Friday, December 30, 2005


COPYRIGHT/ANTITRUST: Spitzer looks at pricing of music downloads

Posted 12/27/2005 2:28 PM

Spitzer subpoenas music companies on download pricing

ALBANY, N.Y. (AP) -- New York Attorney General Eliot Spitzer is asking
several major music companies for information on wholesale prices for
digitally downloaded music as investigators consider launching an
investigation into pricing practices.

Darren Dopp, a spokesman for Spitzer, said the AG's office was making "a
preliminary inquiry" into pricing. He said it would take several months
for the office to launch a full investigation, if one is warranted.

Warner Music Group said in an SEC filing Friday that the subpoena it
received is part of "an industrywide investigation."

"We received a subpoena from Attorney General Spitzer's office. As
disclosed in our public filings, we are cooperating fully with the
inquiry," Amanda Collins, a spokeswoman for Warner Music Group, said in a

The Wall Street Journal reported that a spokesman for Sony BMG Music
Entertainment confirmed his company received a subpoena and that an
unnamed source close to Vivendi Universal's Universal Music Group
confirmed that company had received a subpoena.

Neither company returned calls for comment. Calls to EMI Group's offices
in New York and London went unanswered.

In September, Apple Computer CEO Steve Jobs publicly criticized music
companies, calling some major labels "greedy" for pushing Apple to raise
prices on its popular iTunes service. Record label executives have scoffed
at the suggestion.

In a speech before an investors conference, Warner Music Group CEO Edgar
Bronfman Jr. said that Apple's 99-cent price for single tracks ignores the
issue that not all songs are the same commercially and, like any other
product, shouldn't be priced the same.

Such discord has not kept the labels from licensing their music videos to
Apple. Still, as their contracts with Apple come up for renewal, the music
companies are seeking to improve their take.

"All the prices do seem to move in lock step," said industry analyst Phil
Leigh, who runs market research firm Inside Digital Media. "There has been
talk of raising prices for several months. I'm surprised (music companies)
raised the issue. It's clear the industry convention is 99 cents."

The subpoenas issued this month are not the first time Spitzer has looked
into the music industry.

In November, Warner Music agreed to pay $5 million to settle an
investigation into payoffs for radio airplay of artists. In July, Sony BMG
agreed to pay $10 million and stop bribing radio stations to feature

Spitzer also asked for documents from EMI Group and Vivendi Universal in
that probe.


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