UK Protectionism for Music Retailers

Tuesday, February 24, 2004 | 11:17 AM

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We mentioned recently that U.K. had record breaking CD sales in '03 -- up 7% year over year ("UK Albums Have a Record Year in 2003").

For a brief moment there, I thought the BPI (British Phonographic Industry) -- the British equivalent of the RIAA -- might have a better understanding of market forces than their foolish U.S. brethren.

[Sigh] . . . I was wrong. Two recent stories from the BBC makes it crystal clear that music execs in the UK suffer from the same sort of dementia associated with late stage syphillis all too common amongst music execs here in the U.S.

The first, "Amazon investigated over CD sales," notes the article:

"The British Phonographic Industry (BPI) is questioning whether Amazon was “selling CDs obtained outside the European Economic Area, contravening UK law.”

A BPI spokesman said: "This is a standard routine. We look at many websites to determine if the product is legitimate. If we find a net retailer is importing music from outside Europe, then they are infringing copyright law."

Many web retailers have built up their businesses by offering CDs considerably cheaper than high street shops. But there is a concern that products are being brought in from areas such as Asia, therefore bypassing import laws.

The second article, CD settlement forces prices up, notes that "An online music seller has been forced to raise its prices after settling out of court with the music industry in a row over imported CDs."

And here we just were pointing out how the UK had a more vibrant and competitive retailing environment for music than the U.S. I guess they just weren't happy with positive year over year sales increases. Let's smother that baby before sales really take off.

MY PREDICTION: U.K. music sales will do worse in 2004 than 2003.

Sources:
Amazon investigated over CD sales
BBC, 8 January, 2004, 17:55 GMT
http://news.bbc.co.uk/1/hi/entertainment/music/3380307.stm

CD settlement forces prices up
BBC, 21 January, 2004, 12:25 GMT
http://news.bbc.co.uk/1/hi/entertainment/music/3416437.stm

Tuesday, February 24, 2004 | 11:17 AM | Permalink | Comments (1) | TrackBack (0)
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Comments

The corrupt EU has given its blessing to this kind of anti-consumer enforced regional pricing (see Tesco vs. Levi's). There's no such thing as a First Sale doctrine here in Europe. This is similar to movie studios locking DVDs by region. Of course many consumers smell a fish and circumvent this collusion between European states and multinationals whenever they can (by buying cheaper apparel when they go to the US or by removing regional protection from their DVD players and buying stuff online). I've not bought a pair of jeans in Europe for at least a decade, and I likewise refuse to buy overpriced zone 2 DVDs. The pricing gap is even wider with the falling dollar.

The poor, less mobile, and English-impaired are getting institutionally screwed, which is par for the course here in Europe. But it's for our own good (sic).

Posted by: Olivier Travers | Feb 24, 2004 2:23:58 PM

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