RIAA Says CDs Should Cost More 540
EatingSteak writes "The folks over at Techdirt just put up a great story today, with the RIAA claiming the cost of a CD has gone down significantly relative to the consumer price index. The RIAA 'Key Facts' page claims that based on the 1983 price of CDs, the 1996 price should have been $33.86. So naturally, you should feel like you're getting a bargain. Sounds an awful lot like the cable companies saying cable prices are really going down even though they're going up."
Re:My eyebrows are raised.... (Score:5, Interesting)
Yup (Score:3, Interesting)
Thats an age old truth.
Now, thanks to economies of scale and lots of hours of research, it's much cheaper to produce the individual cd.
Not only that, due to IT it is also cheaper to produce the individual album.
I'm still waiting for legally downloadable music to be as problem free and cheap as the distribution method should allow.
until then, Happy Mp3.com. (yes i stopped buying cds the first time i got a malware loaded cd).
The distribution is already a lot cheaper, which means that the price has to cover three things: Development of the site, music production and marketing.
Please lower the price and drop the drm.
the cost stuff (Score:3, Interesting)
Marketing costs (Score:5, Interesting)
FTFA:
For every album released in a given year, a marketing strategy was developed to make that album stand out among the other releases that hit the market that year. Art must be designed for the CD box, and promotional materials (posters, store displays and music videos) developed and produced. For many artists, a costly concert tour is essential to promote their recordings.How about you all agree to stop marketing the CDs and just let the people choose what they think is good, rather than trying to tell them? We'd all save millions.
Bullshit. (Score:2, Interesting)
They can't be serious. Maybe, instead of "CDs should cost more" it should be "Record execs should cost less".
After all, it's not like manufacturing cost should be an issue. Hell, my great-uncle used to work at a post office... When someone mail-ordered a CD and the address was wrong, the sender of the CD would not pay to have the package forwarded. Instead, they'd just ship another package, because this was apparently cheaper. The post office was told to throw away the CDs and wait for the subsequent re-delivery. Of course, then people began stealing the discs from the garbage, so the post office had to start DESTROYING them (by incineration, iirc) every week instead.
Long story short, when you order a CD online, the finished product cost more to ship than it did to make. The price is still totally unjustified, especially considering that the artist's cut is almost nothing.
People who exploit others for profit are the scum of the earth, and record companies scam pretty much everyone else in the music biz, from the artist all the way down to the consumer. It's disgusting.
Re:What a joke (Score:5, Interesting)
No it is not. Ask what happens to unsold CD's at the local music store. Prices are artificialy high by created shortage. Surplus is returned, not sold on a discount. Ask your local retailer what happens to unsold titles that waste valuable floor space.
Re:Because it's not like production ever gets easi (Score:2, Interesting)
Playing devil's advocate for a moment, what you say about the cost of manufacturing a CD is absolutely correct. What you're not factoring in is the increase in cost of studio time (rent goes up with inflation, as does the price of labor for the guy(s) running the boards), artist payments (in theory, this should also go up with inflation), marketing costs (have you seen the price of a 30s spot during the Super Bowl?), and of course the costs to pay RIAA's troupe of lawyers and executives.
Does it have to be that expensive to produce music? Absolutely not! With modern technology, an aspiring artist can record RIAA-quality (ha!) music at home for a mere fraction of the cost of studio time. Grassroots marketing, word of mouth, and touring can make for both cheap and effective promotion. Cutting out the middle man (RIAA) allows more money to go to the right places (production, artist) while still lowering prices. Will the RIAA ever get their acts together and do the Right Thing (tm)? I doubt it, since they're the quintessential middle man. Like the GEICO commercials, artists need to cut out the middle man and pass the savings on to you.
Re:Because it's not like production ever gets easi (Score:4, Interesting)
The only reason I expect a CD to be inflation-adjusted cheaper today than in 1983 is that in 1983 they were still selling primarily tapes and some vinyl, and the only people with CD players were mostly audiophiles and early adopters, and the CD players had cost them a fortune and were part of premium stereo systems. No one had CD players in their cars, or portable ones, CD players were big, expensive components for rich high-end audio enthusiasts, who were clearly willing to pay a huge premium for the CD experience. The price of a CD in 1983 should be inflation adjusted and compared with the price of an SACD [wikipedia.org] today. CD's are now the lowest-common-denominator standard format for the masses and should be priced as such. Had the price of CD's not fallen dramatically since the 1983 price, they would never have gotten popular and remained inaccessible, which would be an example of the RIAA companies shooting themselves in the foot, reducing profits trough overly high prices and small unit sales.
So pricing changes since '83 are a silly comparison, because the product's placement in the market changed entirely since '83. CD's have been the de facto audio standard now since at least 2000, I'd like to see what inflation adjusted prices have done from 2000-2007. That would indicate what CD prices have been doing.
Re:Please, do raise the prices (Score:5, Interesting)
As it is, many of the indie artists I have worked with, and in some cases, recorded, price their records below the RIAA retail range of $16-$22, so they can sell more. A huge number of indie CDs are $10-$15, which is much more in line with what the market will bear.
The RIAA will not make good decisions. They want the market to react to it. They don't want to react to the market. As long as they view the industry that way, they will continue making bad decisions.
So let them.
Reading this news, you can be (Score:3, Interesting)
I used to spend quite a bit of money on music, movies and theaters. I recently spent a weekend working out my budget in the last 15 years (wonder why I kept all these shits for all these years), and found out I spent on average 5K per year on those items (before I made my decisions, that is). The biggest chunk goes to CDs and cassette tapes. It's even more than what I spent on food (Unbelievable, I spent less than 50$ per week on food).
Then, in early 2001, I decided not to do that anymore. I haven't bought a CD since then, went to theaters only twice, rented movies less than 10 times. Now, every time I crave for movies, I go out for an excursion in the forest or in the mountain, or get a good book (which cost the same as going to theater but the pleasure of reading certainly lasts longer). Well, all these monies I've saved...
I wish I've done this 20 years earlier. Imagine all the monies saved, with wise investment or accumulated interest, my pension fund would have been much better off.
I'm not saying you should give up all these, but you certainly don't have to pay your "taxes". You can certainly do something about it though, like give less money to those fatty RIAA executives, for once.
Re:#include (Score:5, Interesting)
Quantity 5,000: USD$0.91.
Quantity 10,000: USD$0.79.
Explain to me again why these fsckers cost $16.00?"
It's real simple:
+$16.00
-$12.01 (75% cut for recording label)
-$01.33 (8.33% cut for artist)
-$01.33 (8.33% cut for retailer)
-$01.33 (8.33% cut for manufacturing & distribution)
-------
$0
Supply and Demand (Score:1, Interesting)
I have near limitless supply toe jam, ear wax and bodily fluids I'd like to mass distribute. At the price point I choose of course.
Re:Because it's not like production ever gets easi (Score:4, Interesting)
Studio-time is trough the floor. It used to be just a few decades ago that a studio capable of producing comercial-quality records cost on the order of a house. These days you get superior signal-handling from gear that costs literally 2-3 orders of magnitude less. Hell, $10K will buy you equipment good enough to win awards with your records, I know because my co-worker across the hall did 2 weeks ago. (Spelemannsprisen, the most prestigious Norwegian music-award)
the price of labor for the guy(s) running the boards), artist payments (in theory, this should also go up with inflation),
Actually, it should go up proportionally to average *salary*-increases in a society, which is *MORE* than inflation if the society is getting richer. This is however in this particular case more than offset by two facts. One, modern equipment is *much* less labour-intensive and two, the lower leads to increased availability, which leads to more people capable of dealing with much of it. Many bands even do a lot themselves. Yes they'll need one or two (preferably good!) sound-technicians for the couple of days the actual recording takes. But let's face it, that works out to paying an engineer for a week. For well-selling records its down in the noise.
Marketing costs whatever you want it to cost. You can spend $100 or $100million promoting a single album. That was always so.
Fact is, the RIAA is just whining. There's nothing whatsoever stopping them from selling an album for $35. I encourage them to try. People are then, offcourse, free to simply not *buy* that. But that's a free market for you. I guess they're too used to monopolies and dictating terms.
Some Reasons People Pirate..... (Score:2, Interesting)
1. Nobody wants to shovel out $25 for a CD with 9 crappy songs we don't want and 1 that we do.
2. We can make out own compilations with the songs we want on them, in the order we want. Nothing is more of a buzzkill than listening to a Van Halen power track, and have the next track be some sappy love ballad, or one we don't like.
3. If we don't like the music, which is sometimes the case, since labels don't usually differentiate different versions of the same song by the same band on different albums, we're stuck with a $25 beer coaster.
4. Why the hell would we want to pony up $25 for the one or two songs we actually want to listen to?
I don't really understand why the RIAA is publicly saying that CDs should cost more. We feel ripped off even at $15 for a CD, let alone $35. Just saying that something should cost more than it actually does isn't gonna make people feel like thy are getting a bargain. Just because the price of diesel dropped from $3.20 a gallon doesn't make me feel thankful for having to pay $2.90 a gallon now.
So, why should I, or anyone else, feel thankful for being overcharged less that the RIAA says they *should* be charging? It's like someone telling you that you should be thankful for 9 spankings instead of 10. Either way, it still sucks. This is just a really bad attempt at making up want to stop pirating because we should be thankful that the are not charging us as much as they *should* be.
Re:Because it's not like production ever gets easi (Score:3, Interesting)
But I don't see how it's relevant to this discussion. We were talking about what the RIAA companies have done with the price of CD's. They're claiming they went down, based on invalid data. As you said, the up and coming model of internet distribution has so far, for the most part, been priced about the same as CD's, so it's not a form of competition driving the price down on CD's, yet. I don't see how similarly priced digital music distribution relates to an argument about whether the price of CD's has gone up or down. But you're right that the price of internet downloaded music should sooner or later fall off a cliff, as the studios, who currently get over $0.90 on the dollar of the money, become entirely excluded from the process.
Re:Without doing actual research... (Score:2, Interesting)
Have you bought a gallon of gass lately, bought an ounce of coffee, seen what you spent on an movie with popcorn and coke?
Tried to buy a 'coffee to go' for under 2 Bucks?
A lot of things have gotten more and more expensive, a little bit each year.
It has to, _because_ of inflation.
The tech sector is about the only thing getting cheaper constantly.
Re:#include (Score:3, Interesting)
Suuply and demand can not be used for monopolies (Score:4, Interesting)
No, it is only half the supply and demand model. The demand adjusts to the price, the supply does not. The supply and demand model describes an equilibrium price that would happen in a perfect market. Most recordings are covered by copyright, making their production state granted monopolies, which is as far from a perfect market as you can come.
Supply and demand can be used to model what happens with recordings whose copyright has expired.
Re:Without doing actual research... (Score:5, Interesting)
Computers are a bad example because its hard to compare apples with apples (or even Apples with Apples). The specifications of computers have gone up exponentially while the prices have, at least, failed to grow with inflation. Meanwhile, the specially designed low cost "home computer" (a la C64, Sinclair etc) has been replaced by bargain bucket versions of "office PCs" essentially built from surplus components from an overcrowded industry...
In the case of CDs - which are still the same product as in 1983 - what should have happened is that the initially high "early adopter" price should plummeted in the first few years until it hit the old LP price point, then followed inflation.
Personally, I don't have any great problems with the current price of a CD (although it would be nice if much more of the profit went to the artist) - but they were overpriced during the 90s.
Big problem for the music industry is that they would love us to all "buy the white album again" on SACD or some new format, but the pesky techies have decided that the 12cm optical disc is "just right" and keep making the new players backwards-compatable, then MP3 comes along and is huge, but (whimper!) you can just convert your existing CDs! Oh, the humanity!!!
Re:My eyebrows are raised.... (Score:2, Interesting)
Neither am I. So do I. That's rather my point.
But most of the bands that you go to a big hall/stadium to see, the "recording industry bands" do not; even though this is actually their only real avenue to do so. The newer bands are often surprised to find that after the first major tour as top billed act that they are deep in debt. Even estabished bands often do not make money. Zappa stopped touring because he couldn't afford it anymore, despite selling to sold out crowds of thousands; and even tens of thousands.
Stay small. Make your own recordings. Manage your own money and get to keep it.
And producing your own CDs has never been cheaper, there are recording studios all around and they don't cost too much for a couple of days' session.
You can now buy outright a recording deck that abolutely blows away the equipment that Sgt. Pepper was recorded on for . .
The recording industry functions primarily as a financial institution these days. They lend the money to record and you not only have to pay them back (and it is their accountants who determine when this is), but have to pay them with your rights up front to get the loan.
You can buy all the gear/studio time you need for so little that most middle class people can finance an album with a simple, unsecured loan.
My underlying point is that is wrong to think of improving the music "industry" by proping up the recording industry. There are these people known as "musicians." People tend to forget that.
The recording industry does not any help other than to the grave. They are a twisted, evil and corrupt organization that has been ripping off musicians for over a century now and we do not need to put up with it anymore.
When you wish to fix music, fix the state of the musicians, not the lawyers. The musicians will record anyway, because that is what musicians these days do.
KFG
Comment removed (Score:5, Interesting)
What are they smoking? (Score:5, Interesting)
Almost every newsagent and bookshop has a photocopier. Yet people don't commonly "pirate" books and newspapers. Why? Well, because it's cheaper to buy than to pirate. It's my reckoning that if CDs cost about £3.00 (€4.55 / $5.88) each, then it would not be worth most people's while to go to the effort of copying them. Nor would anyone think twice about buying a CD at that price. The record companies could easily afford to sell CDs at for £3.00 if they didn't spend so much pursuing failed copy-prevention schemes and paying fatcats to do nothing useful. And they'd probably sell enough units to be earning more than they were before. People would be more willing to take a gamble; if it turns out to be shite, it's not such a great loss.
Now I'm going to tell you a story. It's a sad story. About music, and greed, and the Perversity of Human Nature.
There was a bar I used to drink in once. They had a juke box in there. An NSM Prestige, played 45s, 160 selections. 10 pence a song, six for 50p., and it was always playing. Everyone who came into the place used to walk up to the machine, look at the records, drop in a coin and put on a tune.
Actually, the juke box wasn't always playing. For one hour a fortnight, it would be silent, while the man from the amusement machine hire company emptied the coin box, changed the records and cleaned and serviced the machine. And the bar was closed sometimes. But you get the general idea. It was a popular machine. It also played the records in the order they were arranged in the magazine, not the order in which they were selected (that way, it used only 20 bytes of RAM to store all its selections; which is important when your brain is a single-chip micro with just 64 bytes of RAM), and it was quite possible that you'd have to stay awhile to hear your track if there were a lot of selections from the other end of the machine to be played. That meant the bar sold more beer and food, since the Perversity of Human Nature is such that someone who has paid to hear a song will gladly spend a few pounds on refreshments rather than waste ten pence by leaving before the song comes around on the record machine.
All that changed one sunny afternoon. The man from the amusement hire company came round as usual; only this time, as well as merely emptying the coin box, changing the records, cleaning and servicing the machine, he also tweaked the price up to 20 pence a song.
After that, people just used to walk up to the machine, look at the records, and walk away again.
And the moral of the story, if you're really choking for this story to have a moral, is that if you charge too much then people won't pay it.
Re:My eyebrows are raised.... (Score:1, Interesting)
Is this a ploy to avoid more lawsuits? (Score:3, Interesting)
This seems to me a media ploy from the RIAA to "claim" that they have a just reason to raise the price of a CD back to the pre-lawsuit range.
Nevermind the fact that the production costs have plummeted.
Based on my rough calculations (rough = not really doing any research, just making a point), and using the same logic as the RIAA, microwaves should be retailing for about $4000, radios for well over $50,000 and a car should be in the millions.
Re:My eyebrows are raised.... (Score:5, Interesting)
Then again, practically every high school girl has a $5000 Louis Vuitton purse (god those things are fugly), so it's not like there's a big bargain-conscious consumer base. And there's always the rental stores like Tsutaya, which seem to have more CDs than DVDs, so the thrifty can rent a CD for a couple bucks & copy it to their minidisc/MP3 player.
Re:My eyebrows are raised.... (Score:5, Interesting)
On the other hand, we also don't generally get DVD's packaged as a bonus [yesasia.com] on a regular basis. Japan does. Japanese inserts are also usually much thicker than ours, with tons of photos - heck, several of my "regular" (non-SE) CD's from Japan came with a whole separate photo book (as does the random CD I'm linking to above). Even the CD cases themselves are thicker and better made. In short, you get what you pay for.
The RIAA's problem is they've been downgrading the value of their product for years, which of course is going to drive both demand and prices down along with it. Imagine if every big new release here came with the first couple singles (including b-sides), a live DVD, and a photo book - and that was the regular edition! That's akin to the situation in Japan much of the time. So it's no surprise that CD's there cost $25 or so and that people will pay it - they'd pay it here too if there was actually that much value in the product being offered.
Re:My eyebrows are raised.... (Score:3, Interesting)
Sorry dude, but that's pure bull. Reality is that, back in 2003, 60 percent of Hollywood income came from DVD sales [cbsnews.com]. *60 percent*. That's *massive*. And given the expansion in sales and rentals of TV shows, in addition to movies, this number has probably only increased.
Re:My eyebrows are raised.... (Score:2, Interesting)
Find any band that sounds like one of your premade bands (but is probably better)
Sign them into an explotative contract (that they cant get out of)
Record their album (like it says in the contract)
Shelf it and never release it (so they don't compete with your premade band)
This happens enough to be scary.
Re:What are they smoking? (Score:3, Interesting)
Format-shifting (AKA home taping) of CDs you own is explicitly legal in most jurisdictions and unprosecutable in the others (no jury is going to convict you, they've all done it themselves; and more to the point, neither is any prosecutor prepared to run the risk of a jury acquitting you, so the evidence will go "missing" and you'll be off the hook). What I would like to see is an arrangement for direct payment of royalties; so if you copy an album someone else owns, you can pay the copyright holder directly (minus unused services e.g. stamping, sleeve artwork, delivery, sundry markups) and your copy is then just as legal as one bought in a record store.
Re:My eyebrows are raised.... (Score:3, Interesting)
Caring about the music, or even the fans, does not equate to financial stupidity. As long as they can sell CDs for $15 a pop without complaint, they'll do so. (Kind of like speeders who are "just keeping up with the flow of traffic".)
The other thing is that small indie bands/labels need more income per CD to continue operating, since their volume is so low. Major labels have all kinds of economies of scale that should allow them to sell for less, but of course they don't do it.