New York Attorney General Eliot Spitzer has begun investigating digital-music pricing as record companies turn to the Web to make up for...
New York Attorney General Eliot Spitzer has begun investigating digital-music pricing as record companies turn to the Web to make up for declining sales of compact discs.
A “preliminary inquiry is under way,” spokesman Darren Dopp said Tuesday. He wouldn’t say whether Spitzer’s office sent subpoenas to music companies, but Warner Music Group, the fourth-largest record company, said last week it received a subpoena in the probe Dec. 20.
Worldwide digital-music sales more than tripled to $790 million in the first half of the year and now amount to 6 percent of total recorded-music sales, according to figures by the International Federation of the Phonographic Industry, based in London. So-called physical music sales, mostly CDs, fell 6.3 percent to $12.4 billion.
Warner Music said Spitzer’s subpoena was part of an industrywide antitrust investigation into digital-music prices. Warner Music is cooperating with the inquiry, it said in a filing with the Securities and Exchange Commission.
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The Wall Street Journal reported Saturday that Spitzer also subpoenaed the two biggest music companies, Universal Music Group and Sony BMG Music. The newspaper cited the companies.
Sony and Bertelsmann jointly own Sony BMG. Sony BMG spokesman John McKay wasn’t in the company’s New York office and Sony spokeswoman Ann Morfogen didn’t immediately return a call seeking comment.
Vivendi spokeswoman Flavie Lemarchand-Wood wasn’t in the company’s New York office, and Liza Saunders, another spokeswoman, didn’t return a call seeking comment. A spokeswoman for EMI Group, the world’s third-largest music company, didn’t return a phone call seeking comment.
Legal music downloads tripled to 180 million in the first half of the year as illegal file-sharing was kept “in check” with a 3 percent rise in available files, the International Federation of the Phonographic Industry said in July.
Tracks downloaded legally rose from 57 million in the first half of last year, the federation said. Warner Music narrowed its loss last quarter after music downloads grew to 6 percent of revenue. Apple Computer’s iTunes online music store became the seventh-largest music retailer this year.
Bloomberg News reporters Otis Bilodeau and J. Kyle Foster contributed to this report.