Check this shit out........
Los Angeles - January 2002.
Major labels, who griped to the California Legislation just two month ago that they had no money to pay artists due to illegal downloading, will now have to pay $67,375,000 to millions of consumers who actually bought CDs. But not everyone who bought CDs, only those who bought them on sale.
Diverting the cost of a trial, major labels succumbed to government pressure and agreed to pay damages to consumers who bought CDs at discounted prices. Stores like Best Buy sold CDs at or below cost and then insisted that labels still pay promotional fees for "in-store placement." (Record companies pay a $40-60k per month "floor rental" fee for the life-sized cut-outs of the artist for promotion of a new release.) When the labels refused to pay the fees unless the discount stores raised the price of CDs to at least 80% of list (a policy known as MAPS) they earned themselves a visit from the Attorney General.
Labels sell CDs at a fixed wholesale price of about $10. Even though record companies don't make more money if the CD retails for $16 over $11, Attorney Generals in 43 states feel that because labels collectively pressured discount outlets to compete less aggressively with large media chains (like Tower Records) they now owed Joe Consumer the difference between the lower price, that he paid for CDs, and the higher, sticker price that he SHOULD have paid. (The logic of this only works in the bizarre-o universe of anti-trust law.)
It's not very clear to anyone in the legal profession how justice is served by this decision. Apparently it is illegal to refuse to treat a new store, whose model is to use your product as loss leader, with any prejudice over one that has supported your industry for 50 years. "Every industry does some from of MAPS, but only the music industry has the arrogance to discuss it openly in the trades," said a marketing VP at large web-based media company.
Despite the fact that legal notices for collecting the $20 share have been published in TV Guide and other national magazines (like Billboard which is read by virtually no record buyers), only about 30,000, out of the alleged millions of the class that saved money, signed up to collect. So, do record companies get to keep the unclaimed $66,775,000? No. If more respondents don't respond, the AG disperses the balance to charities. (Some charities will likely include pension funds for retired Attorney Generals.)
So, if you're telling yourself, "Darn I wanted to pay more for music." Or, "I think it's horrible that labels don't support slash-and-burn discount stores who use their product for fodder," then take this opportunity to prevent money from going into nebulous government coffers and, at the same time, get a payback from the majors. To collect approximately $20 per person go to www.musiccdsettlement.com. (SS and DOB required.)
However, before you do this, bear in mind that each individual's share of the settlement money diminishes with each respondent. At some mathematical singularity no one gets more than a $1; except the lawyers, of course, whose $15 million cut is taken off the top. Also, the website makes no claim to privacy for information you are required to give..
FREE CDs TOO?
Yes. In addition to the $67 million pay-out Majors will also have to give away about $75,500,000 in "free CDs" to public non profit groups. Some labels are claiming that artists chosen for these giveaways will be paid their royalty even though the CD was part of the settlement. Others say, no, these are "free goods" and no royalty will be paid. Regardless, no label has
posted a list of chosen titles. Without that data, artists will find it impossible to audit. Come the quarterly royalty statements many big acts will be told that their records were part of this settlement when the greater likelihood is that every public library and homeless shelter in the country will have three fresh cutout copies of the Glitter soundtrack.
WHAT DOES ALL THIS MEAN TO YOU?
While there are always those shortsighted people who will see this as a victory for the consumer, it also means a major blow to the business model of record companies, which is ultimately NOT good for consumers of CDs. The controversy of weather or not file sharing has hurt the record industry is now completely eclipsed. The one area that we all could agree upon as a factor in record companies making money-selling records in stores-has been legislated. And in light of the announcement that Sam Goody, Warehouse and other major chains are closing hundreds of record stores because they cannot compete with the Best Buys of the world, a strong message has been sent: The music retail Armageddon has arrived and the Attorney General is carrying the torch.
Los Angeles - January 2002.
Major labels, who griped to the California Legislation just two month ago that they had no money to pay artists due to illegal downloading, will now have to pay $67,375,000 to millions of consumers who actually bought CDs. But not everyone who bought CDs, only those who bought them on sale.
Diverting the cost of a trial, major labels succumbed to government pressure and agreed to pay damages to consumers who bought CDs at discounted prices. Stores like Best Buy sold CDs at or below cost and then insisted that labels still pay promotional fees for "in-store placement." (Record companies pay a $40-60k per month "floor rental" fee for the life-sized cut-outs of the artist for promotion of a new release.) When the labels refused to pay the fees unless the discount stores raised the price of CDs to at least 80% of list (a policy known as MAPS) they earned themselves a visit from the Attorney General.
Labels sell CDs at a fixed wholesale price of about $10. Even though record companies don't make more money if the CD retails for $16 over $11, Attorney Generals in 43 states feel that because labels collectively pressured discount outlets to compete less aggressively with large media chains (like Tower Records) they now owed Joe Consumer the difference between the lower price, that he paid for CDs, and the higher, sticker price that he SHOULD have paid. (The logic of this only works in the bizarre-o universe of anti-trust law.)
It's not very clear to anyone in the legal profession how justice is served by this decision. Apparently it is illegal to refuse to treat a new store, whose model is to use your product as loss leader, with any prejudice over one that has supported your industry for 50 years. "Every industry does some from of MAPS, but only the music industry has the arrogance to discuss it openly in the trades," said a marketing VP at large web-based media company.
Despite the fact that legal notices for collecting the $20 share have been published in TV Guide and other national magazines (like Billboard which is read by virtually no record buyers), only about 30,000, out of the alleged millions of the class that saved money, signed up to collect. So, do record companies get to keep the unclaimed $66,775,000? No. If more respondents don't respond, the AG disperses the balance to charities. (Some charities will likely include pension funds for retired Attorney Generals.)
So, if you're telling yourself, "Darn I wanted to pay more for music." Or, "I think it's horrible that labels don't support slash-and-burn discount stores who use their product for fodder," then take this opportunity to prevent money from going into nebulous government coffers and, at the same time, get a payback from the majors. To collect approximately $20 per person go to www.musiccdsettlement.com. (SS and DOB required.)
However, before you do this, bear in mind that each individual's share of the settlement money diminishes with each respondent. At some mathematical singularity no one gets more than a $1; except the lawyers, of course, whose $15 million cut is taken off the top. Also, the website makes no claim to privacy for information you are required to give..
FREE CDs TOO?
Yes. In addition to the $67 million pay-out Majors will also have to give away about $75,500,000 in "free CDs" to public non profit groups. Some labels are claiming that artists chosen for these giveaways will be paid their royalty even though the CD was part of the settlement. Others say, no, these are "free goods" and no royalty will be paid. Regardless, no label has
posted a list of chosen titles. Without that data, artists will find it impossible to audit. Come the quarterly royalty statements many big acts will be told that their records were part of this settlement when the greater likelihood is that every public library and homeless shelter in the country will have three fresh cutout copies of the Glitter soundtrack.
WHAT DOES ALL THIS MEAN TO YOU?
While there are always those shortsighted people who will see this as a victory for the consumer, it also means a major blow to the business model of record companies, which is ultimately NOT good for consumers of CDs. The controversy of weather or not file sharing has hurt the record industry is now completely eclipsed. The one area that we all could agree upon as a factor in record companies making money-selling records in stores-has been legislated. And in light of the announcement that Sam Goody, Warehouse and other major chains are closing hundreds of record stores because they cannot compete with the Best Buys of the world, a strong message has been sent: The music retail Armageddon has arrived and the Attorney General is carrying the torch.
