The Big Picture: 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.”
I thought this nugget in comments was very insightful:
I don’t think that anyone would say that the $.99/track price is the result of market forces; there have got to be thousands of tracks on iTunes that have never been downloaded. Since there’s no real “inventory” costs for these tracks, if the labels priced an un-demanded track at $.01 and had one download, they’re still better off than they’d be selling zero at $.99.
I would be interested to see statistics on how many tracks are available on iTunes for which there is statistically no demand. It would be a good indication of just how little most of the intellectual property of the majors is actually worth.
We all know what a cakebox of CDR media costs, and I think we can assume the pressing plants might pay even less. So the cost of media-less music is $9.99 for what we called an album back in the day. The list price (what you might pay in a low-volume shop or extortionate mall outlet for Coldplay’s latest is $18.98 — almost double that. Even at Amazon, it’s $13 and it’s not like I can listen to it for a week or so.
I dunno, but I’m feeling like someone’s trying to rip me off.