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Digital Music Downloads Too Expensive? 274

threeofnine writes "The Sydney Morning Herald has an article written by a copyright and technology lawyer asking if we are paying too much for digital downloads. From the article: 'Parallel imports are unavailable in the Australian digital market, however. Australian consumers cannot purchase downloads from iTunes or Wal-Mart in the US, which are often cheaper than downloads available here, without a US-issued credit card. And restrictive licensing conditions imposed by copyright owners also limit the sale of digital downloads across international borders. For both reasons Australian consumers miss out. And retailers cannot buy downloads from overseas and resell them here, even if it is worthwhile for them to do so. In a recent analysis, the prices of Australian-made CDs of artists such as Bon Jovi, REM and Robbie Williams were compared to those of legal parallel imports. It was found that the local product was as much as 300 per cent more expensive.'"
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Digital Music Downloads Too Expensive?

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  • by yagu ( 721525 ) * <yayagu@[ ]il.com ['gma' in gap]> on Thursday April 27, 2006 @11:35AM (#15212647) Journal

    Interesting key (and somewhat conflicting) points from the article:

    This is not the fault of retailers. Prices for digital downloads are based on wholesale prices, and are determined on a territorial basis by record companies based on their perception of what each market can bear
    and:
    As a border-free environment, the internet was supposed to bring down market barriers. But record companies use the internet to create boundaries and increase protectionism in the market for sound recordings, to the detriment of consumers

    So, in addition to lobbying in the United States to encumber music and entertainment beyond any previous restrictions (to the point of unusability if they get their way), the music industry tries to layer artificial geographical artifacts over the internet to further increase their (already obscene) profits. I find it interesting the entertainment wonks get away with this under the "protection of artists and intellectual property" canards juxtaposed next to the argument that many people lose their jobs to outsourcing as a result of the "global economy" and the breaking down of these alleged geographic boundaries.

    Seems like those in power define by expedience.

    (As an aside, another tasty tidbit in the article:

    When will parallel-import laws be extended to the digital market, so that Australian consumers are finally charged a fair price for downloads?
    I find this an interesting question -- maybe when Americans are also charged a fair price for music (they aren't today). Sigh.
    • by TubeSteak ( 669689 ) on Thursday April 27, 2006 @11:50AM (#15212813) Journal
      Those two points aren't contradictory at all.

      Both support the assertion that the recording industry is still artificially keeping prices up.

      Maybe someone will start up a business to issue low value American credit cards to foreigners so they can buy from iTunes. Even if it makes digital downloads 200% more expensive, there's still a savings.
      • by Maximilio ( 969075 ) on Thursday April 27, 2006 @01:53PM (#15214205) Homepage Journal
        the assertion that the recording industry is still artificially keeping prices up.

        I can confirm for a solid fact that this is extremely true. I can have on-demand CD's printed off Lulu for $5.75 a pop. On-demand printing is proportionally 150% or more expensive than mass-produced printing, which I also know by comparing what it costs to print off my book versus what a trade paperback goes for in the store. So imagine what the real per-unit cost of a CD is, factoring in just about everything else (and the fact that the record companies' "advance" to the band usually deducts all of the costs of recording the actual music), it is probably below $3.00, and very likely below $2.00. We're talking a ballpark markup of about 1,000%

    • by aristotle-dude ( 626586 ) on Thursday April 27, 2006 @12:38PM (#15213331)
      I had hoped that you would have a better grasp of economics when I saw you quote the the first part but alas, it was not so. The wholesale prices and retail prices of goods and services are usually determined not only on what the market can bear but also on the cost of doing business in each country. Do you honestly think the companies have no brick and mortar operations in each country for logistical purposes? They need to have a head office in each market they are dealing in and people on the ground scouting for new talent. All of this costs money and the amount varies from market to market based on the cost of living and government imposed payroll taxes.

      I have a few questions for you. How would they determine how much of the sales to provide for each sales region if there was only one store? Which region would be used to determine the price? How would you handle currency fluctuations? Why should some regions suffer with lower margins in times of currency market instability while others profit more? If prices fluctuated with the currency markets, should wages do the same?

      I really don't think the slashdot community understands some of the basic tenents of local economics and how the internet plays into it. If you can a company without a presence in other countries, then you can ship anywhere and charge the same price+shipping to everyone but if you have a presence in each market, you have to be able to cover your margins in those regions with slightly differing prices. Also, if you are going to have universal pricing of physical goods, chances are that your customers will have to foot the bill for import duties.

      In closing, I really don't blame the slashdotters themselves but rather the clueless media which have led people to believe things which are not true like that the internet will bring down all barriers to trade. Such notions are naive and simplistic because they cannot apply to every business model out there. The only way you could have a single market is if you had a single currency and a single set of labour practices/taxes.

      • Good points. I am not an economics expert and your point about that is well taken. I do understand at an elementary level some of the tenets you describe, and would have factored that into a longer post, i.e., IANAEE (economics expert), but the entertainment industry is playing loose with the rules here.

        So, my post was thinner than it could have been but I still think underpinning the industry around downloads and digital media is a sinister and conniving Star Chamber, and they're not there for their ind

  • Why not... (Score:3, Informative)

    by Anonymous Coward on Thursday April 27, 2006 @11:36AM (#15212657)
    ... AllOfMp3.com [allofmp3.com]?
    • Re:Why not... (Score:3, Informative)

      by stew77 ( 412272 )
      http://www.emusic.com/ [emusic.com] has a pretty sweet deal on non-DRM mp3s as well, using a subscription model. They have a focus on minor labels.
      • Re:Why not... (Score:2, Informative)

        by pNutz ( 45478 )
        And emusic is actually has contracts with labels and artists and compensates them for what you get unlike AllofMp3--REAL pirates who infringe on copyrights for commercial gain (from the dupes who actually give them money).

        also, audiolunchbox.com, bleep.com, and calabashmusic.com have good, compensated indie and world music. They're more expensive than emusic, more in iTunes range.
    • Re:Why not... (Score:2, Informative)

      by johnfink ( 810028 )

      The availability over the Internet of the ALLOFMP3.com materials is authorized by the license # LS-3-05-03 of the Russian Multimedia...

      ... The user bears sole responsibility for any use and distribution of all materials received from AllOFMP3.com. This responsibility is dependent on the national legislation in each user's country of residence. The Administration of AllOFMP3.com does not possess information on the laws of each particular country and is not responsible for the actions of foreign users.

      In

    • by mrdaveb ( 239909 )
      Again this crap is being modded up! AllOfMP3.com don't pay the appropriate royalties to their artists. I very much doubt whether music downloaded from their site is appropriately licenced if you are buying it from outside Russia.

      Like Stew77 said, emusic [emusic.com] is the way to go if you don't want to support the big 'evil' labels. Give your money to independant labels, not dubious "too good to be true" Russian imports!
      • What do I care if it's legal or not? The RIAA can goto hell as far as I am concerned, and it's not like allofmp3.com has a reason to give them my info that I downloaded from them. They provide a fantastic service, and great quality. I am thrilled to give them my money and will continue to do so. MOD PARENT DOWN, go buy your silly DRM encumbered crap, it's your money.
      • "unlike AllofMp3--REAL pirates who infringe on copyrights for commercial gain (from the dupes who actually give them money)."

        Importing music to the US is legal. Until that changes download from AllofMP3 is entirely legal.

        "AllOfMP3.com don't pay the appropriate royalties to their artists."

        If the artist is registered with ROMS, (The Russian equivelant or RIAA), they get royalties. It's up to the artist. If they want to get paid for sales in a certain country, they must actually *do* something about it. Mon
    • Speaking of which, I just this morning got their old AllofMp3 Explorer client (not yet alltunes [alltunes.com] unfortunately) working in linux using crossover office.

      To go further off topic, 40 bucks (the cost of ~four cd's) for crossover office (which rocks, by the way) is a liscence cost I will totally be willing to pay for in 30 days when my trial runs out. Makes me feel good that some companies actually price IP products sanely.
  • by Anita Coney ( 648748 ) on Thursday April 27, 2006 @11:36AM (#15212661) Homepage
    I find Allofmp3 to be quite reasonable! About 10 cents per song with no DRM. You can't beat that.
    • by Jordan Catalano ( 915885 ) on Thursday April 27, 2006 @11:45AM (#15212759) Homepage
      AllOfMP3? Good call. So, instead of illegally downloading a song, you can illegally download it AND pay a fee that never gets anywhere near artists' hands.
      • You're under some illusion that mp3 downloading is about helping artists or "sticking it to the man"? How naive.

        • You're under some illusion that mp3 downloading is about helping artists or "sticking it to the man"? How naive.


          That's not what the GP post said. He said that downloading from Allofmp3.com doesn't help artists either. I don't know about you, but when I pay for music I want the artist to get the money, not some random other people.
          • I don't know about you, but when I pay for music I want the artist to get the money, not some random other people.

            Am I misreading you, or are you under the delusion that artists get the money when you buy a CD?
            Under the current system "some random other people" get 95%-99%* of the money ... it might as well be nothing.

            Not that I agree with paying to download from AllOfMP3.com ... if you're going to get a non-licensed version, at least don't pay for it.

            *Out of which they must pay for the recording, p

      • by Anita Coney ( 648748 ) on Thursday April 27, 2006 @11:51AM (#15212819) Homepage
        Actually, in the US it is not illegal. Actually, there is a little known loophole in US law that allows you to import music from outside the US without any copyright violation.

        17 USC 602(a)(2) says that "importation, for the private use of the importer and not for distribution, by any person with respect to no more than one copy or phonorecord of any one work at any one time" is NOT infringement.

        Thus, if you "import" one song from say, allofmp3.com, or from some other foreign server, for personal use, and do not distribute it to anyone else, the RIAA could not legally come after you.
        • It's not copyright violation -- it's a customs violation.
          • It appears that as long as it is for personal use that importing music from allofmp3.com is not a customs violation. IANAL, etc.
  • by joeldg ( 518249 ) on Thursday April 27, 2006 @11:38AM (#15212686) Homepage
    There are websites like allofmp3.com that sell mp3's in bulk with a set amount per meg.. seems pretty cheap to me, set the bitrate, if you want higher quality music than you can get on limewire or soulseek..

    iTunes is too expensive .. but, there are alternatives.

    • Selling music by the meg sounds to me a lot like selling paintings by the yard. I thought it was supposed to be about quality, not quantity. But what do I know?
      • You're close.

        Selling copies of music by the meg is a lot like selling copies of paintings by the yard. Which they do. The cost of production is bandwidth & servers for copies of music, paper & ink & presses for posters. Tack on a bit for creators and there you go. (not getting into whether allofmp3 does it properly)

  • by digitaldc ( 879047 ) * on Thursday April 27, 2006 @11:38AM (#15212687)
    And restrictive licensing conditions imposed by copyright owners also limit the sale of digital downloads across international borders.

    Is it any surprise that the Australians are abandoning the commercial ship and are now sailing from the Pirate Bay? [thepiratebay.org]
  • No connection (Score:5, Insightful)

    by suv4x4 ( 956391 ) on Thursday April 27, 2006 @11:39AM (#15212693)
    Did anyone notice the article summary has no connection with the title whatsoever...?
  • Stop the RIAA (Score:5, Informative)

    by zufar ( 603583 ) on Thursday April 27, 2006 @11:41AM (#15212720)
    EFF is collecting signatures [eff.org]to stop RIAA

    To The United States Congress: We are the customers and former customers of the member labels of the Recording Industry Association of America (RIAA). We love music and will gladly pay a fair price for it, but we are outraged by the RIAA's tactics in suing ordinary Americans for filesharing....

    Let's slashdot the Senate and House Commerce!

    • Re: Stop the RIAA (Score:4, Insightful)

      by goldspider ( 445116 ) on Thursday April 27, 2006 @11:57AM (#15212878) Homepage
      To The United States Congress: We are the Recording Industry Association of America (RIAA). We love selling music and will gladly sell it for a fair price, but we are outraged by filesharers' tactics in acquiring our product without paying for it...

      Spin works both ways.
      • Hard to feel pain for a rapacious monopoly who sues 12 year olds and grandmothers.

        I don't have any problem with buying music. I still buy CDs, even. But the instant some inane, pathetic copy protection pops up when I stick it into my computer, I go nuts. I'm too lazy to burn my junk to MP3. I just want to listen to it while I work, but this isn't allowed in RIAA world, because I might possibly allow other people to infringe on copyright with my legitmate copy.

        Screw them. They cross the line all the time, f
    • Back when the RIAA was going after entire file-sharing programs, weren't we complaining that going after individual users is what they should be doing?
      • Yes, but they're going after random people in the hopes they strike gold because everybody obviously pirates music. They're suing innocent people, and that's just sick.
  • by $RANDOMLUSER ( 804576 ) on Thursday April 27, 2006 @11:43AM (#15212733)
    Why do CDs cost as much as vinyl LP albums did? The production costs for (digital) CDs are several of orders of magnitude less than they were for (analog) LPs, yet the price-point never moved.
    • by NickFitz ( 5849 ) <slashdot.nickfitz@co@uk> on Thursday April 27, 2006 @12:09PM (#15212996) Homepage

      Actually, when CDs first appeared in the 80s they were a fair bit more expensive than LPs, and only moved back to more normal levels as production capacity was ramped up. The cost of the medium was never a major part of the overall cost of producing either an LP or a CD; the real question is why CDs are two to three times the price that an LP was in the mid-80s, given that the price of cocaine (which is where the majority of the recording industry's costs lie) has remained virtually static.

      Off topic, but true story: at the Stonehenge Free Festival in 1984 a friend of mine, feeling thirsty, approached an ice cream van which had cans of soft drinks on display. He asked "How much is the Coke?" to which the vendor replied "£50 a gram".


    • Some prices do go down, even more so when compared to inflation.

      How much did a car cost in 1920? How much did a color TV with a remote cost in 1965? How much did a computer cost in 1984 or a VCR? How much did a DVD player cost in 1997?

      The difference in those markets is that there is competition and supply and demand.

      Personally, I don't pay for recorded music. I'm not much into charity.

    • Because music videos cost more money and the signing bonuses are larger. In fact, the general cost of doing business is higher today that it was back then. You see, there is a thing called inflation, perhaps you've heard of it? If you had a job, you would see that this inflation causes not only the price of goods to go up but wages as well. It is a vicious circle where higher wages causes prices to go up which in turn cause wages to go up.
  • Companies have been practicing price fixing for years based on location.

    Don't believe me? Compare your cost of cable TV to people in other local cities.

    This has also been the case for years with things like software, movies and textbooks where the producer will likely lower the price in some areas and raise it on others.

    This is simple economics of pricing an item at what the market will bare. Don't like spending so much on a ____? Don't buy it then!
  • Why they pay more (Score:2, Insightful)

    by supabeast! ( 84658 )
    Want to know why Australians pay so much more for imported goods? It's because Australians are willing to pay more. If Australians just stopped buying overpriced foreign goods, the manufacturers would start lowering prices. But whinging about the problem is never going to fix it.
  • ...and live at 10, the sun comes up in the east!

    Seriously, though - they're 'diiscovering' that record companies are using predatory pricing, collusive behavior, and generally refusing to recognize that the 'costs of distribution' in the digital age doesn't really explain their bajillion-percent markup?

    Teh?
  • by ComradeSnarky ( 900400 ) on Thursday April 27, 2006 @11:50AM (#15212815)
    The difference between digital media and other goods is that, for the latter, the price is determined by the cost of production and distribution plus extra which is kept as a profit. Digital media however, has zero production and distribution cost (for each individual download i mean), hence the price is entirely determined by what the record companies think is the optimum price, cheap enough for people to buy, expensive as possible to earn as much money. This means that in a third world country, the optimum price might be 10 times lower than the optimum price in a first world country. In order to make as much money as possible they have to price their downloads differently in different countries - selling it at first world prices everywhere would mean they lose out on profits in less well-off countries, selling it as third world prices mean they don't earn enough in first world countries. That's why they are so intent on limiting downloads accross digital borders. And hence, measures such as region encoding.
    • "The difference between digital media and other goods..."

      Actually, that's not the difference between digital media and other goods, it's the difference between free market pricing and monopoly pricing.

      Copyright and other forms of so called intellectual 'property' are monopoly rights, which, like you say, means that the producer can set the price the market can bear. Incidentally, that also means that if consumers get more disposable capital, if, for example, the price of food goes down, the price of the mon
    • "The difference between digital media and other goods is that, for the latter, the price is determined by the cost of production and distribution plus extra which is kept as a profit. "

      Not at all. Price is determined by how much people are willing to pay.

      In a truly competitive commodity market, price will approach the cost of goods sold, but that is not a result of determining price by tacking on some profit to the COGS -- it is a result of needing to underprice your competition while maintaining prof
      • *Just wanted to note that this is true of any good, not just digital media. Non-digital goods obey the same economic laws as digital goods, it's just that the COGS is higher. It breaks down to competitive commodity market vs. nocompetitive non-commodity market.
    • the price is determined by the cost of production and distribution plus extra which is kept as a profit.

      That's fine for Econonmics 101, but it's not really the world we live in.

      The price for any item is set mostly by trial and error and modulated by what the customer will pay for it. Usually, items might start at what they cost to produce and distribute + n% profit, but they generally float to what people are willing to pay. If things are prices too high, the company selling it can lower the price
  • My Unpopular Opinion (Score:3, Interesting)

    by devphaeton ( 695736 ) on Thursday April 27, 2006 @11:52AM (#15212832)
    It seems that everybody wants everything, and think it should be free.

    Are record companies greedy and evil? You betcha.
    Are they gouging customers and musicians both? Right-o.

    Has everyone's perception of value been altered by p2p downloads, cracked software and other Internet-rendered amenities?

    Without a doubt.

    -1 Flamebait.
    • by kebes ( 861706 ) on Thursday April 27, 2006 @12:08PM (#15212985) Journal
      -1 Flamebait.

      Why do you think your comment is flamebait? Do you think that this statement is controversial:

      Has everyone's perception of value been altered by p2p downloads, cracked software and other Internet-rendered amenities? Without a doubt.

      I think that statement is true, and I don't think we should attribute to it any negative connotation. I believe that the perceived value of information and creative expression was over-inflated before the digital age. Now we are seeing such things drop to their actual value, which is quite low.

      I'm not saying that information is worthless. Far from it: knowledge is power certainly. What I'm saying is that previously there were boundaries on information exchange (some very real, like the difficulty of printing books, and some artificial, like copyright). Now that the boundaries have been lifted, our "perception of value" has indeed been altered. We now understand what a low cost there is on information exchange, and how much we can all benefit from the free exchange of information (examples: Linux, wikipedia, etc.).

      I think p2p downloads and software cracks point to the fact that information CAN be exchanged with very little effort. I know many people hate the "information wants to be free" tagline, but ultimately it appears that since information CAN be exchanged freely, why should we artificially limit it?

      I think it is a good thing that we are starting to realize that freeing information is easy and useful.
  • by neonprimetime ( 528653 ) on Thursday April 27, 2006 @12:04PM (#15212945)
    i recently did a study...
    - I pay too much for gas
    - I pay too much for cheeseburger
    - I pay too much for clothes

    What's the news here?
  • by quag7 ( 462196 )
    Well the only possible sympathy I have in the examples given are for fans buying REM. Nothing could make me care about what people pay for Bon Jovi or Robbie Williams.

    Maybe the way to really fight back against the music industry is to stop buying crappy music, and patronize your local used CD store. The big profits, I would imagine, come from the big multiplatinum albums, of which - maybe - one out of every 20 or 30 represents quality music?

    Completely subjective, I know. Smaller labels that have not slas
  • Comment removed (Score:4, Interesting)

    by account_deleted ( 4530225 ) on Thursday April 27, 2006 @12:06PM (#15212966)
    Comment removed based on user account deletion
    • For me, I buy almost all my music on iTunes because:

      - For most music, iTunes is significantly cheaper. Even for older music, often the classic albums from a band on CD are quite expensive
      - It's instant. I used to buy a lot of CDs at a cheap chain called Fopp, on iTunes I get generally lower prices without the hassle of searching the racks and fighting through the rows of students
      - It's easy to search and browse
      - I only listen to the music played from iPod or computer anyway
      - I don't have to store redundant
      • Comment removed based on user account deletion
        • I paid £15 for Let it Bleed like the muppet I was...

          what's easier than popping a CD in the drive and typing "abcde" on the command line and letting it get on with it.
          It's even easier on Windows/MacOS: I can just stick the disk in and come back when I hear the "rip completed" sound. I guess that is a fairly minor point, especially given the download time for iTunes.

          The problem I found with CDs was that they would gradually spread out around the house until I could never find what I wanted.
    • The music that you are buying is older and you are buying second-hand CDs. Of course second-hand CDs cost less than new CDs and older CDs are much less likely to contain DRM. Not everybody likes the older music, which is a good thing because it keeps second-hand prices lower. Bad car analogy: Why do people buy new cars? Older second-hand cars cost less and have less intrusive computers in them than newer cars.
    • Yes, I'm middle-aged & I tend to listen mainly to classic rock albums with a little blues & soul thrown in. Most of the stuff I listen to, I can get fairly cheaply either second-hand or on eBay/Amazon marketplace - generally, I'll pick up a brand new CD for around £6 ($10). For that money, I get a nice uncompressed shiny CD with some liner notes and a hard case that I can rip at whatever bit rates I want to (I do listen to a lot of MP3-based music when I'm travelling or in the gym).

      Okay, but a
    • With iTunes (and I presume the other services) you can preview each song and buy only the ones you intended to. If the whole album is great songs, you don't get much benefit though. Preview definately helped with avoiding remixes (or non remixes if you're looking for the remix) and songs that simply aren't as interesting as you think they might be. I know you can preview at the record store, but it's usually a very limited selection.

      Ahh and that brings up the selection issue. itunes vs. record store is
  • I couldn't care less about the price for a song in the iTunes Music Store. I will never buy anything from it anyway.

    CD's solve the DRM, quality, backup and price problems in one go.

  • Just buy an US itunes gift certificate on Ebay ; then (if you have not been ripped off by the seller...) redeem the gift certificate on itunes AND THEN create a new login with a phony US address. Here you go, Desperate Housewives complete season 2 (not to be found anywhere else at the time I tried this...)
  • YRO? (Score:3, Interesting)

    by alex_guy_CA ( 748887 ) <alex@schoenfel[ ]com ['dt.' in gap]> on Thursday April 27, 2006 @12:34PM (#15213275) Homepage
    I lived in Australia for a while in 1989, 1990. At the time Aussie politicos were investigating price fixing of CD's. It looks like the more things change the more they stay the same, but what do inflated prices have to do with rights? Do people have a right to low prices? What a strange concept. Maybe if it is AIDS drugs, a case could be made, but music downloads?
  • Far to expensive (Score:3, Insightful)

    by nurb432 ( 527695 ) on Thursday April 27, 2006 @12:46PM (#15213430) Homepage Journal
    Aside from the fact that music in general is too costly, consider this:

    ( only speaknig averages here.. )

    A uncompressed CD is 17 bucks..

    To buy a CD full of downloads its costs that much or more, and you only get COMPRESSED versions..

    Not too equitable sounding to me..
  • Price & Quality (Score:3, Insightful)

    by VincenzoRomano ( 881055 ) on Thursday April 27, 2006 @12:59PM (#15213572) Homepage Journal
    What about the comparison of the price against the quality of the sound?
    Is it comparable to CD (44.1 KHz, 16 bits samples for 2 channels)?
    If a physical CD costs, say, USD 15.- USD with 15 songs, each downloadable song should cost USD 1.
    Much less if you think about the money they save by not printing the medium and not shipping the boxes all around the world.
    Let's say USD 0.75 could be right. It's right if the song is CD quality, of course.
    If it's a compressed [wikipedia.org] format song, it should cost less because quality is worse. Let's say USD 0.50 is a fair price.
    Almost all legal downloads are above this price. With no real reason!
    So I'd say that prices are too high when compared to quality.
    And Maybe they are too high in any case.
  • You're being screwed - By Your Government! They enforce these rules, so put the blame where it's due.

    And you will continue to be screwed until you change your government to be more consumer friendly. And that's also putting the blame where it's due - On The Voters!

    • Sorry, I missed the part where you got consumer friendly politicians to run. You see, it takes millions of dollars to fund a campaign (and inform enough people you are running, much less what you stand for). Corporations pay those millions. Oh, sure, they come in individual contributions. Guess who funds the information machine that solicits those contributions. Bingo. I'll say it again, corporations pay for electioneering. Without backing you will not get elected, regardless of your views.

      As soon as we ge
  • Weird (Score:4, Funny)

    by szembek ( 948327 ) on Thursday April 27, 2006 @02:03PM (#15214340) Homepage
    Strange, all the ones I download are completely free... hang on I think I hear somebody knocking on my door...

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