Karaoke Forums

Not originally. Pioneer laser discs weren't originally sold to the general public and as far back as 1996 it was suggested to SC and others, to increase the price of discs to put them out of reach of the general public -- in order to keep the prices of the discs up and the price of gigs that "entertainment companies" could charge. And that was about $300 for a single night.... with a very teensy library. Primarily to make entry into this business more difficult for the average Joe... so the industry wasn't overrun by KJ's... like it is today.

Do they call that "Price Fixing"?

No, unless it was collusion by manufacturers. Unfortunately (or fortunately, depending on how you look at it), the manufacturers could NOT agree on anything together including the time of day, and you see where we are today: karaoke on every corner, KJ's working for tips, etc...

Now, if you want to discuss the letter that SC sent out dated September 22, 1998 to distributors re: UNILATERAL SALES AND DISTRIBUTION POLICY it specifically stated:



The "policy" was fairly simple and it was -- as described -- "voluntary" for distributors to participate but if you didn't volunteer (to sell the product at the prices mandated in the "unilateral sales and distribution policy price list", you'd lose your distributorship of their product.

The letter described how both Amazon.com and CDNow.com had lost their distributorships; "as a result of confirmed violations of our Sales and Distribution Policy"

Sounds like it was price fixing to me.... (walks like duck, smell like a duck....)

You mileage may vary...

The fact that you think that sounds like price fixing proves that you don't know what price fixing is.

What you're referring to is actually a minimum retail price maintenance policy, which is NOT price fixing. In 2007, the Supreme Court held that minimum RPM is subject to "rule of reason" analysis, and that arrangements that are on balance pro-competitive are legal. The case is Leegin Creative Leather Products, Inc. v. PSKS, Inc.

Minimum RPM is usually pro-competitive because it leaves more profit for the retailers and gives them the incentive to invest in sales and service to increase their market share.

But by all means, let's falsely accuse SC of a crime because it feeds your obsession.

It's also why Frito-Lay prints a retail price directly on their products. They (and thousands of other companies) have minimum retail price agreements with retailers. It is a very common practice.

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-Chris

Have I mentioned that I believe analogies are essentially worthless, other than to create generally hollow conversation?

Anyway...apparently someone doesn't shop at Walmart: You would be hard pressed to find a single item on the chip aisle that sells for the price stamped on the bag...most are 10-20% lower...

Lets talk price fixing.. Not weasel words..

My sister in law was executive secretary for a major refinery CEO.

Every week he held a conference call with all the other refinery bosses to discuss the rate to charge for fuel that next week.

I feel that is price fixing.

During the first "Giant Gas Shortage", the Chevron refinery in Manhattan Beach CA. had 30 fully loaded tankers parked offshore, with the on site tanks full also.

Because the US was "OUT OF EFFIN' GAS" the prices went sky high.

The US was not out of gas, it was a scam to raise prices.. (See above^^)

If two companies decide to price a similar product at a high rate, is that price fixing?

or simply a minimum retail price maintenance..

Yes, that's horizontal price fixing. Competitors agreeing to charge a certain price for a commodity is price fixing, by definition, and it is per se illegal (i.e., it is presumed to be anti-competitive) under the Sherman Act. There are potential civil and criminal penalties.

The other activity--hoarding a commodity to produce an artificial scarcity--could be illegal as well. Whether it is illegal or not is determined according to the "rule of reason," under which business practices that affect competition and markets are analyzed according to whether they have pro-competitive or anti-competitive effects, based on the kind of activity, the market, the market power of the participants, and other relevant factors.

Sounds to me exactly what SC was doing.... forcing "competitors" (retailers) to "charge a certain [retail] price" for their product - or lose the product entirely. You can call it a Swan all you want, it's still a duck.

This only proves that (a) you've never been to law school or made any significant study of antitrust law and (b) are constitutionally incapable of anything other than hatred for SC, no matter how misguided or counterfactual that hatred might be.

Price fixing is a horizontal agreement among competitors to fix prices for a commodity. When a supplier requires a minimum retail price, it's not price fixing because it's not horizontal; it's vertical. There is no agreement among competitors to fix prices.

Consider the following: A producer has a wholesale price of $12.50 and wants to ensure that its products are not sold by retailers for less than $25 (to pick a number). It could impose minimum RPM, or it could raise the wholesale price to something just below $25, say $24. The second option is unquestionably legal, but its effect would be to drive retailers out of the market or force consumers to pay prices even higher than $25. That's not a desirable effect; it's anticompetitive even though it is legal. Minimum RPM can ensure that the producer's goals are met while preserving the competitive relationship among retailers. Such an arrangement, being procompetitive in comparison to the alternatives, would likely be found to be legal by any court that examined it.

On the other hand, let's say the wholesale price is $12.50 with no minimum RPM. If retailers get together (without producer input) and agree not to sell for less than $25 (or any other price), that's price fixing, and it's per se illegal.

Sorry but that is wrong.

It would only be illegal if several manufacturers (say Sound Choice, Zoom, etc.) sat down and talk about charging exactly the same or inflated rates across the board. That's price fixing.

If you want to buy an iPad, you are going to pay the same amount for the same model regardless of where you go +/- a few bucks. That makes it so everyone who sells the product has a fair advantage of getting the sale. Retails who drop the way below a certain threshold (Say $300 for a $400 product) may be subject to losing the ability to carry the product, because they are creating an unfair advantage to sell more product. Samsung now does the same thing with it's tablet, but the two companies do not agree to sell a similar product for exactly the same price. (Samsung and Apple love to sue each other all over the world, so there is zero reason for them to price fix together anyway)

That's the difference That SC is talking about. They can charge whatever they like for their product. If they think they can get $5/song that is their choice. Since it seems that they will be the ONLY vendor for their songs, it is up to the consumer if they want to buy it or not. If you think a Zoom track sounds better for $2, don't like to deal with Sound Choice, or any other reason you might have, SC can't force you to buy their track over another company.

That being said if say SC blocks a product from selling in the states... that's another story. As Zoom has pulled up stakes for now selling to the US and Canada, Sound choice will most likely have a BETTER chance of selling tracks (Less competition). If SC tried to block another new karaoke manufacturer from entering the market (By doing some form of "Bullying"), that would be illegal.

I think that covers it... but their might be some variances in the above circumstances, as I am not a lawyer.

TM

Not being a lawyer, I could be wrong but having a minimum retail price requirement isn't price fixing. If the minimum retail price was $17 that does not mean that a store could charge $25 for the exact same product if they think the market will bare that price.

My retail brick and mortar karaoke store still charges up to $30 for a CDG disc, which is why I don't buy from them, but they still must make some sales, because they are still open even after the crappy economy and the stupid rules that exist in the us and Canada regarding downloads..

-James

No one says you can't go higher then a minimum retail price, just lower. It's a silly practice, but some people would rather pay an extra $5 and have the CD/product that very second (I have been guilty of this). Score one for instant gratification!

Others may not know/care to go online and look for a cheaper price, and home users might just want that one CD....

I wish we still had a place to buy CDs locally They went down long ago, and I miss them big time. It was my 2x month guilty pleasure to see what was new, hear what was trending, etc. ::sigh:: the good old days....

TM

Couldn't resist could you?..... (I didn't think so.)


You crack me up... It is absolutely horizontal because it is imposed and required by the supplier with the retribution or penalty of losing the product line entirely - therefore, there are "no competitors" to engage in a classically described "horizontal" direction. Amazon and CDNow.com are a perfect example. They wanted to sell the product at a price that suited their business models, not the supplier's. Their penalty was to have the product withdrawn entirely. SC wasn't going to be paid any less for their product because of this.



This is how you present your "authoritative sounding" message? Really? The operative phrase here is: "would likely be found to be legal by any court.."

First, if the supplier raised their price to $24 then NONE of the retailers would want the product because it woulnd't be profitable enough to put on the shelves. So, I'd have to agree with you there: it would "drive ALL the retailers out of the market." No matter what the quality of the product is. If it's too expensive to sell, no one will sell it even if there are buyers at the higher price.

HOWEVER, the "imposed RPM" is nothing more than a horizontal agreement that has already been imposed by the supplier. Retailers don't have to get together and "agree" to anything, it's already been decided for them and the penalty is to lose the product entirely if you don't -- in Sound Choice's case -- "voluntarily acknowledge reciept" of the policy and the letter specifically stated that receipt was "not an agreement."

But it's "still a duck" because the agreement had real repercussions if you didn't "voluntarily agree" and you can ask Amazon or CDnow.com if you'd like.



Yes, that's the "retailers get together" and not a "producer's policy." The final customer is the one that is denied any kind of "competitive action or advantage" between retailers.

Ethics....

It's all ethics....