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UNCLE SAM TAKES CD PRICES FOR A SPIN

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Pity the poor record companies. First they must endure consumers’eating into their profits by buying used CDs. Now the industry’s sixmajors (Sony, MCA, BMG, Warner, PolyGram, and EMI), which control 95percent of distribution, are being investigated by the Federal TradeCommission on charges of price fixing.Hey, the music biz is only looking for a profit. And isn’t turningout a high- demand product-a Mariah Carey CD, for example-at $1, thenselling it for up to $19, simply a marketing fundamental? ”The recordbusiness is similar to sports,” says an employee of one of thelabels. ”The price of signing big acts has gone through theroof-you’ve got to recoup that loss.” Says Scott Young, CEO ofWherehouse Entertainment, ”If anyone’s absorbing (those costs), it’sthe artists and the consumers.”The FTC won’t comment, but if it uncovers gouging, it could bringregulation to an industry that has little. Young thinks the labelsshould bite the bullet. ”If they lowered CD prices, they’d dobetter,” he says. At the very least, he notes, ”used CDs would beless of a problem.”