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CDWow and BPI settle landmark case
The row between online retailer CDWow and the UK record industry over the sale of cheap CDs on the web has been settled just two weeks before the landmark case was due to go to court.
The British Phonographic Industry and CDWow today announced they had reached a settlement over claims that the online retailer was breaking the law by selling CDs from the Far East.
The reason that CDWow was able to offer chart CDs for £8.99 and under was because it bought them at lower wholesale prices in the Far East and sold them directly to consumers. The BPI argued that CDWow was breaking the law by importing CDs from outside the European Economic Area and selling them at cheaper prices than UK retailers without the consent of copyright owners. However, CDWow in turn argued that the company agreed deals with the record labels concerned overseas and didn't actually import the CDs, merely posting them individually to the UK from the Far East. Under the settlement announced today, CDWow has backed down and agreed not to sell CDs that have first been placed on the market outside Europe to UK and Irish customers.
The BPI chairman, Peter Jamieson, announced, "I am delighted that we have been able to resolve this case on agreed terms without the need for a trial.". The BPI is also looking at taking similar action against Play.com and US web retail giant Amazon.com.
The settlement is likely to hit CDWow's sales because it will now add a £2 surcharge to buyers from the UK and Ireland, explaining that the extra cost is as a result of the BPI's action. But while the major record labels have won their battle against CDWow, many industry insiders believe that they will come under increasing pressure to reduce the retail price of CDs in the UK in any case. As legal download services offering albums from £6.40 become more popular, high street retailers are likely to put more pressure on the labels to slash prices.
Already, Universal has agreed to cut the price of CDs by 25% in the US, and the UK Consumers Association is believed to be investigating the possibility of taking the UK's major labels to court over the price difference between CDs in Europe and the rest of the world.
Even Amazon.com could be drawn into the row because it sells CDs to UK customers that are not available in this country, undercutting traditional high street retailers. The BPI could argue that they are acting without the consent of UK record companies
The row between online retailer CDWow and the UK record industry over the sale of cheap CDs on the web has been settled just two weeks before the landmark case was due to go to court.
The British Phonographic Industry and CDWow today announced they had reached a settlement over claims that the online retailer was breaking the law by selling CDs from the Far East.
The reason that CDWow was able to offer chart CDs for £8.99 and under was because it bought them at lower wholesale prices in the Far East and sold them directly to consumers. The BPI argued that CDWow was breaking the law by importing CDs from outside the European Economic Area and selling them at cheaper prices than UK retailers without the consent of copyright owners. However, CDWow in turn argued that the company agreed deals with the record labels concerned overseas and didn't actually import the CDs, merely posting them individually to the UK from the Far East. Under the settlement announced today, CDWow has backed down and agreed not to sell CDs that have first been placed on the market outside Europe to UK and Irish customers.
The BPI chairman, Peter Jamieson, announced, "I am delighted that we have been able to resolve this case on agreed terms without the need for a trial.". The BPI is also looking at taking similar action against Play.com and US web retail giant Amazon.com.
The settlement is likely to hit CDWow's sales because it will now add a £2 surcharge to buyers from the UK and Ireland, explaining that the extra cost is as a result of the BPI's action. But while the major record labels have won their battle against CDWow, many industry insiders believe that they will come under increasing pressure to reduce the retail price of CDs in the UK in any case. As legal download services offering albums from £6.40 become more popular, high street retailers are likely to put more pressure on the labels to slash prices.
Already, Universal has agreed to cut the price of CDs by 25% in the US, and the UK Consumers Association is believed to be investigating the possibility of taking the UK's major labels to court over the price difference between CDs in Europe and the rest of the world.
Even Amazon.com could be drawn into the row because it sells CDs to UK customers that are not available in this country, undercutting traditional high street retailers. The BPI could argue that they are acting without the consent of UK record companies
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I know how to get £2 off CD's on CDwow anyway, so that'll knock that dog crap charge back off.
I wonder if something like this could happen to the DVDs sold online. Since play.com came along it's never been so easy to get DVDs from the states. Not sure how many months sooner you can get a DVD from the states than you could if you waited for an official UK release. Does anyone actually buy other region DVDs from places like play and cdwow? Anime fans tend to use them a lot.
Yep £2 is a lot per CD, and if Amazon US and Play are prevented from selling imports to us (strangely HMV and Virgin Megastore sell imports in their stores) then, well the CD burner in this PC hasn't had a lot of use since the PC was bought...
At a stroke this is going to increase piracy if they go after all online retailers. Just when they were getting somewhere it'll all be lost because it contradicts them.
The companies argued that piracy cost them, so piracy slowly drops thanks to legal downloads and a bit of legal action. Then "ha, we want to stop you getting cheap CDS despite less piracy"...
At a stroke this is going to increase piracy if they go after all online retailers. Just when they were getting somewhere it'll all be lost because it contradicts them.
The companies argued that piracy cost them, so piracy slowly drops thanks to legal downloads and a bit of legal action. Then "ha, we want to stop you getting cheap CDS despite less piracy"...
2 pounds might not sound a lot to some but then if you buy a lot of CDs it is quite a big difference. Whether people will complain or switch to downloading music instead I'm not sure.
All the big people!
When does this actually start then? Because on cd-wow.com, a lot of the CD prices have suddenly gotten even cheaper! Some of them are 6.99 now..
When does this actually start then? Because on cd-wow.com, a lot of the CD prices have suddenly gotten even cheaper! Some of them are 6.99 now..
What I'd like to know is to whom is that £2 going to...
Fools! I'll still buy from them though, but will still download albums if they're not cheap enough. I take it the DVDs are still gonna be the usual prices then. Hope so!
I just got my e-mail from CD-WOW about this - not happy!
Still, well done BPI - you've just increased the number of music pirates by at least one. Until now "the industry" has been getting money from me, because while I objected to the high-street price of CDs, CD-WOW had my business for the last few years.
As you've now forced them to pretty much charge high-street prices, I'll be downloading any albums I want in future, and you can go whistle for your cash elsewhere.
"Piracy is costing us millions! What can we do?"
"Here's an idea - lower the price of CDs, that'll encourage more people to buy them!"
"No, here's a better one... let's force online retailers to put their prices up, that way we'll make more money!"
"But... but... lower prices will increase sales overall, leading to larger profits in the long run!"
"No, we want our money NOW, before all of these teen drones burn out and earn us nothing!"
"Well, how about dropping the drones and looking for longer-lasting acts, like the next Beatles, Stones or Queen?"
"No, that's far too much like hard work! Up the prices, the public will pay!"
"No they won't. Up the record industry!"
Way to fight piracy, dudes!
Still, well done BPI - you've just increased the number of music pirates by at least one. Until now "the industry" has been getting money from me, because while I objected to the high-street price of CDs, CD-WOW had my business for the last few years.
As you've now forced them to pretty much charge high-street prices, I'll be downloading any albums I want in future, and you can go whistle for your cash elsewhere.
"Piracy is costing us millions! What can we do?"
"Here's an idea - lower the price of CDs, that'll encourage more people to buy them!"
"No, here's a better one... let's force online retailers to put their prices up, that way we'll make more money!"
"But... but... lower prices will increase sales overall, leading to larger profits in the long run!"
"No, we want our money NOW, before all of these teen drones burn out and earn us nothing!"
"Well, how about dropping the drones and looking for longer-lasting acts, like the next Beatles, Stones or Queen?"
"No, that's far too much like hard work! Up the prices, the public will pay!"
"No they won't. Up the record industry!"
Way to fight piracy, dudes!
Amazon Marketplace.
I'm never buying a £13.99+ CD again when I can get far rarer (and less rare) CDs for about £5 cheaper with postage.
I'm never buying a £13.99+ CD again when I can get far rarer (and less rare) CDs for about £5 cheaper with postage.
Thats ridiculous. If they're £10.99 for one now, they've lost the price lead they had. Play.com is cheaper, HMV and Virgin are even in some cases cheaper.
Hell, Amazon is cheaper even with postage!
It's a toughy for CDWow.
Hell, Amazon is cheaper even with postage!
It's a toughy for CDWow.
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