“The 2nd U.S. Circuit Court of Appeals in Manhattan said the lawsuit can proceed before a judge in Manhattan because enough facts, as described by the plaintiffs, support the claims,” Neumeister reports.
“The lawsuit brought by music purchasers had been tossed out by a lower court judge in October 2008. It accused major record labels of conspiring to fix the prices and terms under which music would be sold over the Internet,” Neumeister reports.
“The New York legal action combined 28 lawsuits brought across the country from December 2005 through July 2006,” Neumeister reports. “The combined lawsuit was filed in Manhattan in April 2007.”
Neumeister reports, “Defendants include the four major recording companies: Universal Music Group, Warner Music Group Corp., EMI Music North America, and Sony BMG Music Entertainment, a joint venture of Sony Corp. and Bertelsmann AG.”
Neumeister reports, “The lawsuits accused record companies of conspiring to charge at least 70 cents a song on the Internet, even though their costs were much lower than in record stores.”
Full article here.
Music to my ears!
The time has come to take ’em down.
I hate record companies as much as anyone, but on what planet is 70 cents considered expensive?!
@Des:
The thing to look at is the financial realities to see if competition exists…or not.
Twenty years ago, a brand new CD cost $17 in the local retail outlet. The majority of the supplier’s expenses was tied up in the costs of physical production and distribution.
Today, there is zero cost of physical production because there is no physical CD you’re buying anymore. And the distribution costs have changed from shipping physical stuff to stores to a virtual electronic click and download, which is also a small fraction of the prior expense.
As such, the recording industry’s costs in its highest expense area – that of a physical sale – is on the order of magnitude 1% of what it used to be, yet effectively none of this cost savings has ever been passed along to the consumer in the form of lower prices.
So is there illegal collusion? Well, has every single major label record company maintained their high prices? Yup.
Of course, what would fix this situation very quickly would be for our copyright laws to undergo a profound correction: all we need to do is to restore them to the duration that they were first permitted to be in the original US Constitution: 28 years of permitted exclusivity.
The net result of this change is that all media from before 1982 would be in the public domain, which would create free & open competition in pricing for its electronic (or physical) distribution.
-hh
I can’t see how anyone can win this suit against the labels. It is not like users are forced to buy this product at 70 cents. There are independent music producers out there, as well as independent music outlets outside of iTunes, who offer lower pricing.
It seems like the plaintiffs believe that, since there is no physical manufacturing and distribution requirement for digital downloads, and all overhead is incurred by the online store operators (i.e. labels have ZERO cost related to distribution and sales of a digital download product), the relative price per track should be significantly lower than for the physical product. But that is NOT how a free and open market works. Labels are free to charge as little or as much as they want. In fact, the price that labels charge their distribution partners varies greatly, depending on the partner. The dominant one (iTunes) will pay them upwards of 70 cents per track (on average). However, Rhapsody, Napster and other rental shops have completely different pricing structure; same for Zune Marketplace. As far as consumers are concerned, the retail price varies greatly as well, from five of 10 cents on some independent download shops (for smaller acts), to some 60 cents (Amazon), a dollar, up to $3 per major act track on some proprietary mobile carriers’ storefront.
This is quite unwinable. However, if anyone SHOULD sue major labels, it is their musicians. Outside of the small number of major acts (on the scale of Mariah Carrey, U2 and similar), musicians are royally screwed by the labels, getting a few pennies on that dollar that you and I pay for a download on iTunes. No industry in the world that works on commission has such a massive commission percentage. Not to mention that, when they invest in a band, they pay for the recording studio and all related expenses, plus album marketing and promotion, BUT they make sure they recover EVERY penny of that investment from the initial sales of that album BEFORE musicians get a single dime out of it.
Labels certainly deserve to get sued and ran straight into ground, but unfortunately consumers won’t be the ones to succeed in doing that. Musicians, on the other hand, may have a better shot at it.
Brings to mind a NOFX song, Dinosaurs Will Die:
Kick back watch it crumble
See the drowning, watch the fall
I feel just terrible about it
That’s sarcasm, let it burn
I’m gonna make a toast when it falls apart
I’m gonna raise my glass above my heart
Then someone shouts “That’s what they get!”
For all the years of hit and run
For all the piss broke bands on VH1
Where did all, their money go?
Don’t we all know
Parasitic music industry
As it destroys itself
We’ll show them how it’s supposed to be
Music written from devotion
Not ambition, not for fame
Zero people are exploited
There are no tricks, up our sleeve
Gonna fight against the mass appeal
We’re gonna kill the 7 record deal
Make records that have more than one good song
The dinosaurs will slowly die
And I do believe no one will cry
I’m just fucking glad I’m gonna be
There to watch the fall
Prehistoric music industry
Three feet in la brea tar
Extinction never felt so good
If you think anyone would feel badly
You are sadly, mistaken
The time has come for evolution
F*ck collusion, kill the five
Whatever happened to the handshake?
Whatever happened to deals no-one would break?
What happened to integrity?
It’s still there it always was
For playing music just because
A million reasons why
All dinosaurs will die
All dinosaurs will die
All dinosaurs will die
Des Gusting, -hh, and Predrag
I’m not an expert, but I think the focus of the suit has nothing to do with the 70 cents per song price. Ignore the price.
I believe the suit is focused on the collusion of the record companies, and the price fixing.
The actual price does not matter.
This suit is not about wanting to buy music cheaper.
Here are the relevant parts of the story:
“They said the companies signed distribution agreements in joint ventures that allowed them to communicate with one another about pricing, terms and use restrictions. …
eMusic, … charges 25 cents per song and places no restrictions on how purchasers can upload their music to digital music players. It also noted that the defendants refuse to do business with eMusic, the No. 2 Internet retailer, …
The appeals court also noted that the alleged price fixing is being proved by the New York State attorney general and is also subject of two separate investigations by the Department of Justice.”
And I believe this story and suit goes much further;
Remember when Jobs was pressured by the record companies to sell bundled albums (high prices, and unwanted filler), and to sell single tracks at higher prices?
Remember how the record companies set up deals to sell their tracks on some online services that would bend to the record companies’ will, appearing to be a pressure tactic to get Apple to capitulate?
If it can be shown that the record companies were colluding to keep prices higher (the actual price does not matter, collusion and <b>price-fixing<b> are the key) then the record companies can be convicted of (a) serious crime(s).
This is good for consumers and competitive business, and not a ploy to get cheaper music.
That’s my understanding.
And on the subject of copyright, consumer advocacy in the US is pathetically weak, compared to the lobby that keeps extending the term of the copyright in the US. Perfect example of this was the 1998 “Sony Bono Copyright Term Extension Act.
In 2003, Mickey Mouse (created in 1928) was about to lapse into public domain. During late 90s, Disney (together with other owners of fat copyright portfolios, such as Warner, Universal, etc) mounted massive (and successful) lobbying effort to extend the term by another 20 years. After the adoption of the 1998 law (also know as the “Mickey Mouse Copyright Term Extension Act”), Mickey is to go public domain in 2018. We can safely expect Disney to launch into the next campaign in about five years.
And that wasn’t the first time; when in the 70s Mickey was supposed to expire (in accordance with the prior 50-year term limit based on 1909 act), a 1976 act was adopted to extent the term from 50 to 75 years.
Walt Disney died decades ago. Even the only reasonably related relative of his (Roy Disney, his nephew) had died last year. There is no reason why Disney’s creation from 1928 should benefit from copyright protection. Absolutely NOBODY who worked with Disney on creation of Mickey Mouse is alive, and they are (most likely) all have been dead for over 30 years.
Unfortunately, copyright law is turning into a cash cow for major entertainment conglomerates, which goes at the expense of all creative people. Disney had no problem taking fairy tales of popular authors of the 19th century and turning them into extremely profitable films, without having to pay ANY royalty to original owners, as they were by then already in public domain. At least several major Disney hits (Snow White, Little Mermaid, Pinocchio) are based on literary works from mid- to late 19th century, and would have been off-limits under the current copyright laws.
This may, in the end, turn against Disney, as the pool of popular books (or fairy tales) will begin to shrink with time passing by and copyright protecting more and more works. In the end, they’ll actually have to negotiate and pay for adaptation rights. While Disney may be able to afford that, it is unlikely that anyone else (i.e. independent creative artists) will be able to do the same if they wanted to produce creative work inspired by some other published work.
“I hate record companies as much as anyone, but on what planet is 70 cents considered expensive?!”
Depends on what the 70 cents buys, doesn’t it? For somethings 70 cents is way too much. for others no price could be high enough…
“This is quite unwinable. However, if anyone SHOULD sue major labels, it is their musicians. Outside of the small number of major acts (on the scale of Mariah Carrey, U2 and similar), musicians are royally screwed by the labels, getting a few pennies on that dollar that you and I pay for a download on iTunes. No industry in the world that works on commission has such a massive commission percentage. Not to mention that, when they invest in a band, they pay for the recording studio and all related expenses, plus album marketing and promotion, BUT they make sure they recover EVERY penny of that investment from the initial sales of that album BEFORE musicians get a single dime out of it.”
that is exactly who should by upset, and yet when we hear from a musician that takes a stand on this they seem to all to often be ill informed and bend over and take it while parroting the labels line.
…also, it is not uncommon to find that the label has not payed for the studio and that “marketing” is defined as “we mentioned you twice to a radio studio in Tacoma” and yet they charge truckloads of cash for that “work.”
“Unfortunately, copyright law is turning into a cash cow for major entertainment conglomerates,… This may, in the end, turn against Disney, as the pool of popular books (or fairy tales) will begin to shrink with time”
I suspect that with Pixar running things in mouse world now they may be using a lot less of the popular works and actually create a few new stories. At least we can hope.