USA Today reports that five of the largest music companies and three of the USA’s largest music retailers settled a CD price-fixing case. “Attorneys general in the two states, who were joined in the lawsuit by 39 other states, said that the industry kept consumer CD prices artificially high between 1995 and 2000.” And industry executives wonder why there is a rise in P2P file-sharing! Why a consumer would consider paying between $15-$20 for a music album that cost the music industry $2 to mass-produce is beyond me. This logic becomes painfully obvious when you consider that for a similar price one can buy a two-disc DVD set containing up to 6-8 hours of audio and video content in some cases versus 80 minutes of music at the most. I’ve been saying for some time that unless the music industry rethinks its business plan to allow for realistic consumer expectations and the new economic reality of the Internet then it will run itself out of business.

I also noticed that “the agreement will provide consumers with substantial refunds and result in the distribution of a wide variety of recordings for use in our schools and communities.” Although I heartily applaud the fact that this case was won, I’m wondering whether the average consumer will ever see a dime of that settlement. I guess the best we can hope for is slightly more equitable pricing for CDs, but somehow I doubt even that will happen in spite of the outcome.

Update: The Onion has a great satirical story about the RIAA in its latest edition…

Another Update: The Wall Street Journal has an interesting interview with Shawn Fanning, the creator of the now-defunct Napster, one of the first P2P file-sharing applications, and still my personal favorite.