Fresh on the heels of their resounding DRM success, Sony is now being accused of price fixing by online discount websites.
Running a website is obviously a less expensive way of moving product than having a traditional "brick and mortar" storefront. You don't have to pay for real estate, stock clerks, cashiers, store managers, etc. So if a normal store buys a CD for $6, they might have to sell it at $12 to make a decent profit, whereas a website could make the same margin at a $9 pricepoint. Normal retailers have been exerting pressure on Sony and other labels to set up a price differential to preserve their rapidly aging business model.
Sounds illegal to me. Probably is. Sony's line is that they're offering discounts to businesses that have staff that "build the Sony brand". I'd say a better way to build the brand would be to more more product, wouldn't you?
But no. Sony is interested in selling you a broken product at an inflated price.
BitTorrent is your friend.
Posted by ryan at November 15, 2005 02:14 PM | TrackBackI was right with you until the last line.
Posted by: stephenb at November 15, 2005 10:42 PMA commentator, the source of which escapes me at the moment, has noted that it's now safer to pirate a Sony CD than it is to buy it. The one might, maybe, have some kind of security risk involved, but the other has a bona fide rootkit with every serving.
Posted by: ryan at November 15, 2005 11:31 PMAlso agreed with everything except the last line. Free-market capitalism, yes; IP violation, no.
Posted by: Evan Donovan at November 16, 2005 05:18 PMConsumers will find access to the product they want for the price they're willing to pay. Piracy is the market's way of correcting for artifically and/or technologically inflated pricing, and it will continue to be a large-scale problem until labels find a new market equilibrium.
I object to current analyses of industry losses to piracy. I'm pretty convinced that most of the people who pirate music aren't people who would have purchased said music if piracy weren't so easy. People only have so much money to spend on CDs, and the presence or absence of pirate options doesn't change that number. So more music is out there, but I don't seen Sony posting losses that can't be accounted for in other ways, i.e. four years of disasterously awful pop music.
Now that technology has busted up the distribution monopoly, labels are going to have to offer a product and/or service that people are willing to pay for. People don't seem to be willing to pay for copies of data that doesn't cost anyone anything to reproduce, but they are still willing to pay for concerts and physical objects like liner notes and CD album covers.
The use of things like BitTorrent is capitalism at its best: the market is determining its own price.
Posted by: ryan at November 16, 2005 05:38 PMThat's what I yelled at the gas station attendant as I peeled out of the station with a tankful of gas. If they drop their prices, maybe I'll consider paying for it next time.
Just a joke; I dabble in the bitTorrent myself.
There's a difference. Copying CDs may indeed be a violation of copyright, but it is not theft in the traditional sense of the word. Unlike the example of the gas station, where you've materially reduced the substance of the owner, copying data does not affect the substance of a record label. Unless you're physically removing merchandise from a retail shelf, there is no theft. They've still got everything they had before.
Posted by: ryan at November 17, 2005 07:08 AMIf "everything they had before" includes potential customers, then you're mistaken. (I'm not defending the company necessarily, but you're going to have to rationalize better than that...)
Posted by: alice at November 17, 2005 09:14 AMI think its hard to argue that the uses of have in Ryan's "They've still got everything they had before" and Alice's "If 'everything they had before' includes potential customers" are identical -- surely a record company doesn't "have" customers in the sense that it "has" CDs (unless enslavement is one of the consequences of DRMs that we just haven't been made aware of yet...)
Posted by: rob at November 17, 2005 09:23 AMslightly off topic, but I have a question about bit torrent. it's all anonymous packets, right? if I installed it, would I be likely, if not probably, hosting pieces of all sorts of nefarious stuff? "borrowed" CDs dont bother me too much, but other nasty stuff might.
Posted by: bobw at November 17, 2005 09:28 AMalice: rob is right. I can't see "potential customers" belonging to anyone by any stretch of the word, legal or otherwise. I don't think I need to rationalize at all: it's up to you to show me how record labels are being deprived of something they own.
If you follow the "potential customers" schtick, you'd have to argue that any time you buy a used car, you're liable to the auto manufacturers for depriving them of a potential customer: you could have purchased a new car, but you got one from somewhere else. You would be criminally liable if you had taken one from a dealer's lot, but having simply gotten one through your own means, there's no theft involved. I say again, whatever legal damages record labels may be experiencing, it's not theft.
bobw: no. You're logging into a network dedicated to distributing a single file or collection of files. Your bandwidth only goes to moving packets from those files around. The opposite is true of Freenet, where you dedicate a chunk of bandwidth and drive space to be filled by... stuff. Could be anything. Neither you nor anyone else really knows. BitTorrent doesn't work this way.
Posted by: ryan at November 17, 2005 12:15 PMI don't really care at all about the money that the labels get. I agree that they artificially inflate prices. My concern is for the artists, whose work is being appropriated without compensation. If artists simply cut the middleman as much as possible and distributed directly through venues like the ITunes Store or downloads from Amazon, then I would be quite willing to bid the antiquated notion of record labels goodbye. And artists would get better compensation anyway.
Posted by: Evan Donovan at November 17, 2005 04:22 PMRyan,
I make no claim to innocence when it comes to IP violations. Au contraire. But as a matter of intellectual interest, how do you see copying CDs and DVDs as any different from allowing startup drug companies to take advantage of the R & D of rival firms and undercut them by commercially producing AIDs vaccines, for example, at the lower price which their reduced overhead allows them to offer?
Julian
Posted by: julian Wierenga at November 17, 2005 06:33 PMDr. Mask was just talking about low-cost AIDS drugs in Global Trends the other day, presenting them as basically a good thing, since it means that people in Africa can actually use them. Is there another side to the story that we weren't hearing? I wonder if the possibility of reverse-engineering will dissaude further drug research on the part of U.S. corporations.
Posted by: Evan Donovan at November 18, 2005 01:21 PMReverse-engineering is not a defense against patent or copyright claims under American law, but of course that restraint doesn't have as much force as drug companies would like vis-a-vis operations in other jurisdictions - Brazil, Thailand and India are among the countries that have threatened to wholly ignore IP rights in AIDs drugs.
The reason that there is so much debate over low-cost AIDs drugs is that the suffering resulting from their patent protection is proximate and severe: conservative estimates would likely run into thousands of deaths having resulted from Third World victims being unable to afford AIDs vaccines. The counter-argument, of course, is that if IP rights to drug formulae are not respected further research will not be undertaken and far more future deaths will result from the lack of innovation.
It's an impossible quandary to resolve with any confidence in terms of pragmatic consequences. A possible compromise is to maintain patent protection but shorten its duration. However, Congress would first have to undertake empirical research as to the reasonable probability of drug companies being able to maintain levels of profitability sufficient to encourage further R & D under such a system.
Posted by: Julian at November 18, 2005 02:17 PMI think the bigger problem is that there's this idea out there that people have a right not to die of AIDS. There is no such right.
Posted by: ryan at November 21, 2005 12:47 AM