GristyMcFisty used our news submit to tell us Musicnet which
is a music download service that sells music throughout theUS and Canada ran into problems with enforcing region restrictions on where customers can purchase its music. While the company has no problems operating in America, the different music rights throughout Europe makes it a different story for them to expand into Europe. Just as CD sales restrictions and pricing
vary between different continents, the same goes for selling music over the
Internet.
The company works out the consumer's location by their credit card type and number. This work out well with the exception of American Express credit cards. If a European consumer has an Amex credit card, they can apparently download all sorts of music not allowed to be sold in their region. While this may cost the music companies and artistsa fair bit, VAT authorities across European countries may also have an interest in this issue also.
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The firm already makes software and collaborates with US and Canadian companies - its biggest customer is AOL. Effectively, the company offers catalogues of music '“ the distributors collect the money by using its software, which you can see demonstrated on its web site. While it's been doing so successfully in North America for quite some time, music rights problems are affecting its ability to expand in Europe, it appears. That's because there's different music rights to negotiate in the different European countries. This led another attendee at the corporate presentation to volunteer the information that while online music sites can track the different geographies by the type and number of credit card that's being used, apparently there's a loophole if you have an American Express card. Using an Amex credit card, you can, apparently, download all sorts of stuff in Europe that you oughtn't to be allowed to. If that's true, this is a loophole that could be costing online music companies a fair bit, and the artists perhaps a fair bit more. We'll try find out more about this apparent loophole later in the week. It's just what an attendee said at the conference - but if it is true, the VAT authorities in the various European countries no doubt would take an interest. |
While Musicnet seems to take this matter seriously, other online web-stores actually take advantage of purchasing music from cheaper regions of the globe to sell the music more competitively. A good example is the CD-WOW service that operates in Ireland and the UK. They import their CDs from Hong Kong and sell them far cheaper than the high street price in the UK and Ireland. BMG was not at all
happy with this and even tried taking action against CD-WOW as a result. It is a
real pity that the music labels try their best to fight off competition and keep their prices high
regardless of whether the music is distributed online or on optical discs.
Source: The Inquirer
