Friday, January 23, 2004
Excellent piece from TFT re this week's pathetic ruling again cdwow.com
You may have heard the suited folk from record companies boo-
hooing about how not enough people go out and buy CDs any more.
So when the Hong Kong-based CD Wow started selling CDs in the UK
by the bucketload, stopping people downloading music for free,
and putting $$$ (£100m last year, to be sort-of precise) in
everyone's pockets, they did what you or I would do. They reached
for their army of lawyers.
Sure, CD Wow were making $$$, but in the wrong way. They were
buying them and selling them too cheap.
If there's one thing that keeps businesspeople awake at night,
it's a free market. The idea of unfettered trade where market
forces genuinely let people sell and buy what they like is fine
for economic textbooks and PowerPoint presentations, but not for
making money, thanks very much.
So even though the global market's forces told CD Wow the best
thing to do was buy these perfectly legal CDs from cheaper Asian
distributors, the global market had to stand aside. They're
cheaper for Asians because they have less money to spend there.
Because we can afford to pay more over here, the record companies
have decided that we should, and all CDs on CD Wow will now cost
an extra two pounds.
This is the *very opposite* of a free market. This is the modern
world offering an opportunity to shift more product - and a
business model which worked because the artificial mark-up wasn't
there. Well, now it's back. A record business insider said "it is
not the consumer that will suffer, just CD Wow's profit margins".
In one way - and only one - he's not lying, stupid and wrong. The
consumer *won't* suffer, because blank CDs are very cheap, and
KaZaA is even cheaper.
And that says it all, if we can't buy cheap cds, we'll download them.