A Little Hypocrisy?

How would you respond to the record company exec who say -

"I look on the Audiogon web site and I see people buying and selling $5,000 cd players, $10,000 speakers, even cables and wires for several hundred dollars per linear foot. Nobody complains about those kind of prices. Yet you complain about cd's costing fifteen to twenty bucks. What gives?"

I include myself in for this criticism, but I'd be fascinated to hear how anyone else would respond to this.

Actually manufacturing a CD costs pennies. Lets say 20 cents for arguments sake. If you buy the CD for $20.00 that is 100 times the price of what the disk actually costs to make. A good rule of thumb in high end audio is that the 'ACTUAL cost of the parts to make a component is around 10% of the retail price'. Maybe a little less or more depending on manufacturer. This does NOT INCLUDE the labor that goes into making the product.

Basically audio products are marked up 10 times parts costs
CDs are marked up 100 times parts costs

Now there are also OTHER costs involved in making a CD, you have to pay the artist their cut (which is less than $1 per CD sold under most contracts, for a singer to get more than $1 they have to be REALLY big, like say Madonna or U2, many artists get around 30 to 50 CENTS a CD sold.) You have to pay Sony/Phillips a cut ($1 or so) because they have the patent on the CD. And finally the record company has to pay the production and promotion/distribution costs involved in the production of a CD. I do not know what this figure is, but it sure as heck CANNOT be $17 per CD. I could believe $5 or maybe $10, but $17 sounds like price gougeing.

Audio manufacturers have Labor and R&D/production overhead they have to factor into the selling of any product. These percentages vary from company to company.

HOWEVER, when you break it all down, a record production company is marking CDs up way higher than Audio manufacturers are. The sad thing is that CD prices have risen through the years. When CDs first came on the scene they were $15 or so per disc. Now most are at least $15 if not $20. Through the past 20 years it has become ALOT cheaper to make CDs. Heck many people can now make their own CDs at home with their coomputers.

Annyway, I must get back to work.

I don't think the people who have been bitching and moaning about CD prices are the same group of folks who spend $10K on speakers and $5K on CD players.
If you spend $50k on a car, should you then not be upset if the price of gas goes up by a nickel? The difference, I think, is that with gas, cd's etc, are items which have to be purchased in order for your toys to work. Therefore you feel that you're being taken advantange of if the prices are (or seem) inflated. A very justifiable complaint. If you can afford $50k cars or speakers or amps etc, and you feel it's worth the money - you are paying for quality, performance, durability whatever. But when you're forced to pay inflated prices, it just doesn't sit well.
I would be the last to defend the price of CD's, not that I buy all that many anymore. But, Tok20000, and with all due respect, when you say "HOWEVER, when you break it all down, a record production company is marking CDs up way higher than Audio manufacturers are.", I have to ask you if this opinion would hold if you consider the realm of cables and interconnects. Talk about mark-up. Even the dealers I know think it's ludicrous. There is gouging aplenty in all areas of audio (and elsewhere, for that matter).