Warner Music has been subpoenaed by New York Attorney General, Eliot Spitzer, in connection with a probe into pricing...
Warner Music has been subpoenaed by New York Attorney General - Eliot Spitzer, in connection with an industry-wide investigation into the pricing of digital music downloads.
A spokes-person for Warner Music said that the company has received a subpoena from the Attorney General's office, and that Warner Music is "co-operating fully" with the investigation.
The office of the New York Attorney General was not available for comment, on the nature and scope of the investigation.
For some time now, the US music industry has been under fire for looking at increasing the cost of digital music downloads.
Industry sources say that the ongoing probe centres around whether the "Big Four," comprising Warner Music, Sony BMG, EMI Group and Universal Music will collude to set a whole-sale pricing for digital music downloads.
There is also a feeling that the investigation could be related to the music studios' licensing re-negotiations with Apple Computer, for its popular iTunes music store.
While on Apple's iTunes service US consumers pay a uniform amount of 99 cents per track, record labels have indicated that they want to institute "variable pricing" at the iTunes music store.
Edgar Bronfman, CEO, Warner Music, had said in September that not all songs are created equal, and that there are some songs for which consumers would be willing to pay more, and some songs that Warner would be willing to sell for less.
Steve Jobs, CEO, Apple Computer, countered, calling the music industry "greedy" for considering a hike in digital download prices. Jobs warned, that such a move could drive Apple iPod users towards piracy.
Interestingly, Warner Music last month agreed to pay $5 million to settle a separate New York state "pay-for-play" probe into how the music industry influences which songs are played on radio. While Sony BMG paid $10 million in connection with the same investigation, Universal and EMI have reportedly not yet settled scores.