Here’s your starter for ten in our weekend slot where we throw up an idea or thought for debate…
Sony caught a lot flack this week for initially raising the price on Whitney Houston’s songs after her death (a rise since recanted). Was Sony initially right and the pricing of products like music should be left to market forces? Or was Sony’s second view right and is there also a moral angle? If so, which prices does it cover and when?
Post your comments below…
* Mark Pack is Party President and is the editor of Liberal Democrat Newswire.
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23 Comments
I think you get into pretty dodgy territory when the state is controlling the price of music. Market forces worked perfectly here. Sony raised the prices and was forced to back down due to consumer pressure.
Priced by mortality, post-Whitney, surely?
Dan assumes anyone saying Sony is wrong to put up the price of Whitney Houston songs must be calling for the state to control the price of music.
Can’t they just be saying that Sony is behaving badly?
Let’s turn this question on its head, shall we?
Whatever made Sony think that its price hike was morally acceptable in the first place? More generally, why is there a widespread assumption in the world of business that business exists in a moral bubble, and is not subject to the same morality we expect in all other walks of life?
Remember that infamous expression in ‘The Godfather’? “It’s not personal, it’s business.” That’s the attitude I’m talking about. And it’s a similar immorality in finance and banking that caused the present financial crisis.
So, as Jonathan Calder correctly points out, this isn’t a question of state regulation. It’s a question of doing the right thing. Incanting the magic words ‘business’ or ‘market forces’ does not absolve anyone of morally bad behaviour. Business should be subject to exactly the same moral rules as the rest of society – no more, no less.
Interesting question. Some observations and questions:
More people are more interested in buying her music after she died. The optimal price point – the one which delivers optimal profits – is higher today than it was a few weeks ago. Sony is in no sense responsible for this: the fans are the ones whose behaviour has changed now that she’s dead.
People who would like to buy the music today but did not do so a few weeks ago will feel unhappy if the price has risen, because it feels like they have lost out. It is emotionally hard for them to blame the amorphous mass of fans; Sony is an easy target.
A few weeks ago, the music was priced at a nominally optimal market point. Today, it is discounted from the price a few days ago. Is it right that fans should be given a discount by publishers after an artist dies? Is it acceptable for a publisher to use discounts as a way to capitalise on the media interest around her death and hence make more money?
Two interpretations:
1. Sony’s actions are based on morality. They made a bad call, and consumer pressure forced them to change their minds
2. Sony’s actions are based on profit. Sony increased the price to the optimal point for sales. Media interest in this price increase changed the environment. Sony then decreased the price to the optimal point for sales. Profits at this final price are higher than profits at the earlier price, yet both are higher than profits at the original price before it was changed: the media reaction to the price increase has changed the shape of the market.
Why is a profit-seeking price decrease morally superior to a profit-seeking price increase?
Why is profit-seeking behaviour after somebody dies morally inferior to profit-seeking behaviour at other times?
I do not pretend to have answers to any of these questions. I just think that the topic of the debate is rather more complicated than “Sony was bad, should it be allowed?”, and it’s a really hard problem to figure out what it means to price something by morality.
@Andrew Suffield – It seems from your dessicated analysis that you know the price of everything and the value of nothing.
Your lack of analysis suggests that you know only what you hate, and have no proposals for how things should be done in a way that won’t be hated.
You can’t just ignore the underlying question about what “moral pricing” could mean, when complaining that people aren’t doing it. You need to come up with something they could actually do. I have, I think, sketched out why this is a very difficult problem.
The job of the managers of Sony is to maximise the profit of their shareholders while complying with the law.
No-one was forced to buy her music they could have brought something else. Under this scenario everyone gains. People purchasing her music are willing to do so at a higher price and will buy up to the price where they would rather keep the money than but the music. Sony gains (and depending on the details of her contract) her family gains.
Win win, all round.
That’s free markets for you.
@Andrew Suffield – “Hate”? An absurd overreaction, if I may say so. I made my original criticism because I disagree with economism, which assumes that all social questions can be reduced to economic dimensions.
My original point was that the question of Sony’s behaviour is essentially about what constitutes morally acceptable behaviour in society, and cannot be reduced to a matter of economic calculation.
That isn’t a “lack of analysis” but rather about getting to the heart of what matters in society.
@Simon McGrath – See my first intervention in this debate – you clearly believe that business does exist in a moral bubble!
You say: “The job of the managers of Sony is to maximise the profit of their shareholders while complying with the law.”
Wrong. The fact that one is a manager of Sony does not absolve them of the requirement to behave morally, the same requirement that all of us face in every walk of life. Managers of Sony are also members of society, just like everyone else. It is the ideological belief that managers’ only responsibility is to their shareholders that has destroyed public trust and led our economy into the present mess.
Again, it seems you can see the price of everything and the value of nothing.
Dan assumed that to say something was wrong is to call for it be banned by law. Now Simon McGrath tells us that if something is not banned by law then it must be morally right.
Both these views seem wrong to me and their faults arise from the modern tendency to express moral judgements solely in terms of individual rights. This is what I was trying to get at in my post Eight sceptical theses on moral rights (hem. hem).
Andrew Suffield thinks that because economic theory cannot account for our moral judgements, then those judgements are problematic. Well, you may find them problematic for any number of reasons, but this is not one of them.
All Andrew has shown is the limitations of economic theory. In fact, whoever thought that economic theory couldaccount for our moral judgements?
If we’re going to turn it around to value, isn’t the choice to regard Whitney Houston’s music as having lost value, therefore selling it at a at a lower price at the time of her death than it was when originally released, just as right/wrong? If we’re talking about value as being constant, or in some way objective (which I find personally ridiculous), then surely that’s the case.
Account for your moral judgements.
Go on.
If your only argument is “I am right and everybody else must do what I say” then you are everything I signed up to fight. You have both failed to advance any argument more subtle than attempting to enforce your own ideas on others.
(Hint: dismissing everything other than doing what you say as “economic theory” is not accounting for your judgements)
Andrew: I thought we were having a philosophical discussion. You seem to want a playground fight.
Meh. Sony shows why its business model is outmoded. Digital recordings of all music can and should be free. These are advertising for the live performaces of the artist.
Who pays for products with unlimited supply nowadays anyway? It just goes to support the overblown and parasitic activities of a certain branch of the marketing ‘industry’ – who are ultimately responsible for killing the ability of this goose to lay any more golden eggs and which contributed to her untimely demise.
You can’t put a price on morality. It’s not something which can be bought, even if many people are easily lured into a faustian pact to sell theirs. The devil doesn’t do redemption, that’s how he got all the best tunes.
I should have read Mike’s piece more carefully because he clearly doesn’t call for state intervention. Anyway my point still stands that it was market forces that made Sony lower the price again.
@ Oranjepan
I’m no fan of the large record companies inability to update their business plan but at the same time you can’t suddenly cut out a large slice of their income and expect everything to remain the same. The reduction in income from recorded music is resulting in an increase in the number of 360 deals being signed. In the end free recorded music means you’ll have to pay £150 for a ticket to see a concert because everyone in the chain still needs paying but from a much smaller number of customers. Also what about those who can’t tour?
Nope, recorded must must be paid for.
@Oranjepan
“Digital recordings of all music can and should be free. These are advertising for the live performaces of the artist.
Who pays for products with unlimited supply nowadays anyway?”
Gosh, this is confused. “advertising for the live performances of the artist” — er, this is Whitney Houston we’re talking about. Small problem there?
And if nobody pays for recorded music nowadays (manifestly untrue, but accepting it as a premise) then what the blue bruises does it matter what Sony charges for it?
Fundamentally, I’m baffled that anyone thinks there’s a huge moral issue involved in what price companies charge for music recordings. You want it, pay for it. You don’t want it that much, don’t pay for it. Is there a constitution anywhere that proclaims the right to buy pop music at a price determined by popular vote?
Malcolm,
Whitney Houston is an interesting case, as she achieved fame during the age of CDs but has remained popular and in demand since, so she exemplifies the transition which occurred in the business. She largely stopped performing because her amazing voice became a casualty after she hooked up with her on-off husband.
If we are not saying Sony should be stopped from selling music at a higher price, then what are we saying? The only tool the government has is force (tax and spend also being forced donation) – this is why we believe in reigning government in. If it is just meant to be a social observation without policy then we shouldn’t make it with our political hats on, and this is a party-related site, even if not aimed directly at the public.
Politicians making social observation without policy are either saying
1) I don’t intend to do anything about this but I would still like votes from people who want something done, or
2) I intend to do something about this but for now you’ll just have to guess what it’s going to be.
From the point of view of social observation, I would want to know what the reason for the original lower price was in their pricing model. If they were clearing stock, then the reason for the original price no longer pertains once she has died. Why fans prefer to buy records not from artists but from their heirs is something I find difficult to understand, but that’s how it is.
Let them get on with it, say I. No one is going to starve or get ill because they can’t listen to Whitney Houston. They can listen to it free, over and over again on Spotify, and many radio stations have been playing little else.
Dan is abslutely right – state intervention on the price of music is a bit too much! Bad Bad Sony!
A more pertinent debate might be the role of music in changing society. Segregation was in force in the US when I was growing up. Whitney’s music, and her talent, helped change that society, I believe, and spoke of that change, and will continue to do so. The beautiful funeral was an educational as well as very sad and emotional experience.
Sony’s actons are an irritation, yes, and symptomatic, but pretty minor in comparison.
Can you seriously not conceive that we are reaching a moral/ethical judgment that Sony’s behaviour is wrong and that we, as individual people, don’t like it, and believe they shouldn’t do it?
There are plenty of things I think are wrong, but don’t want to ban. Indeed, that’s rather the point of being a Liberal.