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The Almighty Buck

Music Industry Pays $67M Fine For Price Fixing 511

Krelnik writes "Reuters is reporting that the music industry is paying a $67.4 Million settlement to end a lawsuit where they were accused of artificially inflating CD prices at retail. Yeah, P2P is causing their problems. Sure, sure it is. Here's the story at Reuters UK."
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Music Industry Pays $67M Fine For Price Fixing

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  • Ok, so it costs like $15 for a CD, even though there is so many different artists out there. Give me a break RIAA, I buy your CDs, least you could do is offer me some sort of a deal.
    • $15 not at your sam goodie or musicland. $15 is onsale everything else is like $18 and up....
    • NOT AT ALL (Score:3, Funny)

      by FunkyELF ( 609131 )
      Columbia house will offer you a dead :)
      All kidding aside though, it really isn't a suprise at all. Have you ever seen a CD cheaper than the same thing on a tape? It costs them under a penny to produce a CD in under a second while it costs bundles to mass produce tapes. If tapes and cds were the same price, i wouldn't say anything. If tapes were 50 cents more than a cd, i wouldn't say anything, but when you charge more for something that costs less to produce just because of its superior quality some will say its 'whatever the market will bear', while others call it price fixing.
      P2P is awesome, nothing will be done to stop it. What is File and Print Sharring or running an FTP server if not P2P? P2P will hopefully take enough money away from the record industry that we will be able to go from
      a: choosing an $18 CD from the 200 or so artists that have been played on the radio/mtv in the past year
      b: choosing a $5 CD from 5,000 artists who make equally good music but don't lip sync too well N'Suck or have a face good enough to paste on top of porn star bodies and post all over the internet Britney or can play awesome live shows but don't have hollywood making million dollar videos for their lame music Lincoln Park.

      Hopefully we will get more variety and less MTV / Hollywood bullshit in our music.

      I'm just waiting for a similar lawsuit to follow for Hollywood charging ridiculous prices for DVDs just because they contain footage that wasn't good enough to make it in the actual film....Tell ya what, how about I pay $20 for the DVD without any extra crap, and if i feel the urge to hear it in Pakastani or want to watch some deleted scenes, i'll come back and buy the other half for another 10 bux.

      I'm just rambling, its late...But as far as the music industry goes,its right up there in the list of things that have power which shouldn't...Microsft/MTV/AOL/Bush goodnight bedtime
      • Re:NOT AT ALL (Score:4, Interesting)

        by Gonarat ( 177568 ) on Tuesday October 01, 2002 @08:40AM (#4366285)

        Actually Hollywood has been doing a better job of pricing DVDs than the RIAA has been with music. I have been able to pick up LOTR, Harry Potter, and Monsters Inc. (yes, I have a kid) all for (well) under $20.00 -- and Monsters Inc. was $14.88 (DVD OR VHS Tape) at Wallyworld (Wal*mart). I was also able to get War Games for under $10.00.

        New Music CDs are $13 to $15 and old CDs run just as much! No wonder the RIAA's sales are down -- My 11 year old Daughter would rather spend her $15 on a DVD instead of a CD -- she gets more out of the DVD and she had grown bored with Britney and the boy bands. The only way the RIAA is going to get more of her (and her peer's) money is better music and lower prices. DVDs, PS2, and Gameboy Adavance is beating Music out in the battle for the pre-teen dollar.

  • Great timing. (Score:4, Interesting)

    by neoform ( 551705 ) <> on Monday September 30, 2002 @10:30PM (#4364623) Homepage
    they've been fixing prices for how long? and it took till now for a suit like this to win.. let's hope it's not the last.
    • RIAA's next move? (Score:5, Interesting)

      by ABetterMan ( 579589 ) on Monday September 30, 2002 @10:36PM (#4364663) Homepage
      I would expect their next move would be to work a bit faster with MS, and get DRM pushed out there. While looking through Windows Update, I noticed Windows MediaPlayer v7.1 [] has DRM [] - and you can't uncheck the box for it. If you want Media Player 7.1+, you have no choice but to install the DRM portion along with it, or not install the player at all. Perhaps MP v7.1 is non-reversable - once you install it, you can't downgrade. I dont know if that is the case, but I'm not particularly in the mood to be a guinea pig, at the moment.
      • Re:RIAA's next move? (Score:5, Interesting)

        by littlerubberfeet ( 453565 ) on Monday September 30, 2002 @10:39PM (#4364681)
        You could get a mac. I have had absolutly no problems with itunes.....AND you can digitize from an analogue input. So output on a standard CD player, then digitize........
      • I don't know about you, but if you are SO concerned about not being able to play your own cd's if you move computers and/or reformat, here is the solution (at least with Windows Media Player): 1) Open up media player 2) Go to the tools menu, License Management 3) Click on "Browse", choose a location then click "Backup" 4) Follow the instructions Voila! To play your content in another computer, repeat the procedure, but instead use "restore".
    • Re:Great timing. (Score:4, Insightful)

      by homer_ca ( 144738 ) on Monday September 30, 2002 @10:46PM (#4364714)
      They were accused of using a minimum advertised pricing (MAP) policy between 1995 and 2000. In 2000 they settled an FTC lawsuit by agreeing not to use MAP for 7 years. Since then I've seen more and more new releases advertised for $11.99-12.99, but full retail price on CDs is as expensive as ever; you'll be lucky to get change out of a $20 after tax.

      I like this bold prediction from the article:

      "Former FTC chairman Robert Pitofsky said at the time that consumers had been overcharged by $480 million since 1997 and that CD prices would soon drop by as much as $5 a CD as a result."
    • Re:Great timing. (Score:3, Insightful)

      They already lost a similar lawsuit in the early 90's.

      It resulted in a 3 dollar increase in CD prices.

      I wish I had a link to a historical reference to the previous lawsuit. I have plenty of faith that CDs will now cost nearly $25 apiece, esspecially as DRM starts to make a strong foothold in the marketplace.
  • It's about time. (Score:2, Interesting)

    by CrystalCut ( 307381 )
    I've been hearing about this issue for years, literally! One wonders, however, about the timing of this decision. The music industry is not seen in the best of light right now, and I wonder if they belive this will improve sales. Or maybe I am just paranoid.

    • Eh? As I see it, it would hamper sales. If I'm Joe-consumer and the guv'ment tells me that I'm paying too much for CDs, I'm probably going to spend my tax refund on a new redwood deck trailer for the trailer, no the latest Brittany Spears album. Got's to get a good deal at the Wal-Mart, right Ma?
  • Out of curiosity... (Score:5, Interesting)

    by Sheetrock ( 152993 ) on Monday September 30, 2002 @10:31PM (#4364630) Homepage Journal
    I know that seems like an awful lot of money, but does it even approach the amount the industry gained through its unfair practices?
  • by WildBeast ( 189336 ) on Monday September 30, 2002 @10:32PM (#4364634) Journal
    Do I get any part of that amount?
    • by billbaggins ( 156118 ) on Monday September 30, 2002 @10:38PM (#4364672)
      Probably not if you're from a country where "checque" is standard spelling. From the article: "The settlement will go to all 50 states, based on population. Consumers may be able to seek compensation."
      • by phorm ( 591458 )
        Cheque in Canada. One thing bugging me, what happens to those not in the states who have equally been screwed by RIAA price-fixing?

        The cash settlement will be paid to the 43 states. The companies also agreed to distribute $75.7 million worth of CDs to public entities and nonprofit organizations in all 50 states.

        From this it sounds like they're giving out CD's instead of cash. Shitty deal, 'cause they'll probably just give out worthless CD's anyhow. We can have RIAA coasters to go along with the AOL ones.

        Regardless, sounds like a good arguement against the "P2P is the reason nobody buys CD's"

        The RIAA made me do it - phorm
        • by IPFreely ( 47576 )
          The RIAA Was sued in US courts for violating US Anti-trust laws. If you want the RIAA to pay up in your country, you have to sue them in YOUR courts for violating YOUR laws.

          Do you have any applicable laws?

    • WHAT!?!?!?! (Score:5, Funny)

      by Eric_Cartman_South_P ( 594330 ) on Monday September 30, 2002 @11:25PM (#4364902)
      They don't even give money to the Artists, so I don't think you're going to get any.

    • You will see your part when they raise prices to pay the fine :)
  • by Komrade S. ( 604620 ) on Monday September 30, 2002 @10:33PM (#4364639) Homepage
    I'm sure the RIAA will be quite upset at losing that less than 1% of their annual income. Poor sods. But I think if judgements continue like this, and that moronic bill for "P2P warfare" is dropped, a real dent might be made in the RIAA's empire of art commodification.
    • by dasunt ( 249686 ) on Tuesday October 01, 2002 @07:13AM (#4366051)

      I have a theory that what geeks need is a large advertising budget. We need commercials on TV that tells our side of the story.

      Imagine it...

      View of a long haired pale man hunched over a keyboard
      Johnny is a hacker. But he doesn't live in his parent's basement. He doesn't work for an evil foreign government. He's not part of a group that spells their name with numbers. No, Johnny works for the record companies. Under a proposed US law, Johnny will have the right to hack into your computer and break it. The record companies are very concerned with getting the ability to hack your computer - even though they aren't concerned about lower CD prices. They were recently convicted of overcharging Americans roughly half a billion dollars for CDs.

      See, we need an agency to mix the FUD our way. :)

  • hrm (Score:5, Insightful)

    by carpe_noctem ( 457178 ) on Monday September 30, 2002 @10:33PM (#4364640) Homepage Journal
    Is it just me, or does this seem like a reallllly low amount of money for a settlement in a judgement this serious? Not to complain about the victory, but shouldn't this have much greater consequences than what ultimately boils down to a weekly paycheck for these CEO's?
    • Re:hrm (Score:5, Insightful)

      by Anonymous Coward on Monday September 30, 2002 @11:02PM (#4364795)
      Well, the $67 million has to come out as a lump sum, and has tax implications. So, in a sense, the department that has to pay out the fine is so far removed from the line item where the extra profits went, that it might actually be a sore spot that could drive change from within.

      I know if I were on the board of directors, I'd be asking for the head of the person who cost me this fine, and getting something signed in blood by the people who I can decapitate if it happens again.

      And something like that is going on where the left hand paid the $67 mill, with regard to the right hand that caused the damage. This is probably the first time left and right hands have actually met in that organization. How fitting that it happens today, in a climate where suits begin to actually fear consequences of their actions!
    • Re:hrm (Score:3, Interesting)

      by garcia ( 6573 )
      I guarantee that the settlement for P2P is going to be over 100 million.

      P2P actually saved the consumer money during the price fixing and we are going to end up paying for it in the long run.
  • by pussycat ( 206606 ) on Monday September 30, 2002 @10:34PM (#4364641)
    Let's write a law to make it legal to hack* RIAA lawyers when we suspect them of "pirating" our money.

    * hack meaning to chop into little pieces
  • by ( 531040 ) <> on Monday September 30, 2002 @10:34PM (#4364645) Homepage
    Isn't this the amount they spend on promoting N*suck during the superbowl? They will just regain the cost of the fine when I pay the $21.99 for the new Brittany cd anyways!
  • only 67M? (Score:4, Insightful)

    by motardo ( 74082 ) on Monday September 30, 2002 @10:35PM (#4364653)
    That seems like peanuts compared to how much they're ripping off the artists and us, the consumers who buy their crap.
    • So don't buy major label crap. Do yourself a favor and support indie artists and labels and your local music scene.

      A lot of people here on slashdot would talk for days about how much they hate the RIAA, but they won't do a thing about it. Discover some new music, find a new favorite band, get some friends together and go to a show, do anything but let the RIAA get bigger and bigger.
    • Re:only 67M? (Score:5, Insightful)

      by BrookHarty ( 9119 ) on Monday September 30, 2002 @10:50PM (#4364731) Homepage Journal
      I was thinking that also, they overcharged $480 million, and only had to pay back $67 million.

      Gotta love that logic.

    • This is common, the lawyers sue and settle for way less than they should because they are payed a percentage. I think tort reform should include only paying lawyers only out of punitive damages unless the class votes for the settlement.

      This should have been a 2 billion dollar cash settlement. 480M*3(cartel)+500M(punitive). Though I'm more partial to the corparate death penalty, we need some serious tort reform to increase settlements if we want to keep the current system working.

      This is like those car safety lawsuits where you get a coupon for buying another crappy car from the same company. Yeah Right!
    • Re:only 67M? (Score:4, Insightful)

      by Sarcasmooo! ( 267601 ) on Monday September 30, 2002 @11:39PM (#4364959)
      AND it was split between the different labels AND retailers involved, AND the settlement was called a "good business decision" by a Warner Bros. representative, AND they didn't have to admit any wrong doing.
      • Re:only 67M? (Score:3, Insightful)

        by quintessent ( 197518 )
        they didn't have to admit any wrong doing


        So they can sue hundreds of millions out of for letting people listen to their own music, but when the record companies cheat consumers, they didn't do a thing wrong. Yuck.
  • by questionlp ( 58365 ) on Monday September 30, 2002 @10:35PM (#4364654) Homepage
    From the USA Today article:
    The companies, including Universal Music, Sony Music, Warner Music, Bertelsmann's BMG Music and EMI Group, plus retailers Musicland Stores, Trans World Entertainment and Tower Records, admitted no wrongdoing.
    Since they still think that they are in the right and probably still want to fix the prices of CDs somehow.

    They are just paying their way and donating CDs to certain organizations just to say drop the suit... that's it.

    • From the article: "The companies have not practiced the pricing agreement since 2000. At that time, they agreed in settling a complaint by the Federal Trade Commission that they would refrain from MAP pricing for seven years."

      So, yeah. Figure they'll be back at it in about seven years. Honestly... some times the US gummit just lays down and dies [].

      • What dumbfounds me is that what they were doing was deamed illegal, so they cannot do it for seven years. What the fuck is that? How can it possible be acceptable 7 (5 now?) years from now to builk customers out of another $480,000,000

        I am confused
  • by Anonymous Coward on Monday September 30, 2002 @10:35PM (#4364659)
    The five largest music companies and three of the USA's largest music retailers agreed Monday to pay $67.4 million and distribute $75.7 million in CDs to public and non-profit groups to settle...

    75 million in CDs? So what's that buy nowadays, 20, 30 CDs?
  • It had to happen (Score:3, Interesting)

    by prichardson ( 603676 ) on Monday September 30, 2002 @10:35PM (#4364660) Journal
    Finally, someone figured out that:
    1) Cost to profuce cd's is probably less than $1/CD including case and linear notes, excluding production costs.
    2)The cost of CD's, with everyone making substantial profit could be $3.50
    3)The only way for the prices to be so artificially high was for price fixing.

    I know I would buy more music if it came at a reasonable price.

    Maybe someone in the software industry will realize that: more people will buy this if we only charge $20 for it!
    • by MaxVlast ( 103795 ) <> on Monday September 30, 2002 @10:41PM (#4364688) Homepage
      Have you seen the headquarters of Sony Records? Potted palm trees aren't cheap, mister. Think of the trees!
    • cost of recording studio time? cost to have an office to sign contracts (and make indentured music servants)? cost of advertising?

      It's not as simple as just charging for the plastic and paper that make the CD. Though I seriously doubt it is anywhere near $14 or whatever CD's are going for today - I usually just make an xmas list for the family as ideas and get my music once a year.
      • You're confusing amortized capitol costs with marginal costs. Marginal costs for each additional CD once you've paid for the up-front costs is probably less than a dollar. But you've probably got to sell about 100,000 CDs to pay back the production, advertising and distribution cost (note that they pay the independents about $100,000 per album to bribe the radio stations for air time). So what you're really paying for when you drop you $17.99 down on the counter is all the albums that sucked so badly they never paid back the production costs. Sort of like your credit card -- 3% interest is to cover the minimum incentive for a lender given no risk, while the other 15% is to pay for everbody that files bankruptcy and leave the credit card company holding the bag.
  • When the RIAA asks for anything else from the goverment to protect it's IP, the goverment will say "uh yeah, go away please..."

    One can always wish...
  • Priceless... (Score:5, Insightful)

    by Cutriss ( 262920 ) on Monday September 30, 2002 @10:37PM (#4364667) Homepage
    "This is a landmark settlement to address years of illegal price-fixing," Spitzer said in a statement. "Our agreement will provide consumers with substantial refunds

    No it won't! The suit was filed two years ago. $67.4M divided over all the CDs distributed by the labels ends up being fewer than pennies per consumer. At best, I'd expect little more than a $5 coupon off my next overpriced music purchase. The settlement also doesn't do anything to address future infringement.

    and result in the distribution of a wide variety of recordings for use in our schools and communities."

    Not under today's Fair Use [] laws...
  • $480M vs $67M (Score:4, Insightful)

    by Tomy ( 34647 ) on Monday September 30, 2002 @10:38PM (#4364673)
    Let's see, consumers were overcharged $480M and the fine was $67M?

    Well now we know what step two is:
    Step one, rip off consumers.
    Step two, settle out of court.
    Step three, $413M profit!
    • Re:$480M vs $67M (Score:5, Interesting)

      by leviramsey ( 248057 ) on Tuesday October 01, 2002 @12:28AM (#4365164) Journal


      The RIAA did not make a cent off the price fixing, as that had no effect on wholesale prices. What the RIAA was doing was to say to the chain stores, "you can't advertise the new Britney CD at less than a certain amount over wholesale". Why was this done? To prevent the Wal-Marts and Best Buys of the world from monopolizing CD retailing and using their distribution might against the RIAA. It's in the RIAA's interest to keep as many non-chain and small chain stores around as possible, as it prevents WalMart from holding CDs for ransom (as in, "we won't buy the CD for our stores unless you sell it to us for $2 less than normal wholesale").

      The $480 million that consumers overpaid went to CD retailers, not the RIAA.

      • Re:$480M vs $67M (Score:5, Insightful)

        by 7-Vodka ( 195504 ) on Tuesday October 01, 2002 @04:20AM (#4365714) Journal
        omg.. To see someone make such a bold mistake... and a UMASS student on top of it..!!! EEEK!!.

        1. You manage to contradict yourself in ONE SHORT POST:
          "The RIAA did not make a cent off the price fixing, as that had no effect on wholesale prices."
          "won't buy the CD for our stores unless you sell it to us for $2 less than normal wholesale"
          Erm.. so better retail price competition will affect wholesale price and yet wholesale price is not affected. Bravo!
        2. You allowed your head to be spun by the RIAA's lies (on purpose?). The very fact that wholesale prices are inextricably tied to retail prices (can't sell for $10 what you're buying for $14) means that wholesale prices were also allowed to be held high.
        3. Unless you live on another planet you must realize by now that the music industry is an example of when the middleman holds more power than the producer and the consumer put together. I don't think they need you to come to their defense, they have $1.00x10^7(8?) for that.
        4. oh, and most important of all never, ever start your point by calling someone an idiot if you want to be taken seriously. It's not much to ask for a little politeness. Especially when you turn out to be wrong, then you just feel like an ass. I'm an UMASS student too. Please, I have limited bandwith due to oit shenanigans, don't make me use it to read an UMASS studen't making an ass out of himself.
  • this is good news (Score:5, Interesting)

    by GoatPigSheep ( 525460 ) on Monday September 30, 2002 @10:38PM (#4364675) Homepage Journal
    so where do I pick up my compensation check for getting screwed over for all these years?
  • They are distributing the payoff (whoops, I meant settlement) to the local libraries here in Oklahoma []

    Not a bad use in my opinion but maybe they should make the libraries buy 2nd hand cd's and allow people to check them out. That might get the RIAA's attention. Payback can be such a bitch.
    • They do that at my local lib. Except that it is not second hand CD's (yup, brand spanking new) and you get them for two weeks with unlimited refunds. I know a guy who went to the library, checked out the max (15 @ a time, I think) took them home, ripped them, then burned to mp3 cd. So what should they do now, sue the libraries?
  • fit penalty? (Score:3, Insightful)

    by Slowping ( 63788 ) on Monday September 30, 2002 @10:39PM (#4364682) Homepage Journal
    So is this $75.7 million worth of CD donations based on the price before or after the gouging?

    In seriousness, it says in the article "consumers had been overcharged by $480 million since 1997." I don't know what the other details are, but it seems that the penalty is just a slap on the wrist since it barely adds to $200 million. Isn't that half of what they gouged? They still made off with a ton of cash. Where's the hurt?
  • by Anonymous Coward on Monday September 30, 2002 @10:40PM (#4364686)
    Yeah right. When hell... hey wait a minute - massive climatic change []? Maybe there is hope...
  • by YrWrstNtmr ( 564987 ) on Monday September 30, 2002 @10:46PM (#4364711)

    The music industry has been ripping us off (no news there) to the tune of $5 per CD.
    The have to pay up $67 mil + $75 mil to non-profit, etc.

    Who the hell gets that $67 mil? I want my cut!
    ~50 CD's over the last few years....where is my $250?
  • The five record labels -- Vivendi Universal's Universal Music Group, Sony Music, Bertelsmann AG's BMG Music Group, AOL Time Warner Inc.'s Warner Music Group and EMI Group PLC -- and the three retailers, Musicland Stores Corp., Trans World Entertainment Corp. and Tower Records, agreed to stop using MAP policies as part of the settlement.


    Brad Maione, Spitzer's spokesman, said the companies would not admit any wrongdoing.

    bullshit^2 and abdication/autoabsolution in the same sentence. There is no way this "settlement" can be viewed as anything less than an utter failure. Mariah Carey's contract was purchased [] for more than one third of this settlement IN CASH, not in the distribution of recordings for our schools and communities, just to get her to stop singing. Give me more bull.

    This is a landmark settlement to address years of illegal price-fixing, New York Attorney General Eliot Spitzer said in a statement.
    This is not a landmark. It ain't even a bookmark. Read the article and boggle at the audacity.
  • Before p2p (Score:2, Interesting)

    by ekephart ( 256467 )
    This lawsuit looks like it was brought before P2P and before Napster was big. If CDs were priced fairly to begin with I wonder whether file sharing would be AS big. No doubt file sharing would be big but its growth might have been slower and easier to contain. IMHO the RIAA dug (and is digging) its own grave.
  • Great (Score:5, Insightful)

    by Evangelion ( 2145 ) on Monday September 30, 2002 @10:51PM (#4364738) Homepage

    So now the local indy shops that can't match the $8 a CD that the big chains can sell for will go under. They're already more expensive, but it just got pointless for them to even try.

    It'll be like bookstores all over again.
    • No the local indy shops will continue to do what they do best sell GOOD and hard to find music, focus on what the customer wants, and build lasting relationships for steady sales. Wal-mart might rake in more at 8 bucks but they'll get no loyalty from their customers. And no love from the real music fans.
      • Re:No No No (Score:2, Insightful)

        by Evangelion ( 2145 )
        No the local book shops will continue to do what they do best sell GOOD and hard to find books, focus on what the customer wants, and build lasting relationships for steady sales. Barnes and Noble or Chapters might rake in more at 33% off the cover price of bestsellers but they'll get no loyalty from their customers. And no love from the real book lovers.
      • That's the truth. I always go to Last Chance (my fave Memphis record shop) when I want new music. They have a good variety of good (subjective) music, and the employees can usually make decent suggestions based on what you're looking for.

        The last time I bought music in a chain was when I got Britney Spears for my 6yo daughter, and that was because Last Chance didn't have it. My daughter did see some all-girl punk vinyl that she wanted, though. There's another plus, helping good kids get away from bad music :)
    • Re:Great (Score:4, Insightful)

      by dirk ( 87083 ) <> on Monday September 30, 2002 @11:20PM (#4364875) Homepage
      So now the local indy shops that can't match the $8 a CD that the big chains can sell for will go under. They're already more expensive, but it just got pointless for them to even try.

      SO people complain when CDs are too expensive, but also when they are too cheap? The CD manufacturers no longer have any control over how much Best Buy et. al. charge for their CDs. The chains like that can afford to take a loss on CDs because their hope is to get people in the door and sucker them into buying some other, more expensive, item. The RIAA actually tried to get them not to sell their CDs at a loss, since it was hurting other CD outlets, but the chains took them to court and won. So you can either complain about the RIAA making prices too high, or the chains making prices too low, but you can't complain about both.
      • Re:Great (Score:3, Funny)

        by Evangelion ( 2145 )
        SO people complain when CDs are too expensive, but also when they are too cheap?

        You mean there aren't supposed to be different people in this world? With different opinions, even?

        Damn, I must have missed the hivemind meeting.
    • I can find some odd stuff at the local stores - and those are just the employees ;) good people.

      But I think what helps them is the used CD's. They may pay me $2-4 for a CD and resell it for $8. Hopefully that'll help support them for also promoting local and non mainstream stuff.

      One might argue this rips off the musician - sorry they won't get their $0.50, but hell...most of the stuff I'm shopping for you can't find on the shelves anymore anyway.

      There are a few obscure, non-mainstream bands I like - and I try to buy the CD's right from their website if possible, hoping it'll generate max revenue.

      Same as above with used books, except it's hard to buy the book straight from the author.

  • Curiously enough... (Score:5, Interesting)

    by Idarubicin ( 579475 ) on Monday September 30, 2002 @10:56PM (#4364761) Journal
    ...I have noticed that the same CD's for sale in my native Canada selling for $18.95 are priced at about the same dollar amount south of the border.

    This would at first blush seem perfectly reasonable, until one notices that one United States dollar buys about $1.58 Canadian. That's right--CD's are typically about 50% more costly as soon as you go from Windsor to Detroit.

    Granted, I've noted a similar pricing trend with some other goods--groceries come to mind. But for non-perishables, the price disjoint is quite stunning.

    Is it price fixing? Or plain old-fashioned gouging? All I know is that for a ten-cent piece of plastic, that's quite a markup. Charge what the market will bear, and hope nobody notices that the neighbours are getting a 30+% discount. Does anybody know if there are any retailers taking advantage of this price difference? Buy Canadian, sell American, pocket the difference. (Whatever you do, don't write a post containing the phrase "3. Profit!!!")

    • by coupland ( 160334 ) <[dchase] [at] []> on Tuesday October 01, 2002 @12:04AM (#4365065) Journal

      Actually I'm Canadian too and found that in Canada, the U.S., and the U.K., for a basic meal you can expect to pay about $10 CAD, $10 USD or 10 GBP respectively. Considering there are about 2.5 Canadian dollars to the British pound you see that in Britain a meal "costs" about 2.5 times as much. But this is mostly elementary since their pay cheques (not checks!) are also paid in British pounds so there's no discrepancy unless you're a tourist. It's not really a matter of price gouging, simply of exchange rates and inflation.

      What's more interesting is that a CD typically costs $20 to purchase yet a cassette tape costs around $10. Yet the cassette costs much more to make! (Cassettes are recorded, CDs are pressed on a high capacity assemply line.) This means that recording companies can turn a profit at $10 with higher cost of materials, so why the $%^@ do they charge us $20? This is the price fixing.

    • by HaggiZ ( 68526 )
      I actually posted a story on this a fortnight ago. The local national radio station here (Australia: JJJ) run a story on the 19th of last month from memory outlining how the Australian Wholesale Music Distribution industry was achieving record highs in sales, but ARIA (the Australian RIAA) is trying to keep quiet about it. They are supporting the RIAA with the P2P crack down, when profits are soaring.

      Essentially early-mid 90's the Australian music industry had to smarten it's game because with our high level of sales tax on CDs, strong conversion rate, and the internet allowing easy access to the highly competitive American market place CDs could now be imported at a significant discount to purchasing locally. So local runs of CDs included bonus tracks, extra material, whatever they could to make them more inticing to buy than the overseas counterparts.

      Now the sales tax has been replaced with a lower GST, our dollar isn't as strong against the US, and purchasing internationally is no longer a very economic decision for Australians. However, the distribution channels have maintained their previous practices. Locally produced CDs still contain more material than the US releases, but with a weaker dollar it's now usually cheaper for US citizens to import into America from Australia. It's meant Australian sales are at an all time high, and US sales appear to have slumped. In reality, the volume of sales probably hasn't changed at all, it's just where they are transacted has shifted.

      Well, I found it interesting at least

    • Sure, but salaries are also quite a bit higher in the USA than in Canada (almost to the point of being the same dollar amount in US dollars as a Canadian would get in Canadian dollars for a similar job). And taxes are lower. Given someone in a similar job to you, the USD $18.95 probably "hurts" them about as much as your CAD $18.95 "hurts" you.

      I've always thought that they should have named the Canadian currency the "Zglortblag" or something totally different from "dollar", so people wouldn't compare two totally different currencies just because they happen to have the same name. After all, are things 100 times as expensive in Japan because it takes 100 yen to buy a dollar?
  • by flollywebfrog ( 462849 ) <> on Monday September 30, 2002 @10:57PM (#4364772) Homepage Journal
    This article does not mention piracy or file-sharing.

    Reuters should be commended for not confusing the issues.
  • .... before all the descent artist will go independent and publish strictly for the web. Many appear to going this path right now according to the articles that Janis Ian has been writing. I know the argument is that you gotta eat but the artists that appear to becoming caught up in the RIAA mafia can for all practical purposes be placed in the category of artistic prostitutes and the unwilling ones getting dragged along are just being prostituted. The whole industry is starting to stink to high heaven ...

  • great. just great.

    so, next January, we'll be treated to a news release from the RIAA, proclaiming that P2P and file-sharing services have cost them, *gasp*, $67 million in 2002!

  • In settling the lawsuit, Universal BMG and Warner said they simply wanted to avoid court costs and defended the practice.

    "We believe our policies were pro-competitive and geared toward keeping more retailers, large and small, in business," Universal said in a statement.

    They should have had to drop all P2P lawsuits.

    This is a perfect example of the pot calling the kettle black! The only difference is that the pot has paid off a few Congressmen, so they get whatever they want, be it illegal or not.

    Just watch...Congress will pass a law legalizing this MAP pricing.
  • If I commmit a crime and it nets me billions of dollars, and I get caught and sentenced to pay a fine that amounts to a tiny percentage of what I've made as a result of my illegal endeavors, how exactly does that serve as a deterrent to future crime?
  • by Mammothrept ( 588717 ) on Monday September 30, 2002 @11:19PM (#4364872) Journal
    The lawsuit that the recording companies settled is only not the whole story. The Attorneys General of a bunch of states sued them in civil court because they violated anti-trust law (allegedly). The Attorneys General, or the Federal Government could also have filed criminal charges against the record companies but they chose to file a civil lawsuit, presumably because it is much easier to win. In criminal proceedings, the defendant has to be proven guilty 'beyond a reasonable doubt.' To prevail in civil court, the standard is 'more likely than not.' It is the difference between being 51% sure they are guilty and being 99% sure.

    While the record companies refused to admit fault with words, they did it with dollars. You don't settle a lawsuit for that much money unless you are pretty sure that you will be found liable at trial. If they were really settling for the 'nuisance value' of the lawsuits, the amount would have been much lower. Think of this settlement as plea bargaining for guilty corporations--"We won't fight the the punishment as long as we don't have to say 'we're guilty' out loud."

    The other shoe, or boot, that is waiting to fall is private class action litigation. If someone robs you, the government can prosecute or sue them. But as a victim, you also have a right to sue. (Alas, you don't have a right to start a criminal prosecution--under US law--but you can, like the family of O.J.'s wife, sue in civil court.)

    There was at least one private class action lawsuit filed against these record companies for price fixing in 1996. The last I saw (1997), it was still kicking around the courts. In dollar terms, private class action suits can easily exceed the damages they'll pay to settle the government's case.

    The other damage the industry faces is that this settlement, while not technically an admission of guilt, is tantamount to it in the court of public opinion. The industry has been shown to be bigger pirates than Napster--they've been ripping off ALL of their customers.

    • by kcbrown ( 7426 ) <> on Tuesday October 01, 2002 @01:26AM (#4365341)
      There was at least one private class action lawsuit filed against these record companies for price fixing in 1996. The last I saw (1997), it was still kicking around the courts. In dollar terms, private class action suits can easily exceed the damages they'll pay to settle the government's case.

      That may be, but the problem with class action suits is that they are almost always brought in order to benefit the lawyers. It's rare indeed that the actual plaintiffs in such suits gain anything significant from them. Often the plaintiffs end up with a settlement that represents less than what they lost at the hands of the defendant. But the settlement amount is usually large enough that the lawyers representing the plaintiffs make enough to retire to a life of complete luxury.

      Remember: the lawyers representing you in a class action lawsuit don't work for you: they work for themselves, and are just using you as a tool to gain for themselves insane amounts of money.

      What that means in this case is that if the RIAA offers to settle early for $100 million, the lawyers will probably take the deal, because their cut will be something like 30% of that, and $30 million for a small group of lawyers is a lot of money if the amount of time it represents is small. They know that if they don't take the deal, the RIAA has the resources to drag the case out for decades if need be, so they'll take the deal. And the RIAA is thus still ahead a cool $300 million.

      If there's another boot to fall, it'll be something other than a class action lawsuit. And if you want an idea of the likely long-term outcome, just look at the tobacco companies and how much they were "hurt" in the end (hint: not much) by the class action lawsuits.

  • Rather than continue to purchase the engineered junk that the RIAA labels are releasing, start supporting indie labels (many of whom have been royally screwed by the major labels). Try United Musicians [] or QDivision [] home of Jen TryninJen Trynin []

  • A few degrees skew of the current topic, but M$ and Adobe, for two that I know of, also prohibit dealers from advertising their wares below certain prices. Is this practice only prohibited if you can prove that they're conspiring to fix prices?

  • The cash settlement will be paid to the 43 states. The companies also agreed to distribute $75.7 million worth of CDs to public entities and nonprofit organizations in all 50 states.

    This doesn't make much of fine, when you can consider the real incremental cost of the media.

  • by e40 ( 448424 ) on Tuesday October 01, 2002 @01:36AM (#4365364) Journal
    According to this [], there is also $75M in CDs to be given away to non-profits.
  • by gosand ( 234100 ) on Tuesday October 01, 2002 @09:01AM (#4366368)
    OK, so the RIAA owes me. They can subtract all the music I have "pirated" from the bill. I bet they still owe me money.

Logic is the chastity belt of the mind!