Jari Ketola
21 Jan 2004 14:37
Online retailer CD Wow has settled with the British Phonographic Institute (BPI) to stop importing cheap Audio CDs from Asia. The company was able to offer cheaper CDs to its customers thanks to price differences between different regions -- CDs cost significantly less in Asia than in Western Europe.
Until now CD Wow has charged £8.99 for CDs, but the prices will be increased by £2. There's little doubt that this will hurt the company's sales quite severely.
In essence music labels are enforcing a policy similar to DVD region coding -- Europeans are willing to pay more for CDs than Asian consumers, so they are charged more. By using restrictive distribution contracts, record labels have managed to keep cheap imports from appearing in stores.
Source: The Register