May 10, 2000

11:50 AM

Although this story doesn't sound like much,the FTC coming down on Time Warner, the effects could be great. Time Warner has agreed to ban their minimum pricing on featured new CDs, admitting that for the last seven years, these compact discs have been artificially overpriced. Do you think making CDs cheaper for the first time in years had anything to do with all the attention mp3s have been getting from consumers?
posted by mathowie (5 comments total)

Didn' t you hear? CDs should actually be $34!
posted by icathing at 12:04 PM on May 10, 2000

Now now, icathing - that's a bit inflammatory. All the article said was that if CD prices followed the consumer index, they'd be $34. It's a bit of a shell game on their part, but not that much.

Matt, there's nothing new about price fixing. I think it has less to do with MP3 technology and more to do with the fact that Time Warner got caught with its hand in the cookie jar. Most likely, record stores filed a complaint with the FTC.

Oh, and MP3 has nothing to do with consumers. Consumers are people who *spend* money on music. ;)

*sigh*

I have a rant on the commodification of culture, but that's another story.
posted by solistrato at 12:22 PM on May 10, 2000

Um, to be fair, I believe that the system Time Warner had in place was at least partially designed to protect smaller stores. Titans like Best Buy (consumer electronics superstore) can afford to use CDs as loss leaders, selling them below cost and pricing smaller stores out of the market. I'm pretty sure Time Warner gets the same amount, per CD, from everyone, so they don't really care what you sell it for.
There was an article about this somewhere. I might even have found it here.
posted by lbergstr at 12:36 PM on May 10, 2000

> Of course, the most important component of a CD is the artist’s effort in developing that music.

Hmmm... then I wonder why that's not where the most important component of the *profit* goes?
posted by baylink at 2:19 PM on May 10, 2000

It'll be interesting to see what kind of restrictions the record companies place on retailers selling downloadable versions of their catalog.

Another interesting quote about CD pricing today in the SJ Mercury News:

"When companies introduced the compact disc at $15, roughly three times the cost of a record, they promised the price would drop dramatically when the CD factories were paid off. Discs, after all, cost less than cassette tapes to manufacture. That didn't happen."
posted by tomalak at 2:53 PM on May 10, 2000