Feeds

Labels charged with price-fixing – again

Cough it up for The Three Tenors

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

A pair of major music labels have been hit with another round of price-fixing charges courtesy of the FTC - a decision which raises the question as to who exactly is to blame for falling music revenue.

In a unanimous decision, members of the U.S. FTC (Federal Trade Comission) chastised Vivendi Universal and Warner Communications for restricting competition in the sale of "The Three Tenors" - Jose Carreras, Placido Domingo, and Luciano Pavarotti - audio and video products. It seems that PolyGram (a company later bought by Vivendi) conspired with Warner "to curb discounting and advertising to boost sales of recordings that the two companies jointly had distributed based on the tenors' concert in Paris during the 1998 soccer World Cup."

Based on these practices, the FTC has arrived at a stunning ruling.

"The Commission's order bars PolyGram from agreeing with competitors to fix the prices or restrict the advertising of products they produced independently."

The labels deny any wrongdoing, which should not come as a shock. The labels also denied earlier charges from the FTC of a much larger price-fixing scandal that cost consumers an estimated $480 million. The pigopolists agreed to settle that little incident by paying 41 suing states $67.4 million in cash and offering $75.7 million in CDs.

How many price-fixing scandals will it take before the government begins to question how serious the labels' losses to P2P file trading really are? Do grandparents and children pose more of a threat to the music industry than its own executives?

Even a cursory glance over the labels' sales figures for the last decade (PDF) show that music sales have held up far better than products from a number of industries - most notably IT.

As the tech industry imploded between 2000-2001, the labels saw revenue decline but 4.1 percent. From 2001-2002, music and DVD sales combined fell only 8.2 percent, and this is during a worldwide economic slump.

The labels' biggest losses, by far, come from a staggering drop in cassette, LP and vinyl sales.

A down economy and more competition in CD prices would seem to account for a large chunk of the downward revenue trends.

Also, keep in mind that the labels enjoyed tremendous growth throughout the 1990s - the prime price-fixing years, according to the FTC. Sales in 2002 were almost twice that of sales in 1993. Few industries have enjoyed such success.

Wouldn't it be tragic for the RIAA (Recording Industry Association of America) to put a stop to P2P technology because a few multi-national conglomerates can't milk consumers as in times past? As the economy begins to show signs of recovery, keep a close on those music sales figures. Don't be surprised to see them rise again with or without P2P's help. ®

Related Link

FTC statement

Choosing a cloud hosting partner with confidence

More from The Register

next story
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Spies, avert eyes! Tim Berners-Lee demands a UK digital bill of rights
Lobbies tetchy MPs 'to end indiscriminate online surveillance'
Scrapping the Human Rights Act: What about privacy and freedom of expression?
Justice minister's attack to destroy ability to challenge state
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
prev story

Whitepapers

A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.