though? The end doesn't justify the means.
    It's only when the government tried to deregulate the economy that it crashed.
    Isn't oversimplification grand. I suppose that the Boston Tea Party was the only cause of the American Revolution. That the invasion of Poland was the only reason World War II got under way.
    Price fixing is not the end of the world.
    No it isn't, but it is illegal.
    Sure, it might mean higher prices for consumers,
    Which is precisely why it is illegal.
    but it doesn't mean that there's some huge illuminati-like conspiracy out there trying to "get" consumers.
    Damn, did I walk into a Katz article by mistake..
    So you have to pay more for a crappy CD. Who cares? Price fixing happens -- get over it!
    Another brilliant statement.
    Cop: "I'm sorry Mrs. Smith, but murder happens, you'll just have to find another husband and get over it."

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