Record companies subpoenaed over digital music pricing

Tuesday, December 27, 2005

On Friday Warner Music Group announced that it had been subpoenaed by the office of New York Attorney-General Eliot Spitzer to provide information about digital music download pricing. It has been reported that Sony BMG Music Entertainment and Vivendi Universal have also received subpoenas.

The subpoenas are thought to be connected to an antitrust investigation being carried out by New York Attorney-General Eliot Spitzer. The investigation is believed to be looking at whether Warner, Sony BMG, EMG and Universal have colluded to set wholesale song download pricing.

Will Tanous, speaking on behalf of Warner Music group said "As part of an industrywide 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 fully with the inquiry."

It is also thought that the investigation may be due to the music industry wishing to renegotiate pricing with Apple over its iTunes online store. The record companies have indicated that they wish to begin variable pricing on music downloads. Apple currently sells songs for $US0.99 each.

In September, Warner CEO Edgar Bronfman told an investor conference that "not all songs are created equal ... There are some songs for which consumers would be willing to pay more and some we'd be willing to sell for less".

Sources

"Spitzer's music probe said to expand" — CNN, December 26, 2005

"Warner Faces Music Over Pricing" — Techtree, December 26, 2005

"Studio cited in antitrust price probe" — The New Zealand Herald, December 26, 2005

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