Why Doesn't Digital Music Go On Sale?

Tuesday, March 07, 2006 | 10:57 AM
in Music

Ever wonder why online music never goes on sale?

The Justice Department has -- and is wondering if its merely a coincidence:

"The Department of Justice said Thursday it has opened an investigation into possible anti-competitive pricing of online music by the world's major music labels.

The probe closely tracks a similar investigation by New York State Attorney General Eliot Spitzer into the pricing of digital music downloads, sources familiar with the matter told Reuters.

"The Antitrust Division is looking at the possibility of anti-competitive practices in the music download industry," Justice Department spokeswoman Gina Talamona said, confirming an earlier Reuters report based on details from sources. She declined to comment further about the investigation.

One music industry source said that some subpoenas may have been issued already in connection with the probe, while other labels had been tipped off that subpoenas would likely be coming in the next few days."

Unidentified sources in Reuters and AP reports "the investigation seems to be focusing on whether the labels are in cahoots when it comes to setting prices for tunes. So far, nearly all the sites that offer online music sell singles for about $1 and albums for just under $10."

And these guys want to raise prices for individual tracks . . .


UPDATE  March 7, 2006  11:31am

Not surprisingly, the Music biz is mute over online price fixing charges. That's fairly typical of any Federal investigation.  Its something Martha should have known -- you either lawyer up, or you tell the truth.


U.S. Opens Probe of Pricing Of Online Music by Four Firms
WSJ, March 3, 2006; Page A12


U.S. Inquiry on Online Music
NYT, March 3, 2006

Looking for Pirates on the Inside   
Associated Press
Wired, 09:30 AM Mar, 03, 2006 EST


Online music price fixing probed
Reuters, March 3, 2006: 6:52 AM EST

DoJ Investigating Possible Price-Setting in Online Music Biz
By Tim Arango
NY Post, 03/06/06 9:32 AM PT

Tuesday, March 07, 2006 | 10:57 AM | Permalink | Comments (6) | TrackBack (0)
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Apple regularly offers free songs as a promotional tool. These songs are often by major artists, and so the labels must somehow be involved. Does this not count as a sale?

If you're talking about reduced prices to help move merchandise, that's often done to clear out inventory. But with online music sales, there's no inventory to clear out.

Posted by: andrew | Mar 7, 2006 12:33:07 PM

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