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A Penny for Your Audio CD Antitrust Settlement
By George Mannes
Senior Writer, www.thestreet.com
10/04/2002
We know what went through your mind when you read about the music industry price-fixing settlement announced Monday. You thought, "Finally! After paying out the wazoo for audio CDs over the past few years, I -- the little guy -- have finally won!"
Fat chance.
As we read all the David-beats-Goliath stories about the $143 million settlement this week, all we at the lab could think about was, "Doesn't anyone know how to do long division anymore?"
See, New York Attorney General Eliot Spitzer, for one, proclaimed that this "landmark settlement" to address years of price-fixing will provide consumers with "substantial refunds." But after working out the math, we're not so sure.
Let's start with the years covered in the settlement, 1995 through 2000. During that time, record companies shipped a total of 4.98 billion CDs into the U.S. market, according to the Recording Industry Association of America. That doesn't even include CD singles.
Now let's look at the $143 million settlement to be paid by the defendants in the case, which include AOL Time Warner, Sony, Vivendi Universal, Trans World Entertainment and Best Buy subsidiary Musicland Stores.
It turns out that only $67.4 million out of the $143 million settlement will be in the form of cash. The rest will come in the form of 5.5 million CDs distributed for free to "public entities and nonprofit organizations," at an implied value of about $13.75 apiece.
So there you go. Assuming the 43 states involved in the suit don't get a cut of the cash settlement for expenses -- again, fat chance -- you've got a $67.4 million cash refund to be divided among nearly 5 billion CDs. Do the math and you've got 1.35 cents per CD.
Wow. Think about it. If you bought 100 CDs over the years in question, you'd get a whopping $1.35 refund. If you'd bought 1,019 CDs, you'd get enough money back to go out and treat yourself to one of those $13.75 specials.
Forgive us if we're not impressed.
Spitzer's office, for what it's worth, says the settlement -- of which Eliot is so proud -- is not, in fact, final. There was no further comment.
User Comments
(These do not necessarily reflect the beliefs of this site)
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mcarp555
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Date: October 4, 2002 @ 9:36 AM
Hey, whatdya know!
First post!
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thumbtack
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Date: October 4, 2002 @ 9:40 AM
Ahem....ya got first post when ya submitted the article..... ;) |
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mcarp555
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Date: October 4, 2002 @ 9:47 AM
Hey, if I can't FP my own stuff. . . |
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wattzz
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Date: October 4, 2002 @ 9:48 AM
heh
first post on your own article.. nice |
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Remye
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Date: October 4, 2002 @ 2:04 PM
hrmm.. so with my little part of the settlement,(1.35.. sure.. I bought 100 cd's..right)I can supersize my McD's value meal AND get some ice cream? Oh wait, I need another fifty cents for that.. better dig in the couch cushions |
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goofycaca
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Date: October 4, 2002 @ 3:47 PM
Smokers know that smoking causes cancer but still get 28 billion dollar awards. The music industry bilks artists and consumers alike and we get a landmark 143 million? Even if the entire settlement was paid in cash it's nothing but chump change to the RIAA's billion dollar industry. The US court system is a joke and this is just another slap in the face to consumers world wide. This is not a punishment to a monopoly, it's a joke the CEO's are laughing over. |
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ElmerFusterpuck
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Date: October 4, 2002 @ 7:15 PM
Methinks it will be a lousy 10% off coupon, good only at Sam Goody or any other mall ripoff joint. It's just a sorry joke if you ask me. Now where's that pirate hat? |
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goldenpi
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Date: October 5, 2002 @ 4:19 AM
The US court system is a joke, and everyone knows it. Its infamous for the expense of using it. Money speaks in court because the winner is usually the person with the best, and therefore most expensive, lawyers. And if the rich side does manage to lose, they can always appeal. When its all over, after months or years of expense, it usually ends with the giant corporation winning and always with the small defence ruined, even if they do win. |
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DCD-MP3
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Date: October 5, 2002 @ 9:51 PM
GREED GREED GREEEEEEEEEEEEEDDDDDD!!!!! |
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TheWitchingHour
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Date: October 6, 2002 @ 2:21 AM
Why am I not surprised? Send me my coupon to me certified mail please.
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Fenderbenders
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Date: October 6, 2002 @ 3:28 PM
I own roughly lets see now hmmmmmm music that dates back orginally to the 1950's so are they gonna pay me for all the over priced albums and singles that I have collected over almost 3 decades of different media or is that just for CD's? Which I have thousands of dollars worth? Can I retire after they pay me? |
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oat
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Date: October 9, 2002 @ 10:16 AM
5.5 million cd's that won't sell distibuted to nonprofit entities, how about they just cough up 5.5 million cdrw's to be filled with yet more of the industries waste product(It would be a better promotional tool for sure. |
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DrChimpanzeeMD
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Date: October 13, 2002 @ 12:25 PM
You can't get rich suing the record industry. Lets all sue McDonalds for making us fat instead. |
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