Slashdot Mirror
Universal Music To Cut CD Prices
phlack writes "CNN Money has an article about Universal Music Group's plans to slash their CD prices to $12.98 SRP, in an effort to combat piracy and bring consumers back into stores. It makes me hope the other giants will follow suit, and wonder if the music industry is finally listening to some of the consumer's complaints."
So they are finally going to match their competitors (Best Buy, etc.) in CD prices? I still don't understand how those big chain stores, who charge $17.95 for a CD, stay in business. Maybe they should take a survey from their consumers, about what they're actually willing to pay for a CD. $12 is about the tops for me, and it better be darn good for that much money.
Most slashbots are probably familiar with price wars in computer hardware....perhaps we'll see some with regard to CD prices.
Would be an interesting situation where one could get an artist's release from two different labels, so there would be real competition between them.
If you can't see the value in jet powered ants you should turn in your nerd card. - Dunbal (464142)
You have already proven you wish to screw your customers at any given moment. You have been hostile to me, you know the guy that paid for your wares, for far too long.
I left and am not coming back.
(Manufacturer's) Suggested Retail Price. It reflects the price point that the manufacturer suggests the retailer offer to the end consumer, and includes the margin for that retailer.
The MSRP values are based on various fudges and calculations, with a good bit of over-the-thumb thrown in for good measure. In this age of Internet comparison shopping, I can't remember the last time I paid MSRP for any consumer goods (except software like PS2 games, where Sony has a very tight rein on the supply chain).
Come play at the only online poker room with a Mac-native client
It's not all the way. It *is* however a step in the right direction. A lot of people, myself included, would prefer to buy our music legitimatly. Buying a CD is still the easiest way to get high quality, consistant MP3s onto my iPod.
I'm thinking that the studios will absorb a lot of the difference and artists won't be too affected.
Cheers Koz
Concerts are an experience. They're usually *different* from the recorded/packaged music, which I used to think was a bad thing.
However, the true human aspect of the music comes out, and I don't just mean errors - I mean improvisation, expansion, performance.
The true value is not the *music*, it's the *artist*. And you're never going to truly appreciate that if you only listen to one expression of the talent, that is, a single CD.
I recommend checking out smaller concerts first. a) they're cheaper, and b) sometimes you get the CD to relive the concert (though it's never quite the same). When you play that CD you always end up expounding to all within earshot about "how much better they were live"
SYS 64738 NO CARRIER
I'd look at it a different way:
The fact that they can imperiously cut their prices by 30% pretty much proves that they've using onopoly pricing to begin with.
Free Software: Like love, it grows best when given away.
I've never been to a concert in my life and don't understand why I should care to
Let me help you. You may want to see a concert if you think you'd enjoy:
- the feeling of 'never stepping in the same stream twice' -- go see artist X every year for 5 years, and each performance of any given song will 1) be different than the CD version, 2) be different than the previous year, 3) be different than the previous night!
- hearing unscripted improvisation between artists -- many musicians claim that the set they're most proud of playing was NOT the one recorded in the studio for the CD
- the little live mistakes and recoveries of talented artists -- you'll rarely get that on a CD
- experiencing the energy of dozens or hundreds or thousands of like-minded people simultaneously grooving or interpreting or dancing or just chilling to the same music you love
- to experience the artist -- 16 bit stereo samples @ 44.1kHz captures audio quite well -- but it doesn't capture dance, facial expressions, stage antics, synchronized light/lasers/visual effects, costumes, etc.
Recorded music is here to stay, obviously, but live performance is different. It's not necessarily better. If you like any given artist though, it's enriching. More times than not, if I've appreciated an artist before going to see them live, the live experience made me respect them even more.
Some (not all) artists are multidimensional. CD is great for the car or bus or office, but CD doesn't do many artists the justice that live performance can. And of course, some artists suck live. Explore.
I'm talking about the majority here .. there will always be people who steal, but ....
In post-capitalist 17th century UK, people couldn't afford bread. Rather than storm the bakeries and steal the bread, they stormed the bakeries and demanded a fair price.
People are happy to pay a fair price. Thats the very definition of fair value. A value people will pay.
Between overpriced and free, people choose free. But when they sense that a fair price can be obtained, ie, when the bakers (ie, the RIAA) are actually willing to come to the table and discuss the price, people will choose fair price over free because we require our socialeconomic systems to exist in order to benifit from them.
If we can't benifit at all, we might as well get for free. When we can benifit, we're smart enough to support that system rather than torpedo it.
Its the survivalist instinct that makes us choose between not and all and illegally free, and the same instinct that makes us choose fair price over damaging suppliers by aquiring their goods in a way that will put them out of business.
"Old man yells at systemd"
OK, I admit it - I go into music stores once in a while. There's this song I like, and I don't really mind supporting the artist & other people who technically support the artist.
I've been buying CDs for the past 15 years or so. And before that I bought a whole bunch of LPs.
And there was always the $18 and the $12. I can say, with confidence, that I've never bought an $18 CD.
I'd always retract from the $18 CDs. Why does album XYZ deserve $6 a pop? It certainly isn't quality.
In contrast, I've never had a problem buying a $12 CD. Sometimes I buy a $12 CD on a whim. But $18? Never. No freakin' way. I'll just wait for radio airplay.
The only exception to my rule would be a multi-CD set. I can see paying $18 for a couple quality CDs.
And there we have it. From my sample of one person, $18 CDs simply don't sell. On the other hand, people readily buy $12 CDs, and they'll even buy them even if they're not 100% sure if it's something they'd like.
Universal has learned this. Maybe some others in the industry will learn this too. And do you know what? If the others don't go along, that's fine with me - I just won't be their customer.
At $18, I won't buy.
I don't pirate music.
So I won't listen.
The only real loss is to the aritst and the label.
Is there anything wrong with that?
-Ansel.
G=C800:5
Well, at least it's a step in the right direction. What they really need to do is offer free downloads of either full length, lower bit (less than 96kbit) MP3's or high quality, 30sec samples of every track in their catalog. Free downloads because good stuff can then be passed to friends. This is the past, present and future of advertising. Nothing works better than a suggestion by a friend or family member. This would be the ultimate way to get "Word of Mouth". What the "common Joe/Jane" want is to sample music. They usually buy stuff they like. The problem is there is so much music out there and the radio stations are all homogenous. People don't know what to buy. Given the cost of even these reduced priced CD's, it's still a tad expensive to experiment.
Hardcore file traders don't do much to the "content" producers' bottom lines. Some would never spend the money. Others may still buy some CD's from some new bands they found. Basically harcore file traders are zero sum since they provide some advertising (and therefore, new sales), while satisfying some people (loss of sales). Basically balances out.
So, we have the homogenization of the "free" classic media, an economic downturn, and a lack of major label backed new, innovative, interesting content. File trading is just a scape goat.
I don't download music as the quality is too low for me. I might buy more if there was a better way to sample music (like http://www.apple.com/music/store).
I would only buy from iTMS if there were less than 2 tracks on an album that I wanted because AAC quality is too low for me. I would buy if there weren't any CD-singles available. I rip my CD's into FLAC (http://flac.sourceforge.net/)
I don't download movies as the quality is too low for me. I have, however, sent trailers that I could download to people. At least the movie peole have their heads on straight by allowing people to download their trailers.
I download anime that is fansubbed and not available in the states, or to demo a series. I have bought entire series ($$$$ of dollars) because I was able to download and watch enough to get into it. I buy them because I want the higher quality video and audio. The fansubbers' subs destroy what can be done by the CC subbing built into set-top DVD players.
The music, movie, and software industries are idiots for funding the RIAA, MPAA, and BSA, respectively. These *A's are just trying to keep themselves relevant. They are cartels. They should be illegal as they form oligopolies (price fixing, collusion). They are hurting their respective industries by not allowing it to slowly evolve. M/G/S studios can do their own advertising directly to the people and save some $$$$$$$$. All they need is to allow downloading of samples from their catalogs and people will spend their own bandwidth advertising stuff they like.
Anthony
Some CDs have bonus tracks not available on cassette
How can this be?
The limit on a CD is there and abouts of 74min.
There is a limit on cassettes, store bought ones are sold sizes of 60min / 90 min / 120min with a few odd sizes inbetween. It's generally agreed that 120min cassettes are too thin to be reliable, 90 are common place. It's more practical to offer bonus tracks on cassette cause you can fit more stuff on them. I remember that "kiss me kiss me kiss me" from the cure for example included a bonus track that was not included on the cd because there just wasn't room on the CD. I think it was "hot hot hot" as I don't happen to have it handy at the moment.
The only reason to include bonus tracks on CDs and not cassettes is to encourage you to buy the CD rather then the cassette.
Artwork and notes CAN be included in a cassette with ease, though there usually is a reduction in size.
---
In computer world, legacy media *ususaly* costs MORE then modern media. While most people still have floppy drives, the release media of choice is still CD, even for data that would fit on a floppy. The demand is less there for less is produced. It would make more sence if cassettes cost more, acording to many they are after all more costly to reproduce. Cassettes are still popular with people who haven't bothered to upgrade their car decks, runners who find the cassettes don't skip, and a few others who haven't bothered to get a CD player. The market I believe to be small, so it makes little sence for them to flood the market with cassettes resulting in a need to lower their price in order to actually sell them.
There is no sanctuary. There is no sanctuary. SHUT UP! There is no shut up. There is no shut up.
Here's the reason.
Hypothetical: you purchase a popular mainstream CD at a store such as Best Buy.
You would pay about $12.99-$14.99 for this CD.
This CD almost certainly retails for either $17.98, $17.99, $18.98, $18.99, or $19.99.
Incidentally, Best Buy tends to make less that $0.75 per popular CD sold, and frequently less than $0.50 on the ones in their ad. They sell only items they believe they can make huge volume on, with the hopes of drawing you into their store so that they will buy their other products which have sane profit margins.
MSRP of $12.98 means a Best Buy price around $8.99 -$10.49
Additionally: cost is not $0.02/CD.
Cost works something like this:
Production: $0.03
Royalties to Musicians: $0.05
Royalties to Songwriter: $0.08
Retained by retail store (covers costs like distribution, plus profits) $3.00 - $4.00
And this does not include the cost of producing the very first CD, generally on the order of $10,000 - $100,000 (varies greatly depending on artist and what all is going on) Amortizing this across all copies sold (lets assume 500,000 -- a pretty good amount for one disc) means that cost is between $0.02 and $0.20
Note that the numbers for royalty per album sold were real numbers I got from folks inside the music industry, but that they are about a decade old. IIRC, they have increased slightly lately, so it might be $0.10 / $0.16 instead of $0.05 / $0.08.
Anyhow, the total minimum cost per disc is on the order of
$3.36 / disc.
I have left out many of the costs involved in the production, distribution, and marketing of music because I don't have any decent numbers, so I'd just be guessing.
Even if the other costs are forgotten, $3.36 / disc cost vs. $12.98 MSRP means a profit of:
286%
instead of:
435% for a $17.98 CD
In short, yes the music industry can afford this cut, and it was a good idea, but IT IS SIGNIFICANT
Like I said, expect to spend on the order of $8.99 - $10.49 per new CD you buy at the discount stores (from Universal anyway)
Expect others to follow suit.
In my opinion the "Best Price for an Album" -- as in, the price the CDs should retail for to maximize record label profits is $9.99.
This is because this allows price ranges in discount stores to be on the order of $7.00 - $7.99 and I think that this is the highest price that most people will be willing to spend and still buy every CD from most of the artists they like.
That's just my opinion though. I want to know, really, what do you all think the "Best Price for an Album is" remember, the idea for this number is to maximize RECORD LABEL profit (NOT sell the most music or decrease piracy the most, just make the label the most money)
What ever happened to the $9.99 sale price for new CD releases? I remember back in 1994 I could walk into a Circuit City (on a Friday in Tallahassee, FL) and get a new release for only $9.99 on sale.
And why is it that back in the 80's I could buy an album on cassette for around $7.99, but today I have to pay $18 for the same ammount of content on a CD? CDs are cheeper to manufacture than cassettes!
I'm sorry, but Universal is going to have to do better than $12.98 to get my hard earned money.
Funny. I would consider myself better off with $1.00 for someone buying my CD than I would be with $0.00 for somebody downloading it of Kazaa. (I would also probably be righteously annoyed if that somebody then had the gall to claim that he was helping me out.)
How can we continue to believe in a just universe and freedom to eat crackers if we have no ale?
4.95 may be hard to compare with 0.00, but I bet a lot of people would go back to CD's. P2P is cheap, but it takes time and bandwith. If you can find what you're looking for quickly, then it'll take you a LONG time to finally get the entire CD. For most people, the $5 wouldn't be too much, would be faster, and then you get the warm fuzzy feeling of being 100% legal.
Of course, ripping and then reselling the CD is a copyright violation.
Which we do care about, don't we?
- jon
Ganymede, a GPL'ed metadirectory for UNIX
too many musicians think that they are artists. The reality is that the vast majority of popular music is performed by those that would be more aptly called artisans than artists. Picasso was an artist, the guy down the street painting lettering and cartoons on a billboard is an artisan.
That reminds me of the boss who, in declining to give an employee a raise, says "Well, most of it would have been taken up by taxes anyway."
Of course, that's a poor excuse for declining a raise -- the employee would have seen some increase, after all. By the same token, even if artists aren't making as much as the labels per-CD, they're still making some amount.
Alex Bischoff
HTML/CSS coder for hire
Sure, most pop stuff is like this; but you've not looked -nearly- hard enough if you believe that. And, with a name containing "punk", you'd think you'd know about some of those indie bands (Or indie-bands-gone-mainstream) that are damn good. AFI, Stutterfly, System of a Down, or Millencolin anyone? How about Dashboard Confessional? Or how about The Offspring? Bright Eyes? Thursday? Glassjaw?
Not paying for -good- musician's music is a crime, both morally and legally. No matter how little of the money goes to that musician, they've worked hard for it. And they deserve to be paid it if you listen to it.
If it's cheap and mass produced, don't listen to it. If it's good, and you like it, then pay for it, enjoy it, and support the artists.
Complaining that it's cheap mass-produced advertising, and then listening to it is pure hypocritical bullshit. Why, may I ask, are you listening to it if it's so bad?
Yes, but their argument is that if you bankrupt the big 5, the artists will still exist, and can get a better deal with an "indy" label.
Not saying I agree with them, but that is how they managed to come up with "An artist is better off with $0 than with $1/cd"
Basically, what it comes down to is "I care enough about you to hurt you...but not enough to hurt me." If they REALLY cared, they would make a sacrifice themselves and NOT LISTEN TO THE MUSIC, rather than ONLY imposing a sacrifice on the artists.
Optimally, what you would want to do is download the songs, and then mail the artists a nice crisp $2 bill (Or coin, or whatever) along with a letter explaining WHY you are mailing them money. That way you get the music, the record company gets boycotted, AND the band makes money...more money than they would if you bought the CD.
ASCII stupid question, get a stupid ANSI
I guess $5 is a fine price for CDs where the artist is signed to a RIAA label that can afford to punch out 10,000 copies of said CD at pennies per disc. But for independant artists, it's a little different.
Let's just ignore the $5,000 to $10,000 investment in a home music recording studio, the $400 mastering fees, and just look at the actual CD manufacture. It costs $2.50 a CD to have Discmakers (http://www.discmakers.com) print up 1000 CDs in shiny plastic cases with professional full color 6 panel insert graphics and on CD printing. (And if you want quality CDs in any reasonable amount of time, you don't go with Joes Bargain CD Duplication.) I mail out 100 to radio stations around the country, with press kits, at an additional cost of about $2 per kit. I give away 25 to local DJs in clubs and my indie label gives away another 25 to a distro house, all for promotion. Now I'm down to 850 CDs that can actually be sold, and I'm out $2700.
Now assuming that I sell all of these myself and get 100% of the profit (I don't, but we'll keep this simple), I now need to sell 540 CDs at your ideal price of $5 each just to break even. This leaves 310 CDs which I can sell for a net profit of $1550.
$1550 for a years work writing 12 songs, performing them, recording them, mixing them down, and making them available to people on the widely available CD format, which most non-geeks use and enjoy. Can you see why no sane person who wants to eat or pay rent would ever charge so little for a CD?
And I've never once been contacted about being paid directly for MP3 or other downloadable copies of my songs. No one has ever offered some fair price for a non-CD version of my music. But plenty of people have told me that they downloaded my music off Kazaa or WinMX and thought it was pretty cool, thanks for writing it, but no I won't buy a CD, hey, why are you getting mad at me?
The RIAA, sure, they scam the artists who sign with them. But the little guys get screwed too.
I remember back in the day when LPs (aka vinyl) were common, cool stuff was included by the cool bands. The four KISS solos done in the 70's each had poster that were a part a larger one (I had all four). My "Face Dances" album had a cool poster. A band I bought a couple of LPs by called the Feederz, had full jacket sized double sided sheet with cool anarchistic cartoons and sayings. This just a few of the cool things that would come with LPS.
I don't see any of this with today's CDs. Of course I do understand the spatial problems with packaging, but the media companies need to give people an incentive to buy the CD rather than a monetary one. Entice the people into buying the CD so they can get a T-shirt, poster, or something else from the artist. Folks are going to choose free over any price if they can get the same thing.
Wow, somebody at Universal must have taken an introductory Economics course, learned about supply and demand curves, and realized you don't maximize your profits by continuously raising your price -- especially so on non-essential items like music!
"Freedom means freedom for everybody" -- Dick Cheney
What you are seeing is the normal life cycle of a monopoly. When the public gets mad the price goes down, for a while. Then the price goes back up. Usually even higher.
Consider the price of gas. Remember when you thought to yourself that if it went over a buck a gallon you'd stop driving and take a bus? People get upset, the price goes down, and then starts creeping up again.
If you have a capital market, ie not a monopoly, then the price stays down. There are what 7 major lables, and they cooperate on the price. It's a monopoly.
You can claim your tiny victories, but as soon as you buy one CD you've given the victory away. I buy maybe one cd a year (if that). (I don't fileshare either). Basically the whole system has turned me off, I now just play my own music, or listen to the radio.
Oddly enough, many employees think this as well, and I've known more than one person who turned down a small raise because they thought it would actually throw them "into the next tax bracket".
:)
Up here in the great cold north, higher tax brackets only apply to income ABOVE THAT BRACKET. It's not like the rest of your salary gets taxed higher because you got that $500 raise.
YMMV in other countries, of course
Endless arguments over trivial contradictions in books written by ignorant savages to explain thunder in the dark.
Yes, but when a CD is hugely successful, who reaps most of the profits, the band, or everyone else? (Hint, it's not the band). Who ends up paying for producing the CDs, marketing, promotion, expensive videos that MTV never plays and everything else? It gets recouped from the band before they see their royalties.
The risk costs is pushed onto the band, but the record co reaps most of the reward.
I'm not shedding any tears for artists. They signed the contracts of their own free will.
You could argue that, but unfortunately in most cases the recording contract is the ultimate prize, and it's an opportunity that doesn't come along everyday, so most of them will eagerly sign the contract. If they say no, they may never get another chance.
By reading this sig, you agree to the terms of my sig license.
RIAA does suck but for promotion you absolutely cannot top the work done by record companies. Justin Timberlake can barely hold a note and the only instrument he can probably play is the flesh flute, but, thanks to outstanding marketing the record industry turned him and a few other pseudo singers into a bankable megastars for a time. They put together the posters, the artwork, the image, the stadium tours, the album, the promotional tie ins, everything. An Indy company might appreciate your desire to avoid writing a song that could help go with a "Happy Meal", but, then again, they'd never give you the fat check for doing it.
Most of us who are developers have no problem selling out our sense of code purity to make deadlines and cash a check, and I suspect that if we each thought that writing even the shareware version of the Office PaperClip could make us a buck, we would.
So let's at least cut the artist some slack and not be so critical of the music industry that we drive it out of existence. Support the right of the artist to sell out and cash in, and hopefully, they'll make music that recognizes our own god given right to do the same.
This is my sig.