A Little Hypocrisy?

If I owned 3 CDs he might have a point. But if I were to repurchase my CD and LP collection, and it is modest by standards here, it would be much greater than my aggregate hardware cost. I believe this is true of the overwhelming majority of us.

I agree with inscrutable. The $$ value of my CD collection has rapidly grown to exceed the price of my most expensive component, and I am not done yet.

Hi Prpixel...I'm not so sure that your figures are accurate. Which CDs, which labels, and what type of distributors are you talking about?? I don't think distributors sell their CDs to stores for $5 or $6 per.

I would bet the distributor pays more than that (depending on which distributor you're talking about...the national, or local??). A local "one-stop" distributor is paying around $10 (give or take a couple dollars, depending on the CD, label, etc). I had a friend that owned a small independent record store back when Best Buy was buying themselves a market. She purchased her discs from the local "one-stop" (as most small stores do). A new Prince album was out at the time. Best Buy was selling it for $9.99 at the time and her COST was $12.99. Best Buy's cost was definitely less than $12.99, but not necessarily as low as $9.99. Big companies can sell certain titles at or below cost, using them as "loss leaders" to get customers into the store. Those customers will buy the sale CDs and (hopefully) buy some others too (they care about volume). That's why Best Buy was stocking everything, selling sale CDs for $9.99, and all regular CDs for $11.99 or $12.99 ten years ago. Their selection shrunk and their prices rose up to $15-$17 as soon as they had 10% of the CD market. Circuit City did the same thing.

And many of the above postings are correct. CDs are much cheaper to produce than LPs were when they were the main format, yet they sold for twice the price(and more). It's not the price that bothers me...it's the fact that the price isn't justified. I wouldn't mind the high price of CDs if I knew the artist was making a good chunk of the money, but in most cases they're getting screwed...at least those on major labels. Most major label artists (the non-superstars) don't ever turn a profit. The label may give them huge upfront advances and recording budgets, but those are loans...they owe that money to the labels (along with the money the label spends to market them). The labels will keep the artists' royalties until those debts are paid. That day never comes for most non-superstar artists. Roger McGuinn said that he made more money selling his Folk Den CDs on MP3.com for $8 each (with him getting 50%) than he ever made from his years with The Byrds and Columbia Records. I think that's unbelievable, considering the lasting poularity of some of their songs and the fact that their back catalog is still a consistent seller.

The main reasons that CD's are expensive is greed, pirating and money losing acts. The record companies are trying to make up for the money they lost on vinyl while they pay their execs millions even if the company loses money. Then, they blame the high costs of CD's on pirating. This may be partially true but it is also true that people would buy more music if the record companies would lower their prices. Also, most of the new artists are crap and it costs loads of cash to produce and market them just the same. MTV now decides what the younger generation listens to.

Another thing I love about the music industry is how flexible they are (tongue firmly in cheek!). I work in an industry where demand is down, the market is somewhat saturated, customers are under cost pressures and competitors help to force pricing down. It's tough as hell, but we actually try to adapt - come up with better value propositions, lower cost of delivery , lower cost of ownership, etc. etc.

The music industry watches their sales go down and just whines and threatens. Guess what guys - you might not be able to get $17 a CD any more! You'd probably sell more if they cost $12 a pop or (gasp) $9.99. I don't know why it costs $17 retail to get CDs into the marketplace, but you're not immune to the same oversupply, added value proposition expectations, reduced costs pressures that basically every other industry is going through.

Needless to say, I don't have a lot of sympathy for their plight.