A small note on Travis' point 1)
*Marketers (talent "spotters", new product/biz development) in the music industry do (did?) very well vs. other industries. Artists USUALLY get proceeds on a fixed scale -- unless they're on their way up and that "fixed" scale falters...:)
*A significant part of the asking price of a cd (ex sales tax, of course) goes to retailers -- i.e. the people who take care of the logistics involved in bringing the s/ware to us, the end users.
*Large retail chains also play on returns & payment terms for the s/ware they buy. Also, they may physically return cd's that do not sell. This raises the issue of financial mgt for production companies (I'm not saying they don't do it well).
*Some music industry execs bemoan (to me) the fact that times have changed irreversibly: before, all they had to was produce an LP, then cd, and it would sell (via radio support & other ad means). NOW they actually have to find ways of convincing us TO BUY the d*mn stuff -- something they were NOT used to having to do...
*Piracy, as in copying, exists it seems and eats into the industry's T-Over. OTOH, whatever is locked can be unlocked... coming back to mgt & creative mgt at that: locking doesn't seem to address the issue adequately. BUT sound quality could...
*At the end of the day, what we're debating here IMO is not whether we should PAY for s/ware & how much. It's the perceived ADDED VALUE ADD of what we get for the asking price that has us wondering, isn't it? I.e. "what am I really paying for, and is it justified? Cheers |
Guys, Postage is now 37 cents a stamp.
Frankly I think postage is a rip off due to the fact we have email now. Most stuff can be done electronically. And this is why the post office is raising rates. More and more people are using email.
Always remember that Baseball players were almost effectively slaves to the owners up until about 30 or so years ago when they were granted 'Collectively Bargaining'. Little by little the Owners have tried to whittle away at their collectively bargaining agreement. Anyway, one must always remember... If the players do not make the money, the OWNERS will. Do you think an Owner deserves to make hundreds of millions a year or many players make millions a year? It is easy to say ticket prices shall be cut and sallaries decreased/rolled back... BUT this is not how our 'Free Market' economy works. Short of the fans stop going to see the baseball games, ticket prices will not drop and neither will players salaries. So we can blame us fans for inflated players salaries.
Now about CDs... In some instances, the CDs could be compared to the baseball players and we are the fans. Until we quit buying them and record companies start loosing money hand over fist, record companies are probably not going to reform the way they market/distribute/sell CDs. Personally, I would like everyone to boycott the digital medium altogether. But that is a nieve wish.
I tend to buy CD's from Boarders Books because I know the low profit margins that are in new book dealing. New book stores tend to loose money every month except for November and december.
This and 37 cents will get you a 1st class stamp.
KF |
Hey T Bone...you made some great points and I agree with most of them.
1) I do think the industry is making a lot of money (by gouging the consumer), but they're wasting it...it's not coming in as profits. I think they're managed poorly and could easily turn much higher profits (and still charge less for music) if they knew what they were doing. They're blaming their lack of management skills on piracy, which is ridiculous. And yes...I'm sure music industry employees are paid too little and taken advantage of on a daily basis, just like most corporate employees. Isn't that what this country is all about? :-)
As far as CD costs and artists royalties go...I think most major labels are incredibly out of touch with all of the fringe markets that have been developing over the last decade or so (some of them quite large and desireable to advertisers). Most of the music I buy is sold direct by the artist themselves or by independent labels (where it is not uncommon to have a 50/50 label/artist split AND the artist usually owns their recordings, which is not usually the case with major labels). Many of the msucians I like were once on major labels, but eventually dropped because the labels had no idea how to market them (or chose not to spend the money to market them). Richard Thompson and Aimee Mann are two prime examples. People like Ani Difranco have proved that major labels are no longer necessary.
2) I buy most CDs that I'm interested in (usually for much less than the $17 the industry would prefer). Lower pricing would let me buy more than I currently am, but I think it would increase sales for the mass market by quite a bit. I realize most people on this site have spent thousands on equipment (myself included) and $17 for a CD isn't considered to be a lot, but to the majority of the country's population, $17 (per CD) is quite a bit of money to spend on leisure activities. Lowering the price to $10 or $11 would certainly make CDs more affordable to millions of potential buyers (including the students that are doing most of the downloading), and charging a small fee to download individual songs would also be a very smart move.
3) Yeah...$.34 is a deal for first class postage, but I'd gladly pay more if it meant that it wouldn't be destroyed or misdelivered by my local carrier (I won't even mention how frightening it is to visit my local post office). Same issue...how wisely and efficently is that $.34 being spent by the USPS??
4) Wouldn't it be more accurate to say, "Are 50 baseball players worth $1.85 billion in salary while the other 800 split the remaining $.15 billion?"? :-)
And no, the coffee itself isn't worth $3. You're paying for the luxury of having a well-trained, college graduate froth your milk for you. After all, he has a family to support and he might buy more CDs if they weren't so expensive). |
Interesting points T_bone. My answers:
1. No idea and no real interest in figuring it out. There will be music and I will listen to music. How it gets created / distributed is really not much of an issue for me as this is my past-time, not my livelihood. If it were my livelihood, I'd be very interested, and I'd do something to make sure it was very profitable and that I could employ a quality workforce.
2. The idea conveyed is an interesting question, but I think the ratios are wrong. Some of us might buy twice as much, but the real question is "would lower prices raise demand," which I find hard to argue any answer but "Yes, they would." Could the music industry change a 5% annual decline into a 5% annual growth in sales by merely lowering prices? I'll just say that a significant price decrease (and 50% would be a gigantic price decrease - I'm talking 20%), would be a key step in a plan to turn music sales around.
3. No, I agree that postage is one of the best bargains going.
4. A very interesting question, because it's another entertainment industry that doesn't have a clue, wants to blame everybody but themselves, etc. Over my life, I have been a huge BB fan, but I've all but given the game up. I haven't bought a ticket in years, because the sport is so screwed up. You call off your mid-season classic before it's over (and send everybody off to kiss their sister), you've created the most unequal "playing field" in sports with well over 1/2 the teams being "out of it" before the first pitch of the season, four hour games, and you're talking about folding teams. All the while, the people at the top (players and management) are grabbing every $ they can get their hands on regardless of the long-term health of the game / industry. All they need to do now is to figure out a copy-protection scheme for the morning boxscores and charge to view them, and tell me that I'm illegal if I let somebody else steal a glance at my copy and they'll have caught up. Actually, they're ahead of the music industry with me, as I've already written them off (though I am, for the first time in a decade, actually watching what is destined to be one of the lowest rated WS in history, as they accidently got a really interesting one) |
Playing devil's advocate as I am wont to do on occasion...
Looking at the economics of the situation (letting work spill over into the hobby), it appears the general gist of responses above concludes that the manufacturing cost of CDs is quite low and artists don't get much of the price of the CD. If it's not the artist or the CD stamper/manufacturer, that suggests all who think the price of CDs is outrageous thinks either the workers or owners involved in the business of music distribution are gouging consumers. I say, look at the result.
I, for one, would wish that those employed in the business get paid so they could support families and loved ones, provide for children's education, their own retirement, and if there is justice in this world, also provide them with the means to pursue their hobbies like we pursue ours. At the same time, I had not been under the impression that employees of the music distribution industry are disproportionately highly paid in comparison with other people. The ownership of the business is either private owners or publicly-owned companies (the vast majority of sales), meaning those who own stock in those companies through their investments, pension plans and retirement plans, etc. The businesses of manufacturing the software, promoting it, physically distributing it, or selling it by retail/internet are all businesses with low barrier to entry. I am also not convinced that shareholders of Sony, Philips, CircuitCity, and Borders are necessarily happy campers over the past five years either (Sony & Circuit City basically zero return, Philips -15%, Borders -25%). Amazon, BestBuy, and Walmart are up quite a bit, some of that may be from business other than CDs.
Personally, I believe music distribution is just like any other business. There is a demand curve, a supply curve (combination of cost of doing business, and profit (capital providers either deserve it or not but that is more of a political/philosophical question)), and the price point per product unit is the sweet spot where the two meet.
Some questions for those of who feel music software prices are too high...
1) What is the appropriate total value of the compensation and profit of the entire music software business?
2) If prices were to drop in half, would you buy twice as much music? [think about the consequences]
3) Are postage stamps overpriced because they cost 100x the "cost" of production? Are postal workers overpaid?
4) Are 850 baseball players worth $2bn in salary a year?
My answers to the questions above are 1) I hadn't thought about it until now and have no good idea even now, 2) probably yes but perhaps not (I only have a certain amount of time to listen to music), 3) No, 1st class airmail postage is one of the bargains in this world, 4) Probably, because that was the total salary of 854 major leaguers as of the start of the 2001 season.
That and $3 will get you a $3 coffee. But think about a $3 coffee... is it really worth $3? What's the cost of the beans and the ... OK Travis, get a life... |
Bomarc - my point, at least, is that the music industry is the one complaining about the injustices of the marketplace instead of adapting. I have adapted equally on both the purchases of high-end audio gear and audio software - I would say that my system cost me, overall, about 60% of list price. My software has cost me, overall, about 60% of list price.
My complaint is one of buying 200-250 CDs a year legally, not downloading or copying other peoples' CDs at all, and then watching this industry lump me in with their problems. They can't ween themselves from the cash cows they've created but they're mad that the cash cows aren't as lucrative as they used to be. I am representative of their market, as many others on this board are. They're not doing a damn thing to better serve me and, worse, are working hard to lessen the value proposition.
Yes, we can all stop buying. I will return any CD that has copy protection on it.
The original premise of the thread was that we shouldn't complain about the price of CDs if we're not complaining about the price of high-end gear. If people weren't complaining about the price of high-end gear, they wouldn't be coming to Audiogon to shop used from relative strangers for the purposes of saving money. I think we, as a community, feel the price of both are out of whack, at least to an extent. |
Two wrongs don't make a right!
It's true, the high end is rife with overpriced components. The price of cable in particular is ludicrous.
However, I recently started a thread about why the price of a CD is higher than $9.99. I used to buy a lot of CDs at this price in the late 1980's. The mantra was that the cost would go DOWN as people increasingly turned to the format, production ramped up, and costs to make a CD dropped. Well, guess what? The world has adopted CD, production is as high as it was ever dreamed of being, and costs have gone from dollars per CD to cents per CD. Yet, prices have RISEN.
Based on that, I say don't waste your time chasing 14 year olds who are ripping CDs for pennies on dad's computer which came with a CD - R drive. And, don't think that going after websites like Napster will result in anything more than you swatting flies. And, don't put your hopes into SACD and DVD - A as being your cocoon, DVD writers are already becoming popular, and you know that we'll be able to burn SACDs sooner than you think.
If Sony wants SACD to take off, start punching single format(yeah, no hybrids) discs out for acts like Limp Biskit, Nelly, N'Sync, Wu Tang Clan, and Biohazard at $9.99. Pull the plug on CD altogether. When Generation Y discovers they need to go buy a new $99 Sony SACD player to listen to the disc, Best Buy and Circuit City won't be able to keep their shelves stocked, and you won't be able to produce enough players. Then, in a year or so, the players will start showing up in Mazdas.
I would say "Screw You!" to record company executives like this, but I don't have to. Their fate is already cast. |
Very simple: hardware, the more money spent, the better the sound. Software: heuh, geez, I just spent all my money on the hardware, euh, darn, I guess I'll take out my old vinyl... |
Well, alluding to the above argument about piracy, perhaps the market will not bear what retailers charge for CDs. And I believe the industry just got nailed with price fixing fines, although I don't think they admitted "any wrong doing". So what the "market will bear" has little relevance where organized anti-competitive practices are in effect.
Secondly, most non-Audiogon folks buy only one or two audio systems and keep them for few to many years. On the other hand, most people purchase hundreds of CDs and treat them as the ephemera they usually are. It's typical for the total expenditure on software to exceed that for hardware, except at the very high end of audio.
Also, now that I have answered seriously, this thread is a troll. People complain about the reportedly very high list price to driver cost of Wilson products regularly, for example. Note also the recent BMW priced phono stage (this is not metaphorical) reviewed in S'phile (unwilling to dig the issue out of my reading stack to get the facts). The reviewer liked the component, but acknowledged in so many words that the price is problematic. |
I agree with all of you who feel the price of cds are to high. As a matter of fact I vent this point ever few months on two of the jazz message boards I frequent and get a lot of support. One of the recommendations I made was to boycott retail stores for a month or two, to buy only used cds or online.
I also agree that if the cds were of better quality then I wouldn't mind paying extra but let's be honest we are a very small minority of buyers in that market. The vast majority of cd purchasers are happy with the current quality of cds because they feel MP3s sound great.
An article recently stated that a large radio corporation is stopping its practice of accepting payola for playing artists cd tracks. If this catches on and other stations join in, then the major labels will have extra cash on the books and lower the price of cds. Alright, stop laughing. I didn't believe they would be that nobel and moral either.
So, what can we do to get the prices to go down? |
Hey, did anybody read an article is Stereophile a few months ago where record companies wanted charge everybody that has an internet connection like $17.00 to make up for lost sales due to piracy? In addition, the wanted to charge every consumer like $120.00 for past acts of copying. That proposition went about as far as I could toss W Bush. |
Phild,
I have a friend that sells cd,s over the internet. He has a few catalogs that are like 1" thick. Occasionally, I go throught them and pick out 20 to 30 disc. Granted, the big megastars latest releases are usually in the $7-9 range. However, I just got the new James Taylor for $6.89 ($14.99 at Best Buy). The usual rule is take the price that Best Buy is selling if for and multiply by .4 to get the distributor price. Some popular CD are selling for 3 times the distributor price. I have over 5000 CD's and add about 30-40 a month. I would have to seriously curtail my spending if I was paying for retail.
P.S. - I build my own CD racks; seems like I'm building one every 6 months. |
CDs cost what they cost because that's what the market will bear. And people who can afford a high-end audio system shouldn't be complaining about the injustices of the marketplace. If you don't like the price, you don't have to buy it. (But that doesn't give you the right to steal it.) |
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. |
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. |
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. |
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. |
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 Rives.Sometimes I pay $40-$50 for Japanese CDs but feel fine about it.By the way,American made discs are usually the worst, I pay the same or a little more for Canadian,British(better than Italian), Austrian and from time to time German.But I can understand those who buy 50 a month. |
Certain people have no problem purchasing a $100 bottle of wine and drinking it out of a cheap 6 oz wine glass. If you tell them it would show much better in a nice 18 oz. $25 crystal Reidel they get upset and say why should I spend $25 for a wine glass. What's more important the wine or the glass? THE WINE. What adds to the experience of enjoying a fine bottle of wine....THE GLASS. I don't like paying $18 for CD's either and most of the time I don't. But I love music and have invested in a very nice cd player. I would rather spend $18 on a cd with a few good tracks then purchase an $18 bad bottle of wine. What's more important the music or the CD player? THE MUSIC. What will enhance your musical experience? THE CD PLAYER Case in point, if you are going to drink good wine buy a nice glass and don't complain. If you love music and purchase CD's buy a nice cd player.....if it sounds bad....think how bad it would have sounded in a sub $100 player. Remember, you spent the money because you want to enjoy the music to the fullest. |
I do not purchase "retail" priced software because of the high prices (have well over 1000 CD's and LP's, each).
I would equate it to people complaining about gasoline prices (when they take a hike). Regardless of what gasoline engine one uses the gas/fuel is what makes the engine run, no matter what "price bracket" of automobile is owned/driven (the same with software and music reproduction).
I own a lot less Hi-fi components than software pieces (same with automobiles Vs gasoline purchases) and consider the "CD/high end" comparison to be non-linear or "apples & oranges", whichever you prefer. |
I can't tell you how enlightening it has been to read all the posts. Tok20000, you in particular appealed to the accountant in me.
In my humble opinion, it's all about the value. When we part with hard earned dollars for a coveted piece of equipment, it's because we perceive a very high cost to value ratio.
When we look at cd's, I, for one, compare them to concert footage on dvd that, in many cases, is less expensive. I compare them to much higher resolution media like DVD-A and SACD that may be a dollar or two more expensive. I compare them to the cost of a movie on dvd, and find them wanting.
Twenty years ago, when cd's were perceived as THE high rez alternative (at least by some), the fifteen dollar price tag may not have seemed so onerous. Now, with all the alternatives offering so much more entertainment bang for the buck, they do seem a ripoff.
Again, IMHO, the cost of the plastic is irrelevant. It's what's on the plastic that matter. Put another way, 2 pieces of plastic, one contains a 15 year old episode of Barney, the other has your favorite latest run hit movie in THX. They both cost the same 80 cents or whatever to make. Which has more value?
If I do know one thing about economic imbalances, it's that there is always a correction and a day of reckoning. It's my theory that the BIG one in the music industry is at hand. Take heart. |
I fully agree with Damon's post. Everyone here on Audiogon is looking for higher end audio gear and ways to improve their music experience. Most of us (depending on our budget)
have no problem buying a $500.00 or $1500.00 single disc CD player. We desire the newer player because we feel it will reward us with a more natural and detailed sound. Or it may be better matched with other components in our systems. And we regard that CD player purchase as a high quality item.
A CD on the other hand, is a mass market item produced at the lowest possible cost. In way too many cases, a CD may be poorly produced and/or compressed in such a way that on a decent audio system it sounds like junk. And how about all those CDs that have maybe two or three decent songs, and all the rest is just "filler" garbage you will never play again. And what about all those back catalog CDs that still sound decent on vinyl, yet are just plain bad on CD.
I rest my case. |
I shop for audio gear on Audiogon to save 30-60% on my purchases. I shop for music at BMG, Columbia House, the multiple annual sales at Streetside records where everything is 20% off, new releases when they're 20% off, Amazon when you can find used, etc. etc. In other words, I don't pay 15 to 20 dollars a CD. I'd guess my average price per CD is 10 to 11 dollars. I only complain a bit, and about both, but I'd say that retail price on CDs is just as ficticious for me as retail price on audio equipment. |
Some may buy the $5000 cd player, many more will buy the $100 cd player. We all must buy the $17 cd. |
I think it's strange that cassette tapes are less expensive than CDs. They cost the same or more to produce than CDs. When CDs first came out the price was 6-7 dollars more than a tape. Maybe they were more expensive to produce then, but now that production is so cheap why are tapes still less expensive? It seems to me that CDs should have actually dropped in price over the years instead of going up. |
The items offered on Audiogon tend to represent the higher end of what's available in music reproduction equipment. As such the record exec is making an argument that the better quality, presumably hi-rez, CDs should cost $15/each. That price seems reasonable to me. |
When I read the starting post, I had the same thought as Rdr4b. People complain about audio prices all the time. As always it is funny to watch some of you look at a forest with a microscope, and call yourselves biologists. When you buy a CD, you are not really buying the plastic and aluminum, and Circuit City and Best Buy, I guarantee, are not making money on CDs. From the distributor, a CD costs a store around $9, new releases around $11, but it varies quite a bit. That $16 retail CD has to pay a lot of people. Its the same thing as books. |
I would also hazard to note that a place like A'gon is the essence of a competitive market--people pay what they think its worth, or they don't buy it, and if someone values it more, it gets sold to someone else. Contrast that with the retail CD market which has now been judged to be the subject of, effectively, price fixing. I think I'd like a CD market where I was in control of deciding what software was worth how much.
B'sides, getting back to the original quote, I complain about high equipment costs *and* high CD costs all the time. Maybe I just like to complain... |
I buy expensive equipment and cables. I don't like paying $15 for CD that's poorly mastered. I don't mind paying $25 for the same XRCD. If the recording industry could consistently give me good quality at $18 to $20 I would be happy. (I'd be happier still if I could buy really great vinyl at that price) |
I purchase CD's directly from a distributer. My cost: $5 to $6 per disc. It's not the record companies marking up the disc it's the retail outlet. Circuit City sells CD's for $9.99 and they are making a 100% profit. So, when you go into a store to buy a CD for $19.99 take my advice and lube up in the parking lot because your about to get f______d.
P.S. royalties for artist range between 2-15% of the price the distributor pays. About 0.10 to $0.90. |
I think it's because you're paying the music industry machine, not the artist. As noted above, a CD is worth pennies, it's the intellectual property on it that is valuable. When you pay a band for their music, you feel good, because you are giving money to the intellectual property owner. When you buy a CD at the Wherehouse, you feel crappy because you're paying both the Wherehouse and the industry weenies getting rich off the band's talent, neither of which contributed to the music in any way.
I've never felt ripped off or price-hesitant during any CD purchase where I bought directly from the band at a music festival (for instance).
Another reason I would cite is that audio components are one stop shopping. You save up for your new toy and you buy it and it lasts you a good long while. CD's are a recurring expense (for most people), which tend to collect the majority of the bitchin' (gas prices, movie prices, etc.). |
Ok, I will admit that audio cables may be more marked up (or on par with CDs) than CDs.
I was mainly referring to electronical components. The stuff the post is initially referring to: $5k CDP, $10k amp.
Cables themselves do cost very very little to produce in many instances. However, many cable companies swear that their high end cables cost lots of R&D to produce.
My 2C
KF
|
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). |
I believe that you will find the general conscensus to be the same.
We don't mind paying more for equipment (in which we consider to be of fine quality), meals, clothing and possibly even automobiles (in many cases)this also includes high quality recordings. Personally, I would have no problem paying $20 for a quality recording. However, most of what they offer us is trash. Thus, you are comparing apples and Turnips.
Happy Listening,
Damon |
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 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. |
Well...
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.
KF |
