Friday, January 5. 2007
Link.
A fresh crop of lawsuits filed on behalf of individuals argue that it's the big companies that are ripping off the consumer.
Tucker's suit comes on the heels of a March, 2006 class action filed by Scott Ruth against music industry players including Sony BMG Music Entertainment (owned by Sony (SNE) and Bertelsmann Media), Universal Music Group, Time Warner Music Group (TWX), and EMI (EMI). Ruth, an Arizona resident, argues that the labels are violating antitrust agreements by using DRM to prevent music from being sold by a variety of retailers, thereby stifling competition that could keep prices down. Both Ruth and Tucker's suits seek compensation for music download customers as well as a change in the restrictions...
What's more, eMusic has seen steady growth. It is now the No. 2 music service after iTunes, based on volume of songs sold (Apple sells about 1.8 million songs a day). On average, eMusic customers buy 20 songs a month, spending about $168 a year on songs, says Pakman. The average iPod owner buys fewer than 15 songs a year per owned iPod (see BusinessWeek.com, 11/21/06, "Online Music's Elusive Bottom Line").
Pakman sees the number of songs his customers buy as evidence that songs can be progressively priced in a way that reflects demand for particular songs and discourages piracy. Elliott Breece, co-founder and CEO of Amie Street, concurs.
Songs at Amie Street start free and then become gradually more expensive as they start to sell. Prices are capped at 98 cents, a penny less than the price for each iTunes song. Amie Street has sold more than 70,000 songs since its October launch. Breece says that Amie Street wouldn't be able to compete if users couldn't download songs and play them wherever they wanted. "People want to buy and own stuff," says Breece. "In a lot of ways DRM isn't really natural."
