By Jo Best, 22 January 2004 13:45
NEWS The row over so-called 'grey imports' of CDs took a major step towards being settled this week, with the British Phonographic Industry (BPI) and CD-WOW settling their differences out of court, and the music seller agreeing to stop selling CDs imported from outside Europe.
CD-WOW had been buying its stock from Asia, among other areas, and selling it to consumers in the UK at prices far lower than many of its high street competitors, with an average chart CD costing around £7.99.
With the case due to go to court in around two weeks, Philip Robinson, co-founder of CD-WOW, told silicon.com that commercial reasons had driven the company to settle out of court with the BPI.
Robinson said that the UK and Ireland were only "a percentage of [CD-WOW's] worldwide market" and that the company "could cope with" the impact of the settlement.
The decision isn't ideal for consumers, said Robinson. "For UK and Ireland consumers to have their wings clipped over what they can and can't do on the internet is outrageous...I don't see anyone doing well out of this [CD-WOW's sales] benefit the artists and benefit the industry. Now no one will be a winner and the UK consumer will be the loser," he told silicon.com.
While the BPI might be patting itself on the back on its victory, the UK consumer is unlikely to be quite so impressed about the settlement. CD-WOW will now be buying its CDs from inside the more costly European Economic Area, pushing the prices up by at least £2.
The BPI is currently investigating Amazon.com and Play.com for similar business practices. CD-WOW is also fighting a similar battle over grey imports in Germany, but believes that the situation in the UK and Ireland won't set a precedent in other countries.
The BPI's victory may be bad news for music fans, but given that the judgement only affects the selling of CDs, anyone buying computer games or DVDs won't see any rise in prices. However, Robinson added that CD-WOW would be working with suppliers in Europe to try to secure better deals and reduce the surcharge, which previously the importer had been unable to do because of the litigation.
Comments
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1. anonymous
Good move BPI I'm sure that will have more people downloading music for free, or buying copied CD's at the local car boot. :o)
2. anonymous
Global free trade - but only when it suits the supplier, not the buyer it seems!
3. Lee
Makes you laugh, dont it. The music industry want MORE money so they make us lose the option of buying cheaper. Why cant they adjust their prices to match. The cheaper things are, the more you sell.
4. anonymous
If there's a quicker way to get the British Back up, than telling us we have to pay more for something we know should be cheaper, then I'd like to hear it. What is the record industry scared of? Do they understand public opinion here? I feel that the industry is pushing people to the net for shared files as it's obviuos that if the CD's only cost £7.99 for CD-wow to import at a profit then the British public is getting screwed. Why should the record industry get £2 per import for nothing. This is what is generally known as price fixing which is surely illegal. Free market economy only applies those controlling the market.
5. gmg
once again bpi "scum" win a battle to get more money off us consumers...........I will just go back to buying copies.
6. Sam Wales
A few years ago i was buying alot of cds, i am a huge music fan with uncountable numbers of cds, i could see prices rising and i bought lesss and less cds then Napster came along, i downloaded many tracks and only bought the real albums if they were very good and worth the money, if not the copies were usualy discarded or planted at the back of a draw. Then came along the cheap cd websites (play cdwow etc) this reignited my interest in cds and soon enoug napster was closing downso i went back to spending alot of money on there properly priced cds, in my opinion i was winning and so was te industry,they had been complaining though that cd sales have dropped and what do they do about it..... rase prices! i for one am not going to to buy cds at this price especialy because i know its because of the system, i am intending to installl peer to peer software when these stupid band are imposed on other sites. If prices do rise again the industry will see the biggest crashes in sales ever in the uk and kazaa will see the biggest rise in downloads since someone put porno on there shared folder. If this had offended anyone im apologise for telling it like it is.
7. anonymous
I used to buy lots of CDs, but I decided the prices were unfairly high and kept that way by the industry, so made a concious decision to not buy any more CDs about 3 years ago. I discovered CD Wow about a year and a half ago and started buying from them. Now the BPI has stopped that route of reasonably priced CDs perhaps I should start making copies of them instead? I could always send the fair price directly to the artists involved anonymously, then everyone would benefit except for the greedy, lazy, ungrateful music industry executives.
8. P Biggs
UK Record industry only has itself to blame for falling sales. Unreasonable profits attract competition into the market place - first year marketing stuff! If CD had been priced more reasonably from the start then things would be different. I'd rather own CDs but by far fewer now they £16
9. anonymous
So... Global Free Trade now means: "We, the industry, reserve the right to buy materials and manufacture goods in whatever poverty-stricken country we can find that allows us to pay the workers about 50p a month, and ship the results all over the world without let or hinderance. On the other hand you, the consumer, will buy that very same product only after we've shipped it to your country so that we can gouge every last penny we think we can grab from each market."
Have they been taking lessons from the US government on protectionism or vice-versa?