Why Doesn’t Digital Music Go On Sale?

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 . . .

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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.

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Sources:

U.S. Opens Probe of Pricing Of Online Music by Four Firms

ETHAN SMITH

WSJ, March 3, 2006; Page A12

http://online.wsj.com/article/SB114135679577588399.html

 

U.S. Inquiry on Online Music
JEFF LEEDS
NYT, March 3, 2006
http://www.nytimes.com/2006/03/03/technology/03music.html

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

http://www.wired.com/news/technology/0,70333-0.html?tw=wn_index_8

Online music price fixing probed
Reuters, March 3, 2006: 6:52 AM EST
http://money.cnn.com/2006/03/03/news/international/online_music.reut/

DoJ Investigating Possible Price-Setting in Online Music Biz
By Tim Arango
NY Post, 03/06/06 9:32 AM PT
http://tinyurl.com/fk4yx

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