“Turns out that the labels were in collusion to price fix CDs at an elevated price structure.”
There is no such thing as price fixing (at least, not in that sense). There’s only what the consumer is willing to spend and what he’s not. If the price set after collusion between labels holds on the market, then it is the market price.
Oh, and by the way, the cost of producing cassettes has absolutely no significance this way or that.
May 14, 2000 — Retail prices of compact discs are likely to drop in the coming months, thanks to a Federal Trade Commission action ending an industry-wide price-support policy begun five years ago. On May 10, the FTC announced that it had reached an agreement with the “Big Five” of the music business—Time Warner Inc.’s Warner Music, Seagram Ltd.’s Universal Music, Sony Music Entertainment, BMG Entertainment, and EMI Group PLC—that will effectively end the practice of “minimum advertised pricing” (MAP) instituted as a response to music-retailing price wars in the mid-1990s. Under MAP, retailers were forbidden to advertise CDs below an established minimum, at the risk of losing millions of promotional dollars from the record labels.MAP, in the FTC’s view, is a form of price-fixing...