Spitzer Going After Music Business

    December 27, 2005

New York Attorney General Eliot Spitzer is going after the music industry and subpoenas have been filed in relation to an ongoing antitrust investigation into the pricing of music downloads.

Warner Music said they’d been subpoenaed last Friday and the Wall Street Journal confirmed over the weekend that both Sony BMG and Vivendi Universal were also serve papers regarding the investigation.

Reuters quoted Warner Music spokesperson Will Tanous saying, “As part of an industry wide investigation concerning pricing of digital music downloads, we received a subpoena from Attorney General Spitzer’s office as disclosed in our public filings. We are cooperating full with the inquiry.”

While Spitzer’s office could not be reached for comment, many speculate this is about collusion between Warner, Sony-BMG, EMI and Vivendi on music download pricing.

The reason this is really significant is because the record companies are preparing to renegotiate rates with Apple over the iTunes. Currently, the iTunes are extraordinarily successful but the industry wants to take pricing for some songs above the current $.99.

It’s going to tough for many to have much sympathy for these record companies after the Sony BMG fiasco, particularly since the record companies are wanting to raise the price for downloads.

While some have suggested Apple has a bottleneck on the digital download business, they may also be the only buffer for reasonably prices music downloads and even then, at current pricing, the cost is still roughly the same as a CD. One figures 12-15 songs and most discs one buys in various retails stores are any where from $8 to $20. There is no appreciable savings involved in purchasing through iTunes. It’s purely convenience. As Steve Jobs, CEO of Apple pointed out, if the public has to pay higher prices, they may well go to piracy.

John Stith is a staff writer for WebProNews covering technology and business.