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Friday, April 12, 2002
price fixing since 1996 caused CD sales slowdown
[01:08 PM EST - link]

since 1995-96, when both the FTC and 28 states' Attorneys General maintain that the major record labels colluded to fix prices for compact discs, the RIAA's figures show a steady increase in the average price of a CD. the numbers also reveal that while the labels were engaged in price-fixing the overall sales of CDs slowed relative to the preceding period of aggressive price competition.

from 1992-96, a period that saw cut-throat price competiton from discount retailers like Best Buy and Target, sales of CDs grew 371 million units (from 400 million units to nearly 780 million units). once the labels started to enforce "minimum advertised pricing" (MAP) on the retailers, that sales growth started to slow. the RIAA reports that from 1996 to 2001, annual sales went from 780 million to 880 million units, an increase of only 100 million CDs in five years.

another interesting fact: the years with the steepest price increases also corresponded with declines in the number of CDs sold. 2001, the year that the RIAA's been trying to make the "Year of the Peer", saw the largest average price increase since the price-fixing began (around $.62 per CD).

update: ever wonder why you can't just buy the songs you like rather than the whole album? because the record labels don't want to give you that option. see how their strategy might have contributed to their lousy year.