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CNN Live At Daybreak
Federal Judge Rules Music Clubs Must Give Discounts
Aired December 05, 2003 - 06:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time now, though, for a little 'Business Buzz.' Do you belong to a music club? You may be getting a refund.
Carrie Lee has more on this story live from the Nasdaq market site.
Why?
CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Well, Carol, basically price fixing. That's what some of these music clubs have been accused of. And now a federal judge has approved a settlement that gives discount vouchers to over eight million people who have accused various music clubs of conspiring to fix CD prices. The settlement calls for immediate mailing of vouchers providing for 75 percent discounts on regular CD club prices.
The lawsuit was filed a couple of years ago against names like Bertelsmann.BMG music club (ph), Columbia House, a couple of others. So now members are going to receive up to three discount vouchers. And with those vouchers, people will pay just about $4.50 per CD rather than the typical music club price of about 18 bucks. They can also forego shipping and handling, which eats into these prices as well. They can be quite expensive.
So a lot of people, over eight million, will be expecting to receive these vouchers in the mail, very soon, right in time for the holidays.
COSTELLO: Wow! People were paying 18 bucks for a CD while belonging to a -- to a music club?
LEE: It sounds very high. You know the idea here is to get a discount, but that's what some of these music clubs were charging. So quite a profit margin there. Yes.
COSTELLO: Jeez, surf the Web, you can get them much cheaper. I can tell you that for a fact.
Quick look at the futures before you go.
LEE: Yes, looks like we could see some selling at the open. One of the reasons, Intel last night after the bell giving the mid-quarter update for the company, saying for this quarter that the chip company expects to take a charge of about $600 million. This because of weaker-than-expected growth in its wireless business. Intel also says this is going to eat into profits. So do expect some selling, at least that's what it's looking like right now, Carol, at the 9:30 opening bell.
COSTELLO: Carrie Lee live from the Nasdaq market site.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired December 5, 2003 - 06:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time now, though, for a little 'Business Buzz.' Do you belong to a music club? You may be getting a refund.
Carrie Lee has more on this story live from the Nasdaq market site.
Why?
CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Well, Carol, basically price fixing. That's what some of these music clubs have been accused of. And now a federal judge has approved a settlement that gives discount vouchers to over eight million people who have accused various music clubs of conspiring to fix CD prices. The settlement calls for immediate mailing of vouchers providing for 75 percent discounts on regular CD club prices.
The lawsuit was filed a couple of years ago against names like Bertelsmann.BMG music club (ph), Columbia House, a couple of others. So now members are going to receive up to three discount vouchers. And with those vouchers, people will pay just about $4.50 per CD rather than the typical music club price of about 18 bucks. They can also forego shipping and handling, which eats into these prices as well. They can be quite expensive.
So a lot of people, over eight million, will be expecting to receive these vouchers in the mail, very soon, right in time for the holidays.
COSTELLO: Wow! People were paying 18 bucks for a CD while belonging to a -- to a music club?
LEE: It sounds very high. You know the idea here is to get a discount, but that's what some of these music clubs were charging. So quite a profit margin there. Yes.
COSTELLO: Jeez, surf the Web, you can get them much cheaper. I can tell you that for a fact.
Quick look at the futures before you go.
LEE: Yes, looks like we could see some selling at the open. One of the reasons, Intel last night after the bell giving the mid-quarter update for the company, saying for this quarter that the chip company expects to take a charge of about $600 million. This because of weaker-than-expected growth in its wireless business. Intel also says this is going to eat into profits. So do expect some selling, at least that's what it's looking like right now, Carol, at the 9:30 opening bell.
COSTELLO: Carrie Lee live from the Nasdaq market site.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
