Price of CD's

[LaklandBass]

So I was doing some thinking..... CD's cost too much from alot of labels and I dont understand why they dont see that this is the root of the illegal downloading that they hate so much.
Heres my example....
Why is it that I can go buy a Justin Timberlake cd for $9.99 after it cost TONS of money to record and produce not to mention all of the advertising.
Yet when I go to pick up a Metal cd from a smallish label (victory, metalblade, century media) I pay $13.99 even thought the budget for the recording combined with all advertising cost less than a Honda Civic? Im paying more and getting a garbage recording to show for it.

Now before people start yelling at me Ill say that I definitely understand that the smaller label doesnt sell as much yadda yadda yadda but why should I have to pay for their lack of success in running a label? Thats like me making sub par basses and charging $9,000 each. Ill just tell people "hey, im not good at it and they dont sound too good so I sell less basses which means that I have to make up the money somewhere."


I just think that people would download music less if cds werent so overpriced. If I could grab cds at bestbuy for $7.99 Id pick up 10-15 a month. At the current rate I buy about 4 a year. Now as far as downloads Ive probably downloaded about 4,500 songs. When a new album comes out Ill download it to see if its any good. If its actually a good album rather than 2 decent songs and 10 B sides Ill consider buying it.... only if the recording is worth paying money for. I didnt spend thousands on 2 channel stereo system so I can listen to $14 cds that were recorded in some potheads basement. If the cd and/or recording sucks??? I delete it.

Cd's have been out for over a quarter of a century and recording costs have dropped big time in the last ten years. Why on earth are cd's priced at what they are? I of course support artists getting paid but this is doing nothing but adding fuel to the download fire.

Theres alot of intelligent and experienced people on this forum so I'm curious to hear what you have to say.

[tycobb73]

All the non business people in the world think that you price something by taking what it costs you and adding a certain amount of profit to it. That is not how it works. If someone thinks he can sell his CD for $13 he's going to do it. Even if it costs him $1 to make it. Do you think that manufacturing costs for Rics went up as fast as their price increases? Supply and demand.

An organization that I was a consultant for had a client who was selling pens for $2 and made a good profit. But they weren't selling very good. The problem was who is going to give a $2 pen as a gift. So we told him to raise the price to $10. He sold more pens at $10 than when they were $2 because people started giving them as gifts.

[LaklandBass]

You raise a valid point but Im not sure the pen analogy works. Ive never known anybody to associate musical quality with price. For many other things this is true though so you do have a good point.
I absolutely agree that people will charge whatever they can sell them for. However alot of these bands sell less than 20,000 units worldwide yet they are flooding the download sites so obviously they cant get away with what they charge.

[bass_living]

I feel the same exact way as you, Lakland, but there are going to be a whole lot of people within the music industry who will disagree or find a way to turn your argument against you, because it will be within their best interest to do so. I'm in favor of the music industry developing more realistic pricing & methods to regain those customers fed up with the cost-prohibitive nature of things, though it is unlikely to happen unless as a last resort. Businesses are made of people, and people have their pride, you know? Doing things to better suit the customer would be like saying "we were wrong, you were right", the likes of which calls for humility.

[ChrisBowsman]

You'd go from spending approx $60 a year to $860-1440 because the price dropped $6 per unit?

When I first started buying cds 16 or 17 years ago, they were $15-20. A few years down the line, Best Buy opened up, and the price shifted down to $12-15, with sales often being $10 or less. I don't really use a cd player anymore, but I have ripped lots of those $10-20 cds, and still listen regularly.

One of the first cds I bought was the Chili Peppers's "Blood Sugar Sex Magik." I've listened to it (or the ripped mp3s) hundreds upon hundreds of times. It's pretty safe to say I'll be enjoying that album the rest of my life. Looking at it that way, I'd say I got a lot out of that $20.

Here's another way of looking at it... instead of buying a bunch of cds, focus on buying one or two that are awesome. You could also buy them used.

[jerry]

CDs are overpriced, the recording industry could have saved it's self 15 years ago by selling CDs at a more realistic price point. Even downloads are over priced considering how much money actually makes it back to the artist.

[Joey3313]

Originally Posted by LaklandBass

So I was doing some thinking..... CD's cost too much from alot of labels and I dont understand why they dont see that this is the root of the illegal downloading that they hate so much.
Heres my example....
Why is it that I can go buy a Justin Timberlake cd for $9.99 after it cost TONS of money to record and produce not to mention all of the advertising.
Yet when I go to pick up a Metal cd from a smallish label (victory, metalblade, century media) I pay $13.99 even thought the budget for the recording combined with all advertising cost less than a Honda Civic? Im paying more and getting a garbage recording to show for it.

Now before people start yelling at me Ill say that I definitely understand that the smaller label doesnt sell as much yadda yadda yadda but why should I have to pay for their lack of success in running a label? Thats like me making sub par basses and charging $9,000 each. Ill just tell people "hey, im not good at it and they dont sound too good so I sell less basses which means that I have to make up the money somewhere."

Flawed analogy. It implies that the labels are setting the price for the CDs and not retailers.

[ryco]

I used to work in a chain record store warehouse when CDs first came out.

Part of the appeal of bringing in music on CD was a) it was a better storage medium (no scratches) and b) it would bring down the price of recordings because they were so cheap to produce. It cost about a buck to produce a vinyl record, $1.50 to produce a tape cassette (all the moving parts + tape) and 25¢ to produce a disc.

CDs were introduced at around $9.99 - $12.99 retail with the idea the price would go down as more ppl bought 'em. The record stores figured the price would finally settle right around $7.99 - $10.99. Instead ppl flocked and started buying the things in droves, so major labels started raising the prices for the big sellers at $14.99, and then the REALLY popular artists (Beatles, Elton, Queen) sold at $16.99.

If ppl would have been patient and not had to have "the next big thing" immediately, the prices *might* not have risen so high and fast. PPl immediately started backfilling their catalog buying them by the shopping cart load.

That's just kinda my viewpoint watching as it happened.

The labels/sellers do have price lists they send out with their product. The retail store usually adds about a $1.50± on top of that. This was in the late 80s/early 90s.

[jerry]

Originally Posted by ryco

I used to work in a chain record store warehouse when CDs first came out.

Part of the appeal of bringing in music on CD was a) it was a better storage medium (no scratches) and b) it would bring down the price of recordings because they were so cheap to produce. It cost about a buck to produce a vinyl record, $1.50 to produce a tape cassette (all the moving parts + tape) and 25¢ to produce a disc.

CDs were introduced at around $9.99 - $12.99 retail with the idea the price would go down as more ppl bought 'em. The record stores figured the price would finally settle right around $7.99 - $10.99. Instead ppl flocked and started buying the things in droves, so major labels started raising the prices for the big sellers at $14.99, and then the REALLY popular artists (Beatles, Elton, Queen) sold at $16.99.

If ppl would have been patient and not had to have "the next big thing" immediately, the prices *might* not have risen so high and fast. PPl immediately started backfilling their catalog buying them by the shopping cart load.

That's just kinda my viewpoint watching as it happened.

The labels/sellers do have price lists they send out with their product. The retail store usually adds about a $1.50± on top of that. This was in the late 80s/early 90s.

+1, The the smaller retailers were not to blame, there was never much markup in the product for them. One of the reasons it was so hard for indi-record shops, was the box stores started selling CDs at loss-leader prices. The down-fall of the record industry also coincides with the loss of real music loving label heads like Mo Ostin to lawyers and accounts who could care less about the music. These are the same kind of people who blew a trillion dollar-plus hole in our economy, American greed at it's finest!

[ChrisBowsman]

Didn't Best Buy get in trouble a few years ago for selling below the minimum pricing? It seems like their prices were crazy low for a few years, then kinda came back to what everybody else charges.

[OtterOnBass]

So high prices are enough reason to steal?

[Jim Campbell]

Originally Posted by LaklandBass

So I was doing some thinking..... CD's cost too much from alot of labels and I dont understand why they dont see that this is the root of the illegal downloading that they hate so much.
Heres my example....
Why is it that I can go buy a Justin Timberlake cd for $9.99 after it cost TONS of money to record and produce not to mention all of the advertising.
Yet when I go to pick up a Metal cd from a smallish label (victory, metalblade, century media) I pay $13.99 even thought the budget for the recording combined with all advertising cost less than a Honda Civic? Im paying more and getting a garbage recording to show for it.

Now before people start yelling at me Ill say that I definitely understand that the smaller label doesnt sell as much yadda yadda yadda but why should I have to pay for their lack of success in running a label? Thats like me making sub par basses and charging $9,000 each. Ill just tell people "hey, im not good at it and they dont sound too good so I sell less basses which means that I have to make up the money somewhere."


I just think that people would download music less if cds werent so overpriced. If I could grab cds at bestbuy for $7.99 Id pick up 10-15 a month. At the current rate I buy about 4 a year. Now as far as downloads Ive probably downloaded about 4,500 songs. When a new album comes out Ill download it to see if its any good. If its actually a good album rather than 2 decent songs and 10 B sides Ill consider buying it.... only if the recording is worth paying money for. I didnt spend thousands on 2 channel stereo system so I can listen to $14 cds that were recorded in some potheads basement. If the cd and/or recording sucks??? I delete it.

Cd's have been out for over a quarter of a century and recording costs have dropped big time in the last ten years. Why on earth are cd's priced at what they are? I of course support artists getting paid but this is doing nothing but adding fuel to the download fire.

Theres alot of intelligent and experienced people on this forum so I'm curious to hear what you have to say.

back in the late sixties a record album was around 3-5 bucks or more.......cd''s don't seem that pricey......if you factor out the sound quality they seem like a bargain

[Valerus]

I like paying <$12 for CD's. Anything more...I'll pass on.

[ChrisBowsman]

Originally Posted by Jim Campbell

back in the late sixties a record album was around 3-5 bucks or more.......cd''s don't seem that pricey......if you factor out the sound quality they seem like a bargain

Can't forget to factor in inflation, as well. Have gas, cars, and houses roughly tripled in cost since then?

[Number27]

Originally Posted by ryco

CDs were introduced at around $9.99 - $12.99 retail with the idea the price would go down as more ppl bought 'em. The record stores figured the price would finally settle right around $7.99 - $10.99. Instead ppl flocked and started buying the things in droves, so major labels started raising the prices for the big sellers at $14.99, and then the REALLY popular artists (Beatles, Elton, Queen) sold at $16.99.

sounds like what happened when they rereleased the beatles catalog. first couple days the prices were ~$10 like everything else... after a week or two it was $16 a pop.

[tplyons]

The prices are set where they are because enough people are willing to pay that for it to be profitable for the label and the retailer. Just because it's set above where YOU want it, doesn't make it alright to get music without paying for it.

It simply is a matter of supply and demand. The big labels can afford to make less on each album and profit more, than a smaller label won't be selling as many copies. If a large label sells 100,000 copies of an album and only makes $0.10 apiece, the album would make $10,000. If the small label sells a similar album for a $1.00 markup and only sells 1,000 copies, that label would make merely $1,000 for that album.

The larger labels can sell an album for less as an economy of scale, whereas the smaller labels have to sell for more because they're selling fewer copies. Regardless, the labels COULD sell their albums for less in an attempt to curb illegal downloading, but the next cheapskate will still come along and download the album for free.

[LaklandBass]

[quote=tplyons;8275299][b]The prices are set where they are because enough people are willing to pay that for it to be profitable for the label and the retailer.



You sure about that? The sales numbers seem to state that fewer and fewer people are willing to pay for it. In all honesty free downloading probably benefits most bands. If I download a couple songs and get turned onto a new band Ill go see them in concert. Ill also buy a shirt or two while I'm there. If not for that intial download I would have never heard the band because Im not rolling the dice on a $14 metal cd.

[GregDunn]

When CDs were introduced in 1981-1982 (at least that's when they hit the stores locally) list prices were $18-20. If you look carefully at the "suggested" retail prices for CDs today, they're still around $18 and many of the larger retailers still mark that price on the disc in their stores. The fact that many places sell them for far less just confirms that the labels will sell them for whatever they can get away with. In a market where $18 CDs won't sell, either the prices mysteriously inch downward or the stores selling them for the inflated list price go out of business. I've seen it happen numerous times.

And yes, 25 cents is probably a reasonable estimate of the cost to press a CD back in the 80s, but it doesn't include the cost of getting it to the shelf. The packaging, artwork, distribution costs, etc. dwarfed the actual media cost. Even so, in the quantities pressed by most labels, the CD ready to sell used to be around a US dollar. And that was in the 80s. It was priced higher than LPs because who would believe it sounded better if it sold for less? Seriously, I've talked to retailers and distributors who said as much. And good luck trying to bring a price down dramatically once the consumers have gotten used to paying it.

Even though it's common to see CDs around here for $12-13 nowadays, the list price will probably never change - and that does give retailers the option to sell them for that amount.

[tycobb73]

Originally Posted by LaklandBass

You raise a valid point but Im not sure the pen analogy works. Ive never known anybody to associate musical quality with price. For many other things this is true though so you do have a good point.
I absolutely agree that people will charge whatever they can sell them for. However alot of these bands sell less than 20,000 units worldwide yet they are flooding the download sites so obviously they cant get away with what they charge.

My mother in law told me that Beetles records were more epxnesive than other records

[Pilgrim]

I recognize that CDs have to pay for a variety of costs - but when they charge $12 or more for CDs of music from the 60's and 70's, they're undeniably overpriced. Those recordings were paid for decades ago, and they are not actively marketed. They could sell for half their current retail and still make money for the artist and the CD company.