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Investigation into Online Music Price Fixing?

Lord Blackadder said:
If anything, this might boost Apple/iTunes' reputation. The record industry claims that a tiered pricing model is appropriate, but it doesn't really cost more to produce a better selling album. The artist makes the music. Higher prices just mean higher margins for "The Industry" (funny that they call it an industry when the companies involved don't actually produce anything themselves).
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I'd disagree with you... I'm sure that there's much more money involved to make a Madonna record (production, studio time, advertising) than to make a starting band record...
 
Leverage For Apple?

~Shard~ said:
This shouldn't really come as a surprise - something like this was bound to happen. It will be interesting to see how Apple responds to this, especially since they're no doubt very busy right now talking to the movie studios about how to set up the pricing for the iTunes Movie Store. :D ;)
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I think you're right. It will certainly depend on the nature and the depth of the DOJ investigation, but I see this benefitting Apple's effort to provide a fair, evenhanded solution to providing digital media, extending to any venture into feature film access within the iTMS. Where some film studios might point to the success of the iTMS promoting Apple's products as justification for doing things strictly on their terms, the attention of the DOJ should serve to keep future partners at least a little more fair in dealing with consumers.
 
MacNut said:
The same should go for normal CD's too, why should I pay $19 for one CD and $12 for another with the same amount of songs.
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The price of CDs was supposed to drop significantly once they were they were the dominant form of permanent music distribution. It never happened, even though the cost of production is significantly less than that of tape.

What you noting is something more akin to value. Britney Spears people are willing to pay more to hear Britney Spears than they are David Corter*. Both available on iTunes. iTunes seems to be a good equalizer as far as value for cost goes.

It would be nice if all music downloads were made less expensive. I would love it if artists got more and if we also got more.

*I recommend David Corter's Aboriginal Blue Grass album from iTunes.
 
What is price fixing?
This would only be targeting Apple if they were working in concert with other online services-- all indications are that they are not (ie. there are different prices from different providers).

I think this is an extension of the investigations into CD prices a while back where the record industry was found guilty, if memory serves...

The question isn't why different music has different prices, or why Apple charges the same for all of its songs-- the question is whether the Recording Industry Ass. of America has collaborated on a pricing scheme rather than competing with each other and setting prices independently.
 
last night i saw tom petty's full moon fever for $5.99. that is an injustice. an injustice that benifits me, but an injustice never the less. i'd pay the normal $9.99 for it, but wouldn't pay $1.99 for anything by the black eyed peas. keep the system the way it is. it's working.
 
I am not a lawyer, nor do I play one on TV...can someone please spell it out in laymen's terms what this is all about?
 
Wonder Boy said:
last night i saw tom petty's full moon fever for $5.99. that is an injustice. an injustice that benifits me, but an injustice never the less. i'd pay the normal $9.99 for it, but wouldn't pay $1.99 for anything by the black eyed peas. keep the system the way it is. it's working.
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well if you were an honourable fellow you would send Mr Petty a check for $5. ;)
 
KREX725 said:
Awhile back there was a quote about Apple only making $.05 to $.10 per song. I think they were questioning Napster and Yahoo for trying to make money off of song sales. I believe this was also where they talked about selling the songs to sell the iPods (where they really made the money in the process).
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Also, whatever Apple's cut of the .99 is, they must still use that to pay for the following before they keep anything:

Credit card fee
Server hardware
Bandwidth
Electricity
Rent
Heating/cooling
Insurance
Staff (everything from customer service to maintaining the store)
Store R&D
Advertising
Etc.
 
Why shouldn't they make money off songs. Target/Best Buy/Circuit City all make money of CDs/DVDs sold. You dont think they carrying all those dvds/cds for the heck of it.
KREX725 said:
Awhile back there was a quote about Apple only making $.05 to $.10 per song. I think they were questioning Napster and Yahoo for trying to make money off of song sales. I believe this was also where they talked about selling the songs to sell the iPods (where they really made the money in the process).
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If the recording industry were to claim Apple dominates the download market and uses this leverage to intimidate competition ... would that line of thinking lead to an anti trust investigation ?

I dunno- I don't play a lawyer on line (or on TV).
 
Re: Analog Kid and price fixing

Good points, Analog Kid

This isn't a problem for Apple, and it will, in fact benefit them if the major changes/fines are imposed on the labels.

Basically what it appears to be is a classic oligopoly situation where there might be excessive cooperation among the Big 4. Even though Oligopolies are in competition with each other, there are certain price levels where even though the market supply and demand that would be achieved were there a bunch of firms having no control over pricing (perfect competition) is better for the marketplace, it is better for the individual companies to sell fewer goods at a higher profit, so that they all co-exist in parallel and mutually benefit each other.

The fact that Jobs was really hammering the companies for constantly pressing for a tiered purchasing system would indicate there's probably some fairly low-level minimal non-competition "wink, wink, nod nod" mutual lobbying agreement that was arranged among the execs, leading to this investigation.

And hi to everyone on the board, I'm new here, and while I've read the posts a lot, I don't post much yet.
 
stoid said:
Heh. Don't mess with 'The Steve'

Steve recently made reference to the 'greed' of the music labels, now there's this lawsuit. Coincidence? I think not.
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tis not a lawsuit.... :rolleyes:
 
nagromme said:
Also, whatever Apple's cut of the .99 is, they must still use that to pay for the following before they keep anything:

Credit card fee
Server hardware
Bandwidth
Electricity
Rent
Heating/cooling
Insurance
Staff (everything from customer service to maintaining the store)
Store R&D
Advertising
Etc.
Click to expand...

If I'm not mistaken, most of that is handled by Akamai(spelling??). I believe Akamai is paid more per song than Apple is. The figure that comes to mind is Apple gets about $0.04 per song, but I read that on the internet and everyone knows how reliable internet sources are.:)

Regardless, the only gripe the government would have with Apple would be they aren't getting enough money and are thus preventing all the other wannabes from competing. Any price fixing complaints would not be directed at Apple, only the record companies would be a target for this.
 
I seriously doubt Apple's losing money seeing as how they're like, what, millions if not not billions in revenue right now with a debt of $0
 
I beg to differ

I think this could be a disaster for Apple. It doesn't have anything to do with whether Apple makes much money or not. It has to do with domination and postioning to be a monopoly. It could be that in the contracts signed between Apple and the labels, there is a "most-favored-nation" status to allow the 99 cent price across the board. In the DOJ's mind, this could just be strong arming competition in order to lay the ground work for a monopoly.

Remember there are a lot of desperate people trying to take down Apple...there may be a few with some government access.

:(

I hope I am wrong.
 
Just think of it this way: it's not "collusion, price fixing, or improprieties"
instead, its called

golfing.

think about it, thats why they have golf course in Corporate America.

Credit on part of that goes to my Econ Teacher, SJH.

cheers
 
rickag said:
$0.04 per song, but I read that on the internet and everyone knows how reliable internet sources are.:)
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So, that's what? 40 million from iTMS? that seems a little bit low to me. Unless you mean $.04 profit, then that MAY be a bit more reasonable. Either way, we can agree they are turning a profit, and a pretty dandy one at that too.
 
I just dont want to buy music any more. I hear maybe 1 or 2 songs a year that I like enough to pay for anyway and could probably live without them too. As Steve says, It's just going to encourage piracy.

Nobody likes the music industry any more, Not even the musicians themselves.
 
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