DoJ probes online music pricing

Written by Geoff Richards

March 3, 2006 | 19:26

Tags: #downloads #ipod #itunes #new-york-attorney-general #piracy #sony-bmg #universal-music-group

Everyone's favourite sticky beaks, the U.S. Department of Justice, are at it again. The targets this time are the world's major music labels: EMI Group, Sony BMG, Universal Music Group and Warner Music Group.

According to sources familiar with the case and reported by Reuters, Sony BMG have already received a subpoena and the others on the hitlist have been told to expect special deliveries from the postman over the next week or so.

The New York State Attorney General, Eliot Spitzer, already has an investigation underway which is similar to this new action by the DoJ. Spitzer has already subpoenaed Warner Music Group in connection to antitrust investigations into the pricing of digital music downloads.

It seems while the world + dog is perfectly happy with Apple's 99-cents pricing policy, as evidenced by the recent sale of the one billionth track on iTunes, some music labels want to introduce variable pricing: relatively unknown bands would clearly be cheaper, while 'premium' artists would command higher prices.

That suggestion did not sit well with Steve Jobs. As we reported back in September, Jobs made it clear that any attempt by the recording industry to raise prices would be met with resistance. "If they want to raise prices it just means they're getting a little greedy," he said. "Customers think the price is really good where it is. We're trying to compete with piracy. We're trying to pull people away from piracy and say, 'You can buy these songs legally for a fair price.' But if the price goes up a lot, they'll go back to piracy. Then everybody loses."

Consumers have voted with their wallets for years. Music moguls wondered why sales of singles and albums decreased in recent times, yet conveniently ignored their own high pricing and manufactured pop garbage and instead blamed internet piracy. Now that buying music online using legal channels is both fast and relatively cheap, demand has returned and thanks to the immense popularity of Apple's iPod, the market is growing at a rapid pace.

Chart music is just as bad as before, but at least those who want to listen to it on their iPods can do so with ease. We will certainly be watching both cases with great interest, as a judgement either way will surely affect the current status quo.

We want to hear your thoughts on the price of digital music - is 99 cents the 'right price'? Would you support this new idea of variable pricing or did you give up paying for music years ago? If you won't spend 99 cents on a song, at least drop by the forums and have your 2 cents worth.
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