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"If they would just lower the price of individual CDs, down to about $5, I'd buy about 2 a week."

Hmmm.... that'd mean selling into the channel for about $4... that $4 would have to pay for production, manufacturing, royalties, shipping, marketing, unsold inventory, and so on. Not going to happen -- selling at a loss is not a good long-term business strategy. I don't think we're going to get record company or record store employees to give up their salaries, so I wouldn't count on this happening.

"As it stands right now, most albums average $15-20. That's too much."

You're shopping in the wrong stores. The average price of a new CD is $12.95 and falling fast (an older report has a nice graph and some backround info).

"I think they would make up all the profits in sales if they just lowered the price to acceptable levels."

Those $12.95 CDs net between 15% and 25% margin for the retailers and, on average about 20% net margin for the record company. If your theory is correct, cutting those margins in half -- which would take the retail price to about $10 -- would more than double sales. I'm not entirely sure that would be the case... if I want a CD, a $3 delta isn't going to affect my purchase decision. That's about 30 minutes of work at a minimum-wage job.

"Remember when CDs first came out? Remember the cost of a vinyl album at the time ($7)? Remember the cost of a CD at the time($12-15)? Remember the music industries promise that CD costs would drop when they became popular?"

I remember CD prices being closer to $18 at launch in the early 80s, but we'll use your numbers. That $15 you remember paying in 1984 is $26 in today's dollars. The average price of a new CD is now south of $13, so that's a 50% price drop in the past 20 years. I only wish that all industries followed a similar trend -- that would mean that the average price of a new car would be less than $10,000 today!

The rest of your post was spot on, though.

"Who demands artists pay $20,000/hour for some "big name" producer to hit a few buttons in Pro Tools?"

Really? If I buy Pro Tools I'll be as good as Quincy Jones or Nile Rogers? I was always under the impression that musical talent was unevenly distributed, and took lots of work and practice. Would it also be accurate to say that buying an expensive C++ compiler will make me write code as good as the highest-paid professionsals? Likewise, are highly paid programmers not worth the money? If, say, the record companies are suckers for spending crazy money on talented producers, are companies like Google also being stupid when they do what it takes to recruit talented programmers?

"We want more reasonably priced music, but they won't give that to us, either."

Are you sure? Music prices are freefalling. Looks like they're making an effort.

"So why bother a paying user if your product is going to be pirated anyway? It's a battle you can't win; you might as well accept it as a price of doing buisness."

Accepting it is not the same as not taking measures to reduce it. Ask any retailer; they'll tell you that there's always going to be a certain amount of shoplifters, but rather than simply give up trying to fight it, retailers put anti-shoplifting measures into place. These, too, can bother paying users, but retailers have evidently done careful analysis to understand that it's worth the tradeoff. Case in point: Costco (or whatever your local club store is) has chosen the route of inspecting your reciept on the way out, rather than just simply giving up and "accepting" shoplifting. Perhaps Slashdot users know better, but I doubt it. It's a complex situation that cannot be resolved with simple bromides such as "piracy will happen, so give up on DRM."

"I also download a lot, even though i usually end up buying what i really like. I would buy a lot more, but the thing is, music/dvds and even books are still way too expensive. Why not lowering the price, knowing that you'll still make a profit? (no, i don't beleive $20 for a CD is reasonable)."

Huh? CDs haven't been $20 in years, and prices have been falling rapidly. The average price of a new CD dropped 4% last year, to $12.95. The record companies are way ahead of you on this one.

I've lost you on the "knowing you'll still make a profit" part, though. The record industry gets by with pretty shitty margins in general, and many CDs lose money.

"Maybe you should try actually talking to your esteemed clients, and suggesting to them that if, quoting the music industry as an example, they didn't want to make $8 of PURE PROFIT on a CD"

I'm not sure I understand you. Are you talking Australian dollars? In the US, CDs are sold into the channel for around $8 and are sold to the consumer for about $12.95. That $5 delta is used to pay for employees, keeping the lights on, etc. shrinkage and so on and is not "pure profit." More importantly, it's money the record company never sees.

Of the $8 that the record company gets for the CD, about two bucks goes to cost of manufacturing, a buck goes to royalties, and some goes to marketing, accural for returns (the record company eats the cost when the retailer returns it) and various other realities of selling something on the retail market. Even if sales, marketing and shipping were free, and no CDs ever got returned or damaged, you're still looking at a gross of about four or five bucks, which is, percentage-wise, about what Logitech makes on mice.

I'm guessing you're confusing gross profit with net profit, but as people who work in retail know, all that matters is the actual money you have left after paying for all the expenses. The term "pure profit" would more typically be applied to the net, and not the gross. Overall, the record industry gets by with pretty shitty net margins compared to most of the stuff that you buy. It's good to argue against unfair IP laws, but claiming that "record companies make too much selling CDs" is the wrong approach.

"(But, on a side note, if some of the music/software/movie vendors got off their high-horse and sold their product at a resonable rate, TONS more people would buy it. $20 for a CD? Hell now... Put it on a shelf for $5 or $10, there's going to be a higher number of purchases... Simple economics."

I'm not sure where you're getting $20... is that Australian or Canadian dollars? For what it's worth, the average price of a new CD is $12.95 in the US. That's 4% less than last year.

It's a given that the folks who run the industries whose goods you desire also understand simple economics. To wit, the demand curve and the necessity of making a profit. The latter would rule out your suggestion of selling for $5.00. In the meantime, if they can make more money by selling a CD for $12.95 than they can for $10, that's precisely what they'll do. That might cause some people to opt out of buying it, or pirate it instead, but the most important thing to understand about the demand curve is that most of the time, you use it not to find the price that will sell the most units, but which will make you the most money.

Also, it's important to understand that if a company or individual clearly doesn't understand "simple economics" and prices something higher than you'd prefer, this is not a moral free ride to pirate the work.