September 04, 2003
CHEAPER CDs....Universal Music has decided to cut the price of its CDs by about 25% in an attempt to discourage music downloading. Hmmm....
Is this a sign of things to come, or an admission of desperation from a flailing company? Stay tuned.
Posted by Kevin Drum at September 4, 2003 08:57 AM
Well, if they'd cut 25% of the sucking out of their music, I'd be 25% more likely to listen to that kind of music.
Since the price of cds has increased far beyond inflation, in inflation-adjusted dollars this puts them back at what, 1996?
This is way, way too late. If they had been reasonable all along the
allure of Kazaa et. al. would not be so great. But charging $18 for a
CD that costs 10 cents to make doesn't get people on your good side.
After 15 years of gouging, lowering prices marginally is just not going
to cut it. Bastards deserve what they get. Their business model was/is
And worse, charging $18 for a CD which, if you're lucky, contains 4 good songs out of 10-15 songs.
I think it's desperation. It's over. They are screwed, plain and simple.
Predictions that a piece of technology will destroy an industry
usually don't come true. The photocopier didn't destroy the publishing
industry becuase it's too much trouble to stand over the copy machine
for 45 minutes and copy all 200 pages when can just buy the book for
But this is different. Copying music is so much easier. All it takes is one click of a mouse.
Selling songs for $0.99 each, like Apple is doing, seems like a good
idea. I'll pay for them, but that's becuase I understand that people
need to make a living, and I also don't like to steal. But if I were a
teenager, I'd be stealing like crazy.
They're going to have to find another way to make money. Promotions,
merchandise, concerts -- whatever. But as far as CD's go, they're
It's both. And probably the beginning of a two-pronged process.
One, find a price consumers will live with. Two, find the level of
legal threat that will stop folks from stealing music.
And while they're certainly bastards, I disagree re Kaaza et al. If
you can get something for free while sitting on your butt in front of a
computer, what is the incentive to leave home and buy it at any price?
Cool cover art? Which brings us back to the two-pronged process.
Well here's a quick and fun solution: Back to Vinyl!!
In a related move, teenagers across the country sharing music for free have also decided to reduce fees 25%.
It's my understanding that artists get around $1 for each CD sold.
Most of their income is derived from touring and merchandise sales.
Did anyone else catch the story on NPR this morning about the firm
that tracks down individuals sharing copyrighted material? They send a
warning, and if that is ignored they do something legal (sorry to be
vague; I must have been making a lefthand turn during that part of the
Possibly the carrot (99 cent downloads instead of $18 CDs) and the stick (you really might get caught) will save the industry.
Yep-the NPR thing was interesting.
I would think reducing prices would help increase the sales of their
CDs at the expense of their competitors, presuming they don't follow
suit. But 25% off of something is still more than "free," so I can't
see how it would have any impact on piracy.
"Well, if they'd cut 25% of the sucking out of their music, I'd be
25% more likely to listen to that kind of music." Said Squiddy.
Of course I have to disclose that I am over 30 and married. So maybe I just no longer know what good music is.
I would like to see how Universal is actually implementing that price
change, because retailers (like Walmart) actually have enormous sway
over the price of a CD. That's why 1) any CD you can buy at Walmart or
Tower Records, you can buy at Best Buy for much cheaper, and 2)
independent record stores actually charge as much or more than big
chains, because they stock music that is not guaranteed to sell by the
One of my favorite record labels, Dischord, puts the price at which
you can buy the CD directly from the label (including postage) on every
CD; the price is usually around eight or nine bucks. But you imagine
the price once it reaches Tower Records.
It's a weird decision to make on the eve of a giant merger.
what is the incentive to leave home and buy it at any price?
Besides added extras, time, basically. Lacking a high-speed
connection or the patience to download, some listeners will always just
decide buying is easier.
Back to Vinyl!!
12" and 7" records are still big in the various dance music/DJ
subgenres while audiophile pressings seem to be becoming more popular
among the rock/indie set. It could happen. More likely a vinyl
resurgence will just be one more thing CDs have to compete with. That
might contribute to lower CD prices. My guess is that in the future
we'll see a wider range of prices for all CDs.
Peregrine: no, Universal Music isn't part of the merger talks.
Vivendi is holding onto them for the moment, apparently because their
valuation is so low that they can't get much for them.
I agree with Mitch that it's way too late.
And kgill, you're not too old to know what good music is. I'm
significantly over 30 and stopped listening to current music after Alice
I listen to Buddy Guy and Paul Butterfield these days. The wretch factor in current music isn't worth a 99% reduced CD.
Well...I'm pretty ambiguous about it. CDs have always cost less to
produce than tapes, so the prices have always been artificially
inflated. By how much I'm not qualified to say, but it should have been
presumed inevitable that as the technology got even cheaper, the prices
would come down.
The industry earned a lot of ill will by keeping them up, and pushing
them higher, at a time when media-savvy consumers were learning
first-hand how inexpensive materials and replication were. Whether or
not it's fair or true, most people with a $100 CD-RW have a hard time
understanding why a disc and case available to them in bulk at Wal-Mart
for $.10 and burned with $.02 worth of electric power, outfitted with a
sleeve on glossy paper that would cost $.40 to produce at home, could
end up costing $18.99 in a retail store.
It's my understanding that artists get around $1 for each CD
sold. Most of their income is derived from touring and merchandise
This is true to a point, although there are other people who have to be
paid out of the CD cost as well - producers, graphic artists, copy
writers/editors, etc. Still, the profit margin on CDs is insanely high.
A nice pie graph breaking down where the money goes.
Yes, but they only have to be paid once. Mass-production is supposed
to be cheaper than handicraft. If I can make the CD at home for $.75,
and I threw in $5 to go to the artists for original material, $2 to go
to the graphic designers for the sleeves, posters and ads, $2 to for the
studio technicians, $1 for promotion, another $1 for equipment and
materials overhead (which is outrageous, but hey!), and a full whopping
$2 markup for the studio, I'm still at $13.75.
CD sales of top 10 artists have dropped 50% since 2000. While
musicians make money on tours and merch, the Music Industry itself
relies on the sale of product, i.e. CD's. A 50% drop in sales will
prompt any industry to lower prices.
Yes, but they only have to be paid once. Mass-production is supposed to be cheaper than handicraft.
True, but they have to be paid regardless of whether or not the CD sells
a copy. This isn't a problem for Britney CDs, but it might be a
problem for Joe BluesSinger CDs.
The point? CD profit margins are high, but there's more expenses
involved than most people realize. And the big sellers partially make up
for flyers taken on unknown talent.
The answer to the indusry's woes is simple - learn to do more with
less. This is a monster of their own creation. Stop signing Mariah Carey
to $100 million contracts. Recruit talent over hype. Substance over
style. And get back to developing artists' careers. It took a long time
for Neil Young to sell a million units.
It seems from figures recently released in the UK that a price
cutting has stimulated demand for albums (though the market for singles
has collapsed completely). I don't know how applicable this is to the
US as Apple's store isn't available in the UK and I think there's a
lower penetration of broadband internet connections in the UK (35%
currently in US - UK predicted to get to 35% in 2008!).
Yes, but another factor should be that unit sales are not the only
profit source for the studios on the original material. Studio
royalties, merchandising...a popular CD is an advertisement for the
studio itself and everything else it produces.
Many music studios are members of giant media conglomerates. There
is little to no 'outsourcing'...all marketing, merchandising, production
and management are performed in-house by sister companies. So in some
cases it's as if the studio were saying 'I need an extra $.20 per disc
to pay myself for translating the sleeve into Spanish, and the
distributor, who is me, is marking up shipments to the East Coast by
20%...what can I do?' All the profit margins end up in the same hands
eventually, so creating them is inherently dishonest.
This is only the start. DVD 'sharing' has already begun.
Actually, as I understand it, Universal is about to be thrown out of
OPRC (Organization of Price-gouging Record Companies) for failing to
leverage their monopoly.
I don't want to get into a flame war with Yuda, but the numbers
provided are in his/her previous post are, frankly, absurd. If record
companies were giving $5 to artists, no one would be whining about
prices. But they aren't, not even close. $2-3 is one hell of a deal, and
the notion that the sleeve designers and writers who do liner copy
would get $2 to split is beyond absurd. These people are probably
freelancing, and their income is marginal.
I won't argue with the home production cost of 75¢, but what does
that have to do with mass production? Any recording company that can't
produce a CD with art, liner notes and jewel case for under $1 is
$10 retail is probably a fair price. Wholesale? Still way too high.
The recording industry has forced consumers to pay for the legendary
lifestyles of their coke-snorting executives and pampered no-talent
stars whose vapid releases crowd musically noteworthy offerings off the
Nothing about the recording industry makes sense, especially their pricing policies.
That analogy was mine, and it was purely theoretical. I'm aware that
in reality artists get $1 or less per unit sold, but if I were
producing CDs in my living room I'd want to offer them more than
that...and the people buying the CDs would probably prefer to pay them
more than that as well, if they had a choice.
Yuda, the guy you're flaming, actually posted a link to a site that
had a pie-chart based on industry statistics showing the pure profit
margin on each CD, between the retailer and the studio, to be about
50%...and the artist royalty was the smallest slice.
Well, it's not too little, too late for me because "too little"
suggests that there's some further amount that would be sufficient, and
that's no longer the case for me. It's simply too late.
About 1999 or so, something like this probably would have encouraged
me to buy more CDs. But the fact that I haven't bought a major label CD
in the last three years has nothing to do with pricing and everything
to do with the record companies' behavior.
Now, even if they managed to cut CD prices below the actual cost of
production (what, price them in mills?) it wouldn't be enough to get me
to buy from them.
I'm not downloading their stuff for free, mind you. I've simply
stopped listening to it. I get my music from independent sources,
typically direct from the artists through CDBaby.com. The music's
actually better and nobody's trying to cripple the Internet so they can
keep on screwing me.
Bottom line is, as far as I'm concerned, RIAA member companies simply do not exist, and never will again.
And I didn't mean to be ambiguous about my [i]ambivalence[/i] earlier.
Whew. An edit function would be really, really nice.
One bit of a pricing reality check for the music industry might be
for them to compare their product with another entertainment offering
that comes on a disk - movie DVD's.
The DVD has up to 3 hours of high-quality digital sound, plus a
similar quantity of full-motion digital video, including special
effects, editing, name stars and extras (commentary, deleted scenes
etc.). The content comes on a shiny disk nicely packaged with full color
graphics. Price: $10 to $20, depending on how hot the movie is.
An audio CD has up to 80 minutes of high-quality digital sound, on a
shiny disk nicely packaged with full color graphics. Price: $18.
Music sharing isn't the problem. CD distributors are competing with
DVD's mainly. People that bought a CD every payday are now buying a DVD.
DVD sales have skyrocketed, and the DVD player is one of the most
successful media products ever produced.
As long as DVD prices stay around where they are, with a fair amount
of discounting keeping new releases around $18-19 and older releases
$10-15, I don't think anyone has to worry about DVD sharing (although I
have been known to check out DVD's from my public library for nothing).
The music industry wants to force us to keep buying buggy whips long
after the invention of the automobile. It just ain't gonna work.
99 cent songs won't work for me, either. Why should I pay full price
for a compressed track I have to burn onto a cd myself? Try 25 cents.
Then I might be convinced.
I think a lot of this "price gouging" has to do with the target
market for most CDs. Kids and teenagers who do not understand the
postponement of satisfaction. You can walk into any major retailer and
find 20 to 30 movies (DVDs) priced at around 5-6 dollars a pop. Another
50-60 priced at 10-11 dollars a pop and most movies priced in the 15-20
range. However, these movies have already gouged the teens at the
silver screen by charging them 8-9 bucks...the second time around on
DVDs they are trying to sell to their parents who are more price
sensitive and do not consider most music as must have and pretty much
any movie as "must see". We see this in a variety of other things to a
lesser degree (clothes, shoes...)
Not that any of it makes it "fair".
Anyway, it is interesting that music piracy happens in their most
important market...hence demanding a response from the music industry.
Why is this idea so prevalent that big labels will do better by
stocking "quality" music over schlock? Major lables, when they produce
schlock like Britney Spears, are basically engaging in high-risk
gambling: While they could take on quality artists--say ten, with a
guaranteed move of about 100,000 units for each at a reasonable profit
per unit, it's a much better deal to put out one artist who moves 10
million, even if your other nine artists sink, because you're moving
each unit at an insane price.
The real trick to it is that this high-risk gambling is actually no-risk gambling, due to a complex structure established between record companies and radio stations. A major label pays an indie, who then promotes a single to a radio station. A single only gets to the radio through an indie, and only through indies do single get to the radio.
If pop music fans are basically indiscriminate, and I'd say that's
pretty true, then a major label can pay its star's way to the top of the
charts. The real instigator of CD price inflation was the death of the
Because your analogy is apt...it's like high-stakes gambling. If the
gamble fails, the studio has to make up the tens to hundreds of
millions it wasted on one artist by increasing profits, and prices,
elsewhere. Usually on other high-stake gambles, which could then
There are people who day-trade on the market, and there are people
who buy blue-chip and wait it out for a couple of decades. You don't
see as many blue-chip investors jumping out of high-rise office windows.
Your observation about pop fans and the degree of control the music
industry has over demand may be somewhat true, but the public is fickle, and I can think of half a dozen major label failures in the last year alone off the top of my head.
They can put it out there, they can make sure it's the only thing
getting broadcast on the radio, but they can't force the public to buy
Has anyone noticed that DVD's are ridiculously overpriced? :)
If the gamble fails, the studio has to make up the tens to
hundreds of millions it wasted on one artist by increasing profits, and
theperegrine, I'm with you hear. Major labels gamble on the big stars they put forth and
sell all the units they move by all their artists at really high
prices, so even a big failure isn't ruinous like true high-risk
I think that the labels and Big Music (Clear Channel, retailers) have
come up with a system that nearly guarantees that big successes are
sure to come from the big labels' table, even if all the big labels'
hands don't turn into stars.
Oops! "Here," not "hear"!
As long as DVD prices stay around where they are, with a fair
amount of discounting keeping new releases around $18-19 and older
releases $10-15, I don't think anyone has to worry about DVD sharing
The sharing of high-quality, movie-length video over the internet
isn't really feasible yet because of the multi-gigabyte file sizes
involved and the relative slowness of even broadband connections. But 5
years from now it may be common.
And there's already a product that makes perfect DVD copies, and that the MPAA seems to be rather worried about.
I remember the transition from LPs to CDs.
At the time I was very annoyed that vinyl albums that cost $7 were selling for $15 in CD form.
For the first two years I heard the 'explanation' was the fact that
CD production was 'ramping up' (oh there are only a few plants in
Germany and Japan that produce these 'exotic' CDs).
But then I noticed that the price never came down.
Payback is a ...
It doesn't seem to have occurred to the RIAA, etc., that maybe the
economy might have something to do with people not buying CDs? Like
people might want to buy a few meals instead of that shiny new disc from
I haven't read through so maybe somebody has said this already but if
they had done this a couple years ago it would have worked. And more
I used to work as a graphic designer doing CD covers. I sure never
got a cent of royalties, I just got paid by the hour, and after my low
salary and 60-80 hour weeks, I finally figured I was making less than
minimum wage. So I quit that job. But one thing I noticed, the more
money spent on CD cover production costs, the more the music sucked.
Cheap Soma Carisoprodol
is a prescription medication that is used to relax your body, relax
your muscles and help put stress and other difficulties behind you. Online Soma
is now available online with a prescription. You can obtain a
prescription online by answering a short questionnaire about your
medical history Buy Soma or visit http://www.top-soma.com.
Online Xenical, Xenical is one of the most prescribed treatments for weight loss in the world. cheap Xenical
is used with a reduced-calorie diet to help significantly overweight
persons lose weight. It also helps to prevent regaining weight
previously lost. Orlistat works by blocking some of the fat normally
digested by the intestine. Buy Xenical Now or visit this site: http://www.x-xenical.com!
hydrocodone, buy hydrocodone, buy and hydrocodone, hydrocodone with apap, hydrocodone online, buy hydrocodone online, hydrocodone without prescription, hydrocodone no prescription, purchase hydrocodone, order hyrdrocodone, cheap hydrocodone
Slots, Poker and other all-time favorite games delivered by top-notch
software at only trusted and certified casinos. A comprehensive online bingo and unique casino games portal. Select your game with the best bonuses and payouts! http://www.i-online-bingo.com
With today’s low mortgage rates, many people are finding that owning a home is often as affordable as renting.Check home mortgage. If you have the funds for mortgage loan saved up to put together a downpayment as well as cover off various closing costs, then the ability to afford monthly mortgage online, property tax, insurance and utility payments, then home ownership is a great way to build up equity over time.http://www.i-mortgage-online.com
All Online Casino Gambling sites chosen & recommended here at Online Casino have been thoroughly tested by us for fairness, reliability, online casino game
play realism, casino payout percentages, game speed, and bonuses. We
have tested hundreds of casino sites ourselves in an effort to bring you
the very best online casino promotions. The following is a small
sampling of internet casino - only the best from Online Casino Rewards. http://www.666-casino.com
Whether you have a rigid poker
strategy in mind before you hit the table or whether you play it by
ear, having a strong foundation of poker knowledge is important to every
player. If you know and understand something about this game (video poker, strip poker, online poker )that your opponent does not, you will play a better game. http://www.888-online-poker.com
Credit, debt and loan
are all different words that boil down to the same thing: borrowing
money from someone with a promise to pay it back, usually with
interest. Personal loan allow you to borrow a fixed amount and then pay it back according to a fixed schedule. The same is for car loan, home loan, auto loan and college loan.Sometimes
a loan will require collateral, which is basically property or assets
that you promise to give the lender in the event that you are unable to
repay the loan. Often, borrowers use personal online loan to pay for big purchases. http://www.i-loan-online.com
We offer online personals ads services for dating singles with many free services such as: anonymous dating email addresses, relationship advice for marriage, dating or singles, personal ads posting, match, and many more free online Dating Singles Personals: Personal ad Services... for all men and women. Our Dating
Singles Personals site is more than those matchmaker, marriage, pen
pals or photo match personal ads sites; we're much more! Want more than
the strictly dating service, online personal ads and matchmaker dating singles sites? Then. http://www.dating-service-dating.com
Our best online gambling
review pages will surpass all your expectations offering the best
online casino sites on the web. Look no further, whether it's online
sports betting, progressive poker, free games, flash downloads or fast
casino downloads, we have the best online gambling reviews to meet anyone's needs. Looking for online gambling news? you'll find everything in once place including online gambling online tips, reviews and promotions. http://www.666-gambling.com
valium, buy valium, valium online, buy valium online, valium information, cheap valium, order valium online, valium diazepam, valium xanax, generic valium, online pharmacy valium, overnight valium, prescription valium, order valium, buy cheap valium
Visit http://www.cheapdrugpharmacy.com/morphine_sulfate.htm to buy
morphine, morphine, morphine sulfate, morphine sulphate, drug morphine,
morphine addiction, morphine pump, effect morphine side, morphine
picture, morphine pill, morphine patch, effects morphine, morphine
prescription, buy morphine online, morphine tab, morphine no
prescription, buy morphine no prescription
Fuck you all, fuck my siter and all online poker this is the case.
Whether you have a rigid online poker strategy in mind before you hit the table or whether you play it.
Gambling sites chosen recommended here at Online Casino have been thoroughly tested by us for fairness, reliability!
A comprehensive online bingo and unique casino games portal.
news all aroung the world online poker try it for free that right.
Best regards from the casino played
texas holdem be all the way near!
But the increased number of online bingo cards was exactly what was needed to make.
Surely not a chance for you but online poker nevertheless try this.
why play it as you can online bingo feel free with this opportunity.
Online, trust our 24hr live support security, and
the best online black jack casino games on the Internet.
xanax, buy xanax, xanax online, xanax information, xanax xr, buy xanax online, generic xanax, xanax bar, alprazolam xanax, cheap xanax, xanax prescription, xanax online pharmacy, online prescription xanax, xanax medication, order xanax, xanax drug, 2mg xanax, xanax for sale, xanax on line, cheap online xanax, purchase xanax
Nice site. Keep up the good work. Bryian