Although MAP does not force retailers to actually sell CDs at a certain price, the suit contends that restrictions on advertising, which is normally paid in full by the distributor, accomplishes this end. This price fixing argument may be tempting given the inexplicable differential between the cost of CD production and the CD price charged to consumers. However, every retailer is charged the same regardless of locale or mode of sale, including many Internet retailers that offer discounted CD prices. Thanks to today s technology, consumers are presented with more options for music than ever before. The Internet s comparison-shopping model will bring down prices as discerning consumers comparison shop.
Net revenue has as much to do with sales volume as it does profit margin.
Moreover, new distribution systems are coming into being. By the end of the year, EMI and Sony music will offer subscription-based downloadable music services. All of these realities makes the Attorneys General suit imprudent and anachronistic. Once again, unnecessary litigation discourages desirable innovation. By the time this costly suit concludes, it is likely that music distribution will have undergone a fundamental transformation.