CDs Want To Be Free

Dotnaught writes: "An article that I wrote about a new music promotion service called fightcloud.com and CD pricing in general has just gone up on Salon. And heeding the advice of Dave Winer, I also posted the full transcript of the interview on my Web log, Lot 49, for those curious about what got left on the cutting room floor." Rather than complaining that Big Recording's CDs are overpriced, it sounds like this company is simply demonstrating that music (even on physical media) just don't have to cost that much.

Comments

NOT FREE.....

[tiwason]

ugg.. I hate advertising...

If I have to pay $4.95 for shipping and you are making $2.64 "profit" from that $4.95, how the hell is the $4.95 "for shipping"..??

$4.95 != Free

Re:NOT FREE.....

[JHromadka]

Now, repeat after me: That's not what costs $18 per CD! What costs $18 per CD is the audio engineer that was paid to mix the tracks in the studio where the music was recorded; the rental time for that studio space and hi quality recording, mixing and sampling equipment; the designer that was paid to create the artwork you see on the jewel-case inserts and on the CD face; ...

Um, then why do tapes cost half as much. All the mumbo jumbo you mentioned is in the prep costs. CDs cost less than $1 each to make; tapes cost more than that. Now if tapes cost $20 when CDs cost $18, then your theory would make sense.

Re:NOT FREE.....

[swillden]

And the massive screwjob doesn't stop there, not by far. Labels pay royalties on 90% of sales which assumes 10% breakage, a holdover from the vinyl days.

Actually breakage is a holdover from *shellac* days. A very long time ago, before vinyl was invented, records were made on shellac, which was very fragile. In the process of shipping a box of these shellac records to a retailer, inevitably a few would break. Since the record label didn't know how many would break, they just arbitrarily assumed that it would be around 10%. The record label gets paid for all of them, but they only pay the artist for 90% of them.

This deduction for breakage continued even when vinyl records, which are much more durable, were introduced, continued with 8 tracks, cassettes and now continues to be applied on CDs.

How many CDs do you think get broken in shipment?

It's a crock. OTOH, the labels will just say, "Well, yeah, but what really matters at the end of the day is that our books have to balance. If we didn't deduct all those things from the royalties, we'd just have to lower the artist's royalty percentage."

Whatever. It's an industry that is so rife with dishonesty and manipulation that they figure all of the lies wash out and leave them clean.

Hey, c'mon...

[vkg]

although calling something free and charging five bucks for it is kinda scummy, at least these folks are punching a hole through the perception that there's something expensive about producing a CD.

15 bucks is NOT reasonable, and was the price point initially agreed upon to finance the cost to convert to the new format (i.e. from vinyl). CDs were supposed to cost about eight bucks in stores.

Bad marketing choice

[proxima]

People hate hearing "free" when it means $4.95 shipping for something that's cheap to make and ship.

Instead, they should've said that the CDs were $4.95 with free shipping. Then we wouldn't feel like we're being lured in by "free", it'd just be a good deal.

It's just wording, I know, but it makes or breaks this company's "image".

Re:I guess the question to ask is....

[Binky The Oracle]

Assimilation would be the better of the two choices, although I don't think they'll do that either.

The majors have become less and less interested in artist development, and more and more interested in risk management. You need someone to wade through all the crap, and believe me, there's a whole lot of crap out there.

Labels are banks that loan money at really high interest rates. The benefit to the artist is that if you default on the loan (walk away from the deal or get dropped) there's not really any financial penalty - the label has taken all of the financial risk. You probably won't ever get another deal on any major, but you don't owe anybody any money. They've given you money in return for you signing away your copyrights, name, likeness, etc. For some people this is a good deal.

Unless you've been groomed by the Disney machine for stardom, you can't really even get a foot in the door unless you've already self-released at least one or two CDs, have an established fan base, and are more or less self-sufficient. An independent artist who has achieved this doesn't really need a label deal anymore unless they want a more widespread audience/fame and are willing to take a paycut (for 90% of them anyway) to get it.

So if there's a company willing to wade through the crap and can provide the labels with some hard numbers on sales, it makes the label's job that much easier and less risky. It also provides talented independents with a potentially good source of exposure and distribution which is, after the creation of quality works, probably the hardest part of any artist's job.

Remember that the majors no longer as interested in long-term sales as in increasing quarterly profits - they have stockholders and parent companies to keep happy, and let's face it - the majority of the top selling music today is disposable. There are a few standout tracks that might be popular 10 years from now, but those are getting fewer and farther between.

Assuming that this company can stay afloat, I think the majors will treat it as a semi-weeded flower bed. I know for a fact that mp3.com is surfed by several major A&R reps - think how happy they'll be if they can deal with a company that actually has some quality control going on.

The point of

[Asprin]

This is an absolutely, completely, totally ---[R0XX0RZ]--- Salon article. Why - because of outstanding analysis and information therein about RIAA price gouging? No. Because even though *we* are all aware of the problems with the RIAA's anti-p2p, pro-DRM positions, my wife isn't.

This article explains to HER that:

&gt $16 of the $18 she's spends on a CD is record company profit.

Prices on CDs should be going down, not up.

A $5 CD sold direct to the consumer makes almost double the profit for the artist.

The positions of the RIAA on P2P and DRM are likely motivated by greed, not survival.
In my view, it's a LOT more important *where* this article is than *what* it actually says.

I'd love to see a big name (Madonna, U2, N'Sync, etc.) use the net to direct-market a low cost original CD just to confirm for everyone that the RIAA is obsolete. Likely, however, it'll go the other way - one of these 'unknowns' is going to hit it big and promote the hell out of this approach.

Jack Scalfani is an idiot

[puppetman]

On the Web Log (lot 49), he said, "Here is the biggest mistake of them all: two good songs on a CD. How many times do we have that? Remember that girl who sang "Where Have All the Cowboys Gone"? Vaguely. She was a kind of folksy singer. That was the only good song on that CD."

That was Paula Cole, and for that albumn she got nominations for Best New Artist, Best Album of the Year, Best Pop Albumn, Record of the Year, Song of the Year, Best Female Pop Vocal Performance, and Producer of the Year.

If this guy didn't know that, how would you feel about his business acumen? And if his musical taste is that bad (Paula Cole's This Fire is one of my top 10 CDs of all time), then I don't want to listen to what ever else he's selling (Kid Rock ripoffs?).