Collusion

Secret agreements between companies can pass under the radar in some industries. Charging for music is a very public action, and it seems music labels and streaming services have been cooperating to fix prices for some time. It's time for artists and fans to speak up.

Collusion is Harming the Music Industry

The music streaming services – both interactive (like Spotify, Apple Music, Tidal, and others) and non-interactive (like Pandora) all have something in common:

The prices are are being set with little-to-no regard for the desires of the artist. Instead, the prices seem nearly uniformly consistent across platforms. This began, of course, when Apple introduced iTunes and effectively set the market price for downloads to be $.99 per song or $10.00 per album. In so doing, they also created the practice of platforms taking 30% of the gross revenue from these sales. This 30% number is now nearly an industry standard, even though there is no market-based evidence to support it being the “right” (i.e. market-clearing) fee.

We at Music Revolt believe strongly that the practice of industry-wide price setting, with little-to-no input from those whose works are being sold – the artists – has resulted in a terrible lack of competition, and thus a landscape dominated almost exclusively by massive companies who are setting prices in a manner that makes it difficult or impossible for other entrants to compete. The result is a failing, anti-competitive music industry that continues to grossly underutilize technology.

As a country, we have long attempted to avoid practices in which competition is unjustly limited in markets, via United States Antitrust laws; the most significant Acts of which include:

  • The Sherman Act 1890
  • The Clayton Act 1914
  • The Federal Trade Commission Act 1914

However, there is a ray of hope...

Rather than using a single price dominating the industry, Apple, Spotify, Bandcamp and Amazon are now using price as a means to attract customers. This is the American way of business. By continuing to apply pressure that forces free market pricing, we can ensure that the music industry continues to evolve.

If you believe that the music industry is violating long-entrenched economic standards via their price fixing and collusive approach, yet, still stand idly by . . . then the music industry you inherit will be the one you deserve.