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."
My eyebrows are raised.... (Score:5, Insightful)
Re:My eyebrows are raised.... (Score:5, Interesting)
Re:My eyebrows are raised.... (Score:5, Insightful)
Re:My eyebrows are raised.... (Score:5, Insightful)
Or more likely, they'd blame the drop in sales on piracy and direct their wholly-owned subsidiary members of Congress to push yet more ridiculous legislation through in support of their dying business model at the expense of the citizenry.
Re:My eyebrows are raised.... (Score:5, Funny)
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Re:My eyebrows are raised.... (Score:5, Insightful)
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Music Distribution (Score:4, Informative)
It's a good time to be an indie artist, definitely.
Re:My eyebrows are raised.... (Score:4, Insightful)
"2. Unfortunately, the RIAA's monopoly on distribution is ending. The internet is now a better way to distribute music."
I think you misspelled "finally".
Re:My eyebrows are raised.... (Score:5, Funny)
That's just silly---no member of Congress is a wholly-owned subsidiary of any one company. Ownership of any member of Congress is a much more complex beast involving many different investors.
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But I only bought it for $12! That means, according to the RIAA's math, they're out 21 bucks! I sure showed those bastards, eh?
Re:My eyebrows are raised.... (Score:5, Informative)
But the problem is going the new routes and trying a new business model is somewhat risky. So the put up such statements in the hopes that people believe the bullshit and they can get away with it a bit longer. They don't want to raise prices... they just want to feed us bullshit in order for us to be quiet and be happy that it isn't even worse than it already is. It's a question of relativity.
Re:My eyebrows are raised.... (Score:5, Insightful)
"1) there are plenty of us who were around and remember the initially massively over-priced CD and promises of huge price drops once the technology took hold,
Which they have; they've dropped about 60% in constant dollars since launch.
"2) pretty much everyone of any age already knows that CDs are a lot more expensive than they should be, not a lot less."
Yet nobody is able to exploit this. Even Magnatunes, which pushes the cost of the music production onto the artist, still sells CDs for $8 each, direct. CDBaby, another cool company, sells CDs for $14. And there are hundreds of really cool indie labels -- run by people who are musicians, or who really and genuinely care about the music -- that also sell their CDs for typical pricing.
"This is yet more panic-induced, ill-conceived **AA FUD, when will these people learn how to die with dignity?"
...then why don't you become the one that kills them? I'm 100% serious. If everybody knows that there's this amazingly huge profit margin built into CDs, then there must be somebody out there who can figure out how to find artists, produce their work, pay them fairly, give their stuff proper promotion, and sell a reasonable number of copies at $3 or $5 or even $7. The record companies clearly don't -- they still only manage to net around ten points at the end of the year. From what I read on Slashdot, it's a market that's ours for the taking.
Re:My eyebrows are raised.... (Score:4, Informative)
CDBaby actually sells CDs for whatever price you, the artist, want. For example, we like selling our CD for $10, online or offline. So we set our price at $10. And CDBaby sells them for that. http://www.cdbaby.com/meetgoodwin [cdbaby.com]. Not often I get to stick a link to the band in to a response and actually have it be relevent
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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 w
Re:My eyebrows are raised.... (Score:5, Insightful)
Well, no, they aren't, not entirely.
If one sugar producer decides the "true" price of sugar is $15 a pound, then you can buy sugar from somebody else. But if you want to buy the latest Weird Al or Madonna album, there's only source. It's a monopoly, an in theory limited but in practice eternal one called "copyright". If they double the price of the hot Madonna release, there are a lot of people who won't think that Weird Al is just as good, and vice versa.
It's also important to note that RIAA is a trade association of major music producers, not a single producer. If the major labels (heaven forbid!) were to get together and, say, fix prices [usatoday.com] then market forces would also not apply. Not that they would do such a thing; RIAA is here to help us. I'm just talking hypotherically, you see.
Re:My eyebrows are raised.... (Score:5, Insightful)
and
"But if you want to buy the latest Weird Al or Madonna album, there's only source. It's a monopoly, an in theory limited but in practice eternal one called "copyright"."
Bingo! Mod parent up.
There are no free markets in goods protected by copyrights and patents. These goods are covered by government granted monopolies. It should also be obvious that these monopolies distort the markets or people would likely not bother with them. I mean why go to the trouble to get a patent if it is not going to give you an advantage in the market? Why push to hve copyright terms extended if it is not going to help you in the market?
One quirk though, even without copyright, there is still only one source in the first instance for the work of a particular artist.
all the best,
drew
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Fix copyright; don't ignore it.
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"One quirk though, even without copyright, there is still only one source in the first instance for the work of a particular artist."
Without copyright, there's only one source for the initial creation of the content, but multiple sources for purchasing it once it's released. The only thing preventing me from being able to legally burn a Madonna CD and sell it to you for cheaper than the official distributor is copyright law.
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The same thing can happen to sugar: if an organic sugar producer decides to charge $15 per pound, he can get it if the cost of substituting conventional sugar is too high for people in non-econo
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.
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"It costs less to manufacture a CD than it used to to make an LP ... so if that were true then CDs would cost LESS (inflation adjusted) than LPs did back then."
I'm surprised at how many people aren't aware that for lots and lots of things that are sold at retail, the manufacturing cost is a small percentage of the cost of sale. It's true for PC peripherals (the manufacturing cost for my products is about a third of the cost of sale), it's true for cars, it's true for clothing, and it's true for items in
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The answer is that far fewer copies of the score will be sold, so even though the score is far cheaper to produce, the price reflects both the cost to produce as well as the projected sales volume. Well, sort of, surely there is still some guesswork involved, and a tendency to price all CDs similarly.
I'm not saying this makes things "fair" or whatever. Ask yourself why do all movies at the theater cost the s
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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.
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Once you have the production line up and running, and a steady stream of sales to amortize the start up costs, stamping out another unit costs only a couple bucks. It's like CPUs. In the beginning demand is high, production relatively low, and a large investment has been made in setting up a new product line, so costs are high. Once everything is in place, it costs only a few cents to actually stamp another CPU, and for a product with high production and market penetration, even the costs of labor are sp
Re:My eyebrows are raised.... (Score:5, Funny)
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http://www.powerlabs.org/cdexplode.htm [powerlabs.org]
Re:My eyebrows are raised.... (Score:5, Funny)
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Comment removed (Score:5, Interesting)
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They were still saying that in 1991-1992 when record stores were knocking vinyl down to 80% to 90% off to clear space for CDs.
While albums on Compact Cassettes were still slightly cheaper than CDs. Now think about how much it costs to build something like a cassette and how lonbg it takes to get the music on it - compared to a CD.
Without doing actual research... (Score:5, Informative)
CDs are STILL $13-18 (unless they are at Costco or "on sale", usually), but back in 1983, a decent computer cost $2000 (you can't even buy a computer that bad now, for as little as $299).
Even a nice calculator was about $50 or so (better ones now for under $20). A Color TV (A heavy CRT, 13 channels, click-click tuner) was 2 - 3 times what they cost now (for 121 channels, multi inputs, remote, etc. etc.)
The list goes on and on and gets "worse" (for the RIAA argument) when adjusting for inflation. LOTS of stuff is far cheaper than it has ever been.
Bah.
Clothes, tools, and furniture as well (Score:3, Informative)
I doubt I could have purchased any of these items for the same amount 20 years ago.
The rucksack and vacuum cleaner were made in China, the garden table set was made in Vietnam.
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As my friend who has been in customer sales, primarily home entertainment has often said: It's
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:5, Informative)
And right on, They compare the price of a new product to the price index instead of the price it should have been retailing for. If someone did the math in the same way with a normal valued price, I would bet that they would be a little more expensive now. I guess RIAA might be doing the "see, you getting a deal already so don't pirate" thing here.
Nothing like making you feel good about paying too much for something then by illistrating that they could be at a higher price.
Re:My eyebrows are raised.... (Score:5, Insightful)
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Re:My eyebrows are raised.... (Score:5, Insightful)
The RIAA corps arent interested in you buying more music. They're interested in you paying lots for _their_ music.
If you buy _more_ music, the revenue stream gets diluted. The cost to produce per unit sold becomes a larger part of the total revenue of each unit sold, and they get less profit. More music means more varied music taste and music exposure, in turn leading to less per-unit income off radio stations, etc. Less revenue per unit means less marketing capital, means less power to push independents off the air and off the shelves. Less control. Less money to those who control the market channels, and a larger piece of the pie to more of the actual artists and composers.
Not at all in the RIAA corps interest.
"Basic economics."
Basic free market economics. But the intellectual monopoly industries are nothing like a free market.
The fact is that the digital revolution has cut production costs for professionally produced music down the level that basically anyone who can afford a halfway decent used car can afford to make their own professionally produced album. The internet revolution has cut distribution costs down to zero. On a free and competetive market, the pricing of music would reflect that, and the prices would fall down to maybe a dollar per CD, and far less for the most widely produced CD's.
As long as we allow the monopoly rights to remain, this gain of wealth will remain unrealized, and we'll see far less music than we should, far more marketing (and its even less savoury accompanying corruption a payola and lobbying) than we should, and a much poorer culture than we should.
let me be the first to say.... (Score:2)
I'll One up you... (Score:3, Funny)
What a joke (Score:4, Insightful)
Re:What a joke (Score:5, Insightful)
So yah, if it cost the same amount to actually make the CD in 1983 as it did in 1996, or 2007, there might be some validity. But the physical cost of the CD fully packaged is 10 cents or so.
So we're expected to believe the majority of costs in that same article are related to booths. When a 6$ record is replaced by a 14$ CD, the price works out the same. Nothing got cheaper, they just want us to believe a CD is magically as hard to make now as a LP in 1983.
Re:What a joke (Score:5, Informative)
Indie artists who get stuff replicated in 1000 CD batches from OasisCd or Diskmakers pay about $1.70 per CD. These are PRESSED, retail-ready, in standard jewel cases, in color, with barcodes, spine labels and all the trimmings, shipped to your doorstep.
So, a physical cost of a CD is $1.70 or so for non-RIAA indie music. If you go to Sony DADC or another large manufacturing house and order 100K or gold (500,000) press jobs, your cost for a retail-ready jewel case+CD is between $.60 and $.90, depending on printing options. This info is from an actual quote. 10 cents a fully packaged disc is unrealistic. Materials alone are more then that. 10 cents gets you a pressed CD with 1 silk-screened color and a mylar sleeve.
Remember that about 50% of any retail price consists of retailer/wholesaler cuts. Indie artists who sell through Amazon watch as Amazon takes 55% of the retail price, distributing 45% to the artist. Assuming a $12.00 CD, lets break this down:
Out of that 45% ($5.40), the artist has to fund:
shipping to Amazon ($.25)
Duplication ($1.70)
17 U.S.C. 115 compulsory royalties ($.91) low end cost.
Producer's standard 20% cut ($1.08)
This leaves $1.46, with which the artist has to eat, promote, fund the next record, and tour on.
Anyway, the point is, CD pricing is complex. The RIAA is wrong though. CDs should cost less, but at the expense of our convoluted, monopolistic distribution system (cartel?), not at the expense of the artists.
Re:What a joke (Score:4, Insightful)
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But that really wasn't my point either. I don't think we need to debate any of the costs of creating / manuf
Re:What a joke (Score:5, Informative)
SCENARIO 1) The indie artist does a cover. They have to pay compulsory royalties. When Rusted Root did "You Can't Always Get What You Want", they had to pay royalties. Conversly, when I cover a Rusted Root song, Rusted Root is getting 9.1 cents per song per album sold in royalties from my CD sales.
SCENARIO 2) If the indie artist wrote their own music and signed a contract with a record company, hopefully they weren't stupid. If they weren't stupid, the contract included a clause that says something like:
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15. COMPULSORY ROYALTIES
a. All musical compositions or material recorded pursuant to this Agreement which are written or composed, in whole or in part by Artist or any individual member of Artist or any producer of the masters subject hereto, or which are owned or controlled, directly or indirectly, in whole or in part, by Artist or any individual member of Artist or any producer of the masters subject hereto (herein called "Controlled Compositions") shall be and are hereby licensed to Company:
i. A royalty per selection equal to 100 percent (100 %) of the minimum statutory per selection rate (without regard to playing time) effective on the earlier of (A) the date such masters are delivered to Company hereunder or (B) the date such masters are required to be delivered to Company hereunder. The aforesaid rate shall hereinafter sometimes be referred to as the "Per Selection Rate";
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The above was pulled from an actual contract. It allows the artist to earn compulsory royalties on their own work, in addition to sales royalties. This is usually a good thing. As you can see, that is section 15, which is from a 32 section contract that runs 24 pages. This industry is exceedingly, needlessly complex. I wish it weren't so.
Anyway, I hope this is a decent explaination. Remember, royalties are paid separately for both the RECORDING and the COMPOSITION.
Re:What a joke (Score:5, Informative)
Commercial CDs are typicaly not burnt, they are pressed. In some ways they are like vinyl in the way they are mass produced, from a master, stamp stamp. The process i'm familar with uses a glass master which then a laser is used to etch the photo sensative layer, then several metal molds are made. Then the metal molds stamp the plastic layer, and reflective layer is added.
This is not like your home brew system.
Tape was always more tedius, you rather needed a loop master which would play and replay as banks of decks recorded them. The process could be automated to a large degree, but still the speed at which you copy was limited, vs pressing while requiring more prep time produced copies faster per unit.
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.
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If the unsold CD's were sold by adjusting the price, they would not be unsold. How many unsold DVD players get sent back to be destroyed? They are discounted and sold anyway. I can buy a DVD player for about the price of 2 CD's. Production and developement and IP property value is much higher in the DVD player than in the 2 Cd's.
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:Suuply and demand can not be used for monopolie (Score:3, Insightful)
Wrong. You only have a monopoly if there are no alternative products. Last time I looked the music industry was positively overflowing with different artists producing both similar and different styles of music.
If what you're referring to is a monopoly, then every single employee on the planet has both a monopoly of their labour, and on their production. Yet amazingly the labour market shows no signs of being a mon
Re:What a joke (Score:4, Insightful)
I don't think I'm the first to say, but it really isn't supply vs. demand at all.
"Supply & Demand" implies a free market, ie, one with (theoretically) infinite suppliers and infinite consumers. In practice, we just say "many" suppliers and consumers, both of whom are price takers. Emphasis on takers.
Even with the concept of monopoly pricing "creating a shortage", that is more like OPEC (a large group acting as a monopoly). OPEC, believe it or not, is a price taker. They do not say "ok I will sell you this many barrels of oil at, say $60/barrel. They can only set a goal price of $60 by restricting supply.
Retails sales are a completely different ball game. Of course, by the definition of copyright, and the fact that the record label holds it (as opposed to the artist), that label has a monopoly on selling that artist's music. To prevent competition from similar artists, they have a cartel going for them.
So, one could say that the labels have at least a partial monopoly. But here's the kicker: they are price makers. In a market (such as the market for futures, where you get quote "oil prices"), a monopoly would set supply. In retail/wholesale, the label sets prices (well, wholesale prices). There is no market to buy whatever's there at whatever price will make it move.
Rather, the labels set a price (at least a wholesale price), and the public buys however many units they feel like. The supply is theoretically infinite... it'd be a tough case to argue that they would stop printing additional CDs as long as they keep selling. Basically, they set the price (retail is $12.75 IIRC), and the public buys or does not buy.
Because it's not like production ever gets easier (Score:4, Insightful)
You don't even want to hear how much the RIAA thinks you should have to pay for a machine capable of a billion calculations per second...
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Inflation indices imply that prices have risen over the last few decades. However, those numbers are averages across a wide variety of (generally non-technical) goods. There are numerous causes of inflation, and I won't discuss that here.
Moore's Law is not strictly speaking an economic law, but with the benefits of Moore's Law, we see electronics and machines become more affordable. In all likelihood, pro
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.
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.
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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
In Other News... (Score:2)
Please, do raise the prices (Score:5, Insightful)
Re:Please, do raise the prices (Score:4, Insightful)
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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.
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)
It doesn't matter (Score:4, Insightful)
I'm rich!! (Score:5, Funny)
Pricing and inflation?!? (Score:5, Insightful)
Also, the cost of international phone calls has declined markedly since 1925. Based on inflation, we should now be paying $500/min for international calls. Don't tell the telcos!
Similarly, the cost of motor cars has come down since the Model-T Ford - they should cost $1.5 million each (based on inflation - discounting better performance these days)
Or... perhaps technology and economics has some influence on the price of things too..
How Ironic (Score:3, Insightful)
Well, guess what. As society enters the information age, that means that information is becomming commoditized and the service value of information starts to exceed the control value. So liars who control information like Hollywood and the Fed (and Microsoft) are in serious trouble. How ironoc it is that, unlike the service sector, they will have no pricing power as they destroy each other.
Re:How Ironic (Score:4, Insightful)
The fed says jack and shit about the value of my money. Price Chopper, McDonald's, and Wal-Mart are where I discover the value of my dollars.
All the fed does is set a price for new money put into the system, which is after all the Fed's job. It can't lie about the "value of money" any more than McDonald's can lie about the value of the ice scraper I bought at Wal-Mart.
Well, guess what. As society enters the information age, that means that information is [becoming] commoditized and the service value of information starts to exceed the control value. So liars who control information like Hollywood and the Fed (and Microsoft) are in serious trouble. How [ironic] it is that, unlike the service sector, they will have no pricing power as they destroy each other.
Amazing, how you can use so many words and not actually say anything.
The "Digital Age", or "Information Revolution", or even "flat-earth effect", is pretty well set upon us now. And you know what? Controlling Information is still the best way to make immediate wealth. Google makes their money allegedly enabling the free flow of information, but they control their means and methods with a zeal greater than Coke ever used for their soda formula. The Chinese are building industrial powerhouses, but they're very careful to control the knowledge of the real cost and value of their operations from anyone.
So what if you can now buy music from China, software from Europe, or outsource your Russian McDonald's drive-thru to Utah. People still need to eat, sets still need to be built, and governments will still collection taxes. The "Information Age" might be as big a shift as the introduction of the counting machine and the photocopier, but it's not as big as you think.
Key fact, cost of mass production (Score:5, Informative)
No, because CDs are by far cheaper to mass produce than cassettes or, in all fairness, vinyl. For a small production run of vinyl, i'd expect to spend $1.00 per disc [recordtech.com] including a paper dust cover. CDs I would expect to spend 1/2 that [communitymusician.com] with a basic sleve for a small production run. Cassette I would expect to spend double that of CD.
Yet for some reason, they sell commercial cassettes for less than a CD.
Not to speak of mastering seems to be done by some yahoo with protools.
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.
#include <derisive_laughter.h> (Score:5, Insightful)
Quantity 10,000: USD$0.79.
Explain to me again why these fsckers cost $16.00?
Now then, what was the per-unit pressing cost, quantity 10,000, of a CD in 1980? If we calculate MSRP as a percentage multiplier of the raw pressing cost, what should music CDs cost today?
Schwab
Hell, that's nothing. (Score:5, Informative)
(...goes to books to make sure it's the right number...)
And that's with my shoddy economies of scale. I can't even imagine where the RIAA gets this kind of thinking, but I guess they gotta do what they gotta do to keep up with the price of cocaine, right? Can't imagine the weak dollar has helped them with their fine imported Columbian stuff.
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
Re: (Score:3, Interesting)
The issue is that none of the things you listed should hav
Cost Of Production Is A Very Small Amount (Score:5, Insightful)
Most of the cost of a CD is in the marketing and (of course) profits for the record company. Sure there are a few extras, like the pittance they give the artist, but the majority of the cost is MARKETING. This gets more and more expensive as they get more and more ridiculous in their marketing and the cost of marketing increases over time.
Another spin might be that CDs are now more expensive to produce due to all the non-redbook copy prevention measures that they keep trying to put on "CDs" now.
overpriced (Score:3, Funny)
Pure BS (Score:4, Insightful)
This is one of the most laughable things I have ever heard.
CD prices were always higher than the equivalent cassette tape, which was much more complicated to produce and had the same production and marketing costs.
FTA: For example, when you hear a song played on the radio -- that didn't just happen! Labels make investments in artists by paying for both the production and the promotion of the album, and promotion is very expensive.
The only thing that gets played on the radio is the latest Britney Spears bubblegum crap-ola. In fact, Mandy Moore recently apologized for making such bad music [cinemablend.com]
So we have to pay for all the payola [dontbuycds.org] in getting the radio stations bribed [slashdot.org] to play the songs on the radio.
And then when a CD gets scratched, broken, or stolen, do we get a free replacement? Oh no, we have to pay the full retail cost all over again even though the RIAA wants us to think that we have somehow "licensed" the music from them.
I am glad that they are sweating, which they must be in order to be trying to play the "victim" game. The days of the Internet are here to stay, and bands can finally distribute their own music without getting shafted.
In the linked article it says that only 10% of all CD's make a profit. The other 90% of CD's put the bands into debt to the record companies, making it a really bad deal to sign a record contract. Courtney Love does the math. [salon.com]
The RIAA sounds desperate, and I hope they are -- it would serve them right.
"Secret" RIAA Conference (Score:3, Funny)
Post-scarcity needs getting used to (Score:5, Insightful)
I do have better data for computers. I have a 1994 price guide to computers when bottom line computers, 386s cost around 1500 dollars, twice as much as a midrange new desktop would today.
All of this is stuff most readers here know. (Although I am expecting at least a few people will correct my specifics.)
What I have noticed, however, is that many people have not psychologically adjusted to this, even when they intellectually know it is the case. I have noticed this most at my work at Free Geek [freegeek.org], where often people come in, with a Packard-Bell Pentium, and explain at some detail that the quad speed CD Drive works, if you just wiggle it around first. Or that their 14 inch monitor still works, but it might blink off every few minutes. Meanwhile, we get truckloads of P-4 systems every few days.
The point is, I think many people (often older people, but not always that much older), still have a mindset that computer and electronics are rare and valuable, instead of being the mass-produced, quickly obsolete, pieces of junk they are. And I think that many of these people are honestly confused about how valuable their product is. Of course, the RIAA people know that AOL mails out millions of CDs a month (do they still do that?), and that CDs cost "under 1 dollar to make" ( wikipedia on CD manufacturing [wikipedia.org]). Of course they know these things intellectually, but I really do think they have a mindset that they are producing a rare and valuable resource, and that they aren't asking for much in that they haven't raised their prices with inflation.
Post-scarcity takes some getting used to. I consider the entertainment industries inability to come up with a more financing method that doesn't involve creating false scarcity to be one of the less harmful inabilities to adjust to a new paradigm. I consider the fact that the US political and industrial leaders really don't understand (even though they know) that the US has lost textiles 50 years ago, consumer items 40 years ago, vehicle manufacturing 30 years ago, electronic manufacturing 20 years ago and computer manufacturing 10 years ago (numbers somewhat generalized), and that all of those things are now produced overseas for a fraction of a US worker's hourly minimum wage, to be a much more dangerous symptom of the same disease.
RIAA = Anti-Free Market? (Score:3, Insightful)
Corporate math (Score:5, Insightful)
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.
Then what about DVD's ? (Score:3, Insightful)
The fact is, its all about greed. I think other slashdotters have already covered the whole scales of economy so I won't take it any further than that.
I can tell you now that I simply don't think a CD is worth $33. They only think its worth that much because its what they think they can get away with it.
I agree completely (Score:3, Insightful)
The RIAA treats us like idiots (when it's not like criminals). CD stamping costs only cents in quantities of 10,000+; even in Australia it's only 99c each for a run of 10,000 including a jewel box (ref: www.cdroms.com.au)
Did anyone even read the RIAA site? (Score:4, Informative)
What they postulate is that all the non-technical/manufacturing costs have gone down, but the cost of advertising, recording, wages, etc. etc. has actually increased (these type of things will increase along with the CPI).
So in effect, the cost of making the CD has gone down. But the cost of making the CD successful by finding new artists, recording the music, advertising, etc. has gone UP!!!
I hate the RIAA, they are despicable. But you're not even reading the articles!
No - I'm not new here
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: (Score:3, Interesting)
What's interesting is that there actually is "piracy" of expensive, specialised books (mostly university textbooks with a limited readership; certainly not big sellers such as
The RIAA is partially correct ..... (Score:3, Insightful)
So while the RIAA has a point that CD prices would be a lot more today if prices had kept up with the rate of inflation instead of staying relatively stagnant they fail to take into account the fact that the entertainment market has radically changed since the CD was first introduced. Consumers have a hell of a lot more entertainment options than they had even 5 to 10 years ago and CD prices need to reflect that reality.
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.
Flawed economic argument (Score:3, Insightful)
If you've read the RIAA's argument, they are not arguing that the manufacturing costs have gone up. What they are arguing is the total cost has gone up. For them they are including things like marketing and labor costs which costs more today than in 1983. On the surface that seems like a reasonable argument but if you think about, it's BS.
Except for a few artists, most artists get the scraps left over after the record companies take their share. If anything the share for the artist has gone down in terms of absolute dollars as the record companies cry poverty.
I consider this the biggest lie. First of all, the record companies charge the artist for studio time if the artist uses their studios. This cost is not factored into their royalties. So if an artist has a contract stipulating he/she gets $1 an album, that does not include any studio costs yet. Some artists like TLC have claimed bankruptcy after high album sales because their studio costs exceeded their royalties. If the record companies say the price of the CD covers studio time then they are double dipping. Because of this reason and for more creative control, many artists build/use their own studios. For these artists, the studio cost to the record company is nothing because the studio costs are borne by the artist.
Yes marketing costs money but the subtext here is that the studios seem to admit the payola scheme.
Another case of double dipping. First, the tours are supported by ticket sales. Second, like studio time, concert tours are mostly funded by the artists themselves because they keep all the proceeds. There are tours funded by the record company but those are just another instrument to rip the artist off even more. The company makes more profit off them.
Taking the record companies argument, what is overlooked is not all CDs costs the same to the record company. Manufacturing costs might vary between 100K copies and 1 million but the difference is small comp
Re:Awesome (Score:5, Informative)
They figured out how to make them faster better cheaper. Have you seen Intel's R & D budget? Intel has figured you can make a profit in volume sales. Making lots of units at low prices can cover very high production costs. They spend lots on their product to improve the quality and value. I wish I could say the same for the RIAA who in the same time frame have not improved the number of minutes or tracks on a CD and reduced quality by over compression, loss of dynamic range, and technical problems with CD's that don't work and break things.
Q1 outlook 2007 for R & D for Intel;
Expenses (R&D plus MG&A): Between $2.6 billion and $2.7 billion. In addition, the company expects a first-quarter restructuring charge of approximately $50 million.
http://www.intel.com/intel/finance/bus_outlook.ht
If the RIAA kept up with Intel in the same time frame, they would have CD's out with the $33 price point, but would have to kept up with the times. The 8088 processor ran 4.77 Megahertz. Most current Prescott P4's run at 3,400 Megahertz (3.4 GHZ)
The 8088 had 49,000 transistors in 1978. The 286 had 134,000 transistors in 1982. The 386 had 275,000 in 1985. The 486 had 1.2 million in 1989. The pentium in 1993 had 3.1 million transistors.
Since we are looking at a time frame of "The RIAA 'Key Facts' page claims that based on the 1983 price of CDs, the 1996 price should have been $33.86." we can take the numbers from Intel's 1983 processor the 286 at 134,000 transistors and the 1996 Pentium processor at 3.1 million transistors. (Pentium II in developement at 7.5 million transistors released a year later in 1976)
In the same time frame the CD went from 8-12 tracks average to 8-12 tracks average. To keep up with technology like the computer, it would have had to go from about 10 tracks to about 300 tracks at about the same selling price. Napster almost reached that value.
Intel data gleaned from; PDF aleart.. http://www.intel.com/pressroom/kits/core2duo/pdf/
If Intel tried to continue selling 4.77 MHZ CPU chips today at adjusted for inflation prices, they too would have volume sales problems. Somebody wake up the RIAA and have them smell the coffee.