Perhaps you’ve wondered, in times of mental clarity, why it is that a digital album tends to cost an amount comparable to a CD when the cost of distributing digital music is more or less $0. Adults and children alike have pondered this idea for years, but one group has never spent a single second thinking about it and in fact believes it to be a silly non-issue that should probably be ushered away into an oxygen-free chamber: the major labels. Sony BMG Music Entertainment, Capitol Records, Bertelsmann, EMI Group North America, Capitol-EMI Music, Virgin Records America, Time Warner, UMG Recordings, and Warner Music Group all have no idea how this relates to them and their controlling 80% of digital music sales in the US, and besides, they’d need some time to collect their thoughts before they made a statement one way or the other so if you’d please step into this limousine with tinted windows and let them give you a complimentary ride home they’d be much obliged and thank you so much for your concern.
Unfortunately you get no breaks when you’re at the top (don’t I know it), so the question has lingered in the air, and now all the labels mentioned above are going to have their mouths pried open, because U.S. District Judge Loretta Preska has allowed a consolidated class action lawsuit against them to move forward. The suit claims that the major labels collectively made distribution agreements with two joint-venture entities, MusicNet and Pressplay, for the purpose of fixing prices, terms of sale, and restrictions on digital music. Hidden from the public in each agreement was a most favored nation clause that allowed a price floor of $0.70 per song to be set across the board. Online retailers like eMusic were initially shut out of doing business with the major labels until they agreed to start selling their music for higher prices, and the suit further claims that less-than-loved DRM was included to make digital music less attractive than good ol’ shiny, higher-priced CDs.
It remains to be seen how far the lawsuit will go and what consequences the major labels might reap for their alleged shenanigans, but I think we can all at least agree that it’s fun to watch music industry fat cats get their collars all greasy with flop sweat. Turn up the heat, Judge Preska!
