Thursday, January 05, 2006

Record Labels Probed for Price Fixing Plan

For the past five years or so the major record labels have had their way with consumers of music, online and off. They sell CDs containing a dozen or so songs, perhaps one or two of which are marketable as singles, to a music-hungry public for $12 to $16 or more and give the artist a couple of pennies from each sale.

Then, they sue thousands upon thousands of everyday law-abiding citizens, including grandmas and unsuspecting teen-agers, for copyright infringement when they download songs from the Internet in order to get around the high CD prices.

The music industry whines and cries that its bottom line is shrinking in light of all the piracy going on. A shrinking bottom line might more easily be explained by the slothful nature of the industry in embracing 21st century technology and the online market.

Thanks to Apple Computer’s Steve Jobs, that is beginning to change. Jobs introduced his iTunes music site along with Apple’s iPod music player that has become a must-own for most teens these days.

Apple made arrangements with all four major record labels to sell individual song titles for 99 cents each over the Internet. Other companies followed suit, such as a reformed Napster. Wal-Mart also sells songs online for 11 cents cheaper per song than the standard.

But now, the recording industry is whining that it is not able to control the prices charged for downloads. Record labels say they want to be able to charge more for the popular new releases and less for the slow-moving older tunes.

The major labels are alleged by some to be colluding on pricing of online music. So New York Attorney General Eliot Spitzer is saying not so fast. He has stepped in a launched an investigation of the music industry.

All four major labels have confirmed that they have received requests for information from Spitzer. Online music retailers Apple and America Online have received similar requests.

So the shoe is apparently now on the other foot. The recording industry has been putting the squeeze on consumers by suing and overcharging; now, the music industry is getting squeezed by New York.

The move is apparently working; music industry plans to change the pricing structure for online music is currently on hold. Some insiders claim the recording industry has been victimized by Jobs and his one-size-fits-all pricing system that has been adopted widely.

The poor record companies are now victims? How sad for them. But they are getting absolutely no sympathy from the online community. They’ve made a lot of enemies of their own customers over the past few years, and they know it.

The blogging community has been particularly outspoken against the tactics of the major record labels. A blogger on Slashdot wrote, “So, who are the pirates now? It does seem maybe these (alleged) crooks may be losing their grip on the industry: getting caught with their hand in the pricing cookie jar, and potential other investigations into payola (the other way they control the flow and exposure to music/artists).”

I have no doubt the industry will come out on top. Ultimately, the big corporations always do.

Everyone listens to music, and traditionally, the only way you could get it was to buy it from the record labels, at whatever price they decide to charge.

They still want to do that. Old habits die hard.

But it could be that the tide has begun to turn, if only just a little. There are now many recording artists who are skipping the major labels altogether and putting their music directly onto the Internet for downloading.

And now, at least one state’s attorney general is pulling the plug on a potential price-fixing plan by the record companies in its anti-trust probe.

If consumers are lucky, these will be remembered as the first steps in a battle to rein in the greedy multinational record labels and make them accountable for their indifference to the listening public.

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