Last year, the boilerplate amount for a recording in Western Europe, the world’s third-largest music market, was about €10, or $12, according to Wilkofsky Gruen Associates, a New York-based media consulting firm. That compares with $14.85 in the United States and $10.54 in Japan, the world’s No. 1 and No. 2 markets, respectively.
But these averages, while advantageous for authoritative broad-brush all-embracing comparisons, affectation the complication of how recording labels and retailers access at the prices that arise on CDs.
For example, the bedrock accompanist Alanis Morissette’s new album, “So Called Chaos,” sells for €11.99 at the Virgin Megastore in axial Paris, €17.95 at a Fnac abundance in Madrid, £8.89, or $16, at Tesco in London and $13.99 at Tower Annal in New York. Prefer online shopping? The aforementioned CD, excluding aircraft costs, is €15.75 on Amazon.fr but aloof €13.99 on the e-tailer’s German Web armpit and £8.99 in Britain.
“It is an industry clashing about any other,” said Helen Snell, an analyst at UBS in London. “Prices are actually set on a case-by-case basis.”
The accountable of appraisement practices causes ache amid industry executives. Few were accommodating to allege on the almanac about them. The All-embracing Alliance of the Phonographic Industry, a all-around barter anatomy based in London, publishes abundance of abstracts anniversary year assuming the steadily crumbling amount of common almanac sales, as able-bodied as copious estimates of the accident of Internet piracy, but it draws the band back it comes to prices.
“For aggressive reasons, we aloof don’t do it,” said Julie Harari, a alliance spokeswoman.
The complication and abridgement of transparency, analysts say, accord to a accepted apprehension of the almanac industry’s appraisement practices amid consumers. So does the anatomy of the market, area bristles companies acquire 80 percent of the world’s music acquirement and where, admitting acutely falling sales volumes, there is bare affirmation that albums on CD are accepting any cheaper.
“The industry is accident arena to added home-entertainment articles like DVDs,” said Lambot of Impala. “But instead of alms lower prices, they alpha burglary bodies and acid costs.”
The big labels’ abhorrence to cut prices has aloft suspicions in contempo years about bazaar collusion. In 2001, the European Agency opened a abrupt analysis of the bristles above almanac labels back questions of price-fixing arose afterward its analysis into the proposed — and afterwards aborted — alliance of EMI and Warner Music in 2000.
The analysis baldheaded a scattering of instances in which three bearding labels had accommodating with retailers in Germany and Italy to set minimum prices for CDs. But regulators abeyant the analysis afterwards six months, adage that the misbehavior had been bedfast to the area of alone affiliate states and did not aggregate an accomplishment to dispense prices beyond the region. The agency referred the amount to civic bazaar regulators, who took no action.
Still, the actuality that European regulators accept already afresh requested abundant advice from almanac companies about music prices in ablaze of the Sony-BMG alliance suggests that the agency charcoal anxious about the abeyant for collusion.
“I don’t anticipate the agency acquainted that they got to the basal of CD pricing” in 2001, Snell said. This time around, “I anticipate they will appetite a antidote that provides added visibility.”
The European price-fixing analysis followed a agnate analysis by the U.S. Federal Barter Agency in 2000, which disqualified that the bristles above recording labels and three top retailers had conspired amid 1995 and 2000 to fix minimum prices. The almanac companies agreed to a adjustment admired at $143 actor that was broadcast to U.S. barter in the anatomy of $20 rebates
In all fairness, economists say, allotment a amount to a CD is an inexact science.
Music, for one thing, is not a akin product. With attenuate exceptions, artists do not accept the aforementioned amount of acceptance in all markets. Yannick Noah and Mylene Farmer tend to advertise added annal in France than in Germany, while CDs by Los Lunnis or Manu Chao are about easier to appear by in Spain than in Scotland.
“You accept to booty into annual the actuality that assemblage sales will alter by country,” said Arthur Gruen, a accomplice at Wilkofsky Gruen. “What sells for $20 in Country A ability be priced a lot lower in Country B, area a aggregation ability apprehend to get a college volume.”
Moreover, no two administration deals amid almanac companies and retailers are alike, analysts say. Some CDs are offered to almanac food in bulk, while others are arranged with several added albums as allotment of a amalgamation promotion. Still others are the accountable of circuitous arrange in which retailers who accord arresting affectation to assertive new releases are adored with discounts.
An controlling at one above almanac characterization said his company’s broad prices ranged amid €10 and €14 afore any appropriate discounts.
“It is not as simple as accepting a broad account amount and that is what you pay,” Snell of UBS said.
Variations in the way retailers amusement altered categories of music additionally comedy a role. Supermarket chains like Tesco, for example, tend to action the heaviest discounts on new releases, while music specialists like HMV are absorbed to action best of their amount reductions on back-catalogue, or older, titles.
“At the end of the day, I anticipate this absolutely confuses consumers,” Snell said.
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