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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Rande Is who wrote (16844)	12/16/1999 1:14:00 PM
From: Bob	Respond to of 57584

Rande: more news on CDNW: Sony, Time Warner face the music on CD pricing By Bloomberg News Special to CNET News.com December 16, 1999, 9:00 a.m. PT WASHINGTON--Sony and Time Warner are negotiating with the Federal Trade Commission to resolve allegations that they and other major music companies pressure retailers not to discount compact discs, a person familiar with the talks said. The talks come two years into an FTC investigation of a common music industry practice of giving advertising money to retailers only if they agree to sell CDs above a specified price. The discussions, first reported in today's Wall Street Journal, are part of the FTC's investigation of the proposed combination of music and video retailer CDNow with the Columbia House music club, which is owned by Sony and Warner, a source said. If successful, the talks could clear the way for that acquisition. An agreement also could induce other music companies to drop their own minimum CD price programs. The FTC is looking into similar marketing practices by EMI Music, Seagram's Universal Music, Bertelsmann and PolyGram Holding. Recording companies routinely offer to pay for a retailer's advertising of particular music CDs if the retailer agrees to sell those CDs for more than a specified minimum price. Retailers are free to accept or reject the cooperative advertising programs and may sell CDs at any price they wish if they don't participate. Representatives for Sony and Time Warner's Warner Music unit weren't available for comment. A representative for the FTC didn't have any immediate comment. A CDNow spokeswoman said the company expects to get antitrust clearance by late December for the Columbia House combination. "Time Warner and Sony are working with the FTC to resolve the outstanding issues," CDNow spokeswoman Marlo Zoda said. "All aspects of the merger are proceeding well." The music industry is under close scrutiny from U.S. antitrust enforcers. Viacom's MTV Networks music video unit said yesterday that the Justice Department is investigating its licensing agreements with music companies. The Justice Department wants to know if MTV pressures major record labels to give it exclusive rights to air videos upon release. Copyright 1999, Bloomberg L.P. All Rights Reserved.