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."

Comments

It's about time

[mmoncur]

It's about time - CDs have been overpriced for years.

But when a large segment of the public is going to be comparing $12.98 with the $0.00 filesharing price, I have to wonder if it will have any effect at all.

I wonder what the artists think of this? This price reduction has to impact their bottom line...

Re:It's about time

[Magic Thread]

What's so good about concerts? I like to own music, so that I can play it whenever it is convenient. I hear this talk all the time about how artists should make money through concerts, but I've never been to a concert in my life and don't understand why I should care to. Micropayments are probably a better idea.

Re:It's about time

[nzkoz]

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.

Re:It's about time

[fewnorms]

"I wonder what the artists think of this? This price reduction has to impact their bottom line..."

Well, I guess they don't give a shit to be blunt. I really don't think this reduction is going to hit them at all. The only people that will be affected by this reduction will be the guys working for the record company, the people that package the CD's, the guys in the record shop that will get less for each CD sold, etc etc. Not the artists themselves. They probably have a contract with the record company stating that they recieve a specific amount per CD sold, so I think they couldn't care less...

Re:It's about time

[Magic Thread]

A lot of people, myself included, would prefer to buy our music legitimatly.

Even though you know artists are better off if you don't?

Re:It's about time

[MadChicken]

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"

Re:It's about time

[evil-osm]

I'm actually rather shocked that CD prices are that high in the US. In Canada CD prices range from ~$14.99 - $21.99 ($21.99 being those rare expensive collectors or double CD's). I thought that those prices were high.

I'd be *pissed* if I had to pay $26.20 ($18.98 USD) for a crummy CD.

Dropping the price to $12.98 is still ~$17.90 CAD, which is just brutal.

Now the question is, will they drop the prices in Canada as well? or have they just decided that they can afford to bring the prices down in the US to reflect the same prices in Canada and still gouge us at the register?

Re:It's about time

[b!arg]

I generally can't stand Courtney Love but she had a pretty good speech and quote about this whole thing: "How can pirates steal money from artists when the record companies have already stolen it all?"

Re:It's about time

[aardvarkjoe]

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.)

Re:It's about time

[jdhutchins]

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.

Re:It's about time

[abischof]

A lot of people, myself included, would prefer to buy our music legitimatly.

... Even though you know artists are better off if you don't?

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.

Re:It's about time

[canajin56]

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.

Re:It's about time

[ebayman]

A++++ POSTER WILL READ AGAIN.

Re:It's about time

[QuackQuack]

What Love fails to consider is how often a label advances a band $1 and presses cds for $500K, and doesn't get any of that money back because the band flopped.

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.

Re:It's about time

[unclebulgaria]

How would you propose that someone determine a country via their ip address only? The top level domain is no way to determine it, nor is address information on a whois query.

Think of AOL users in Europe for instance, they will appear as ?.aol.com, and the whois entry will match a US address.

And I really don't see someone forging a connection to the iTunes music store, being that they have to work entirely blind (could you imagine sending your credit card number over the net a hundred times if you had to get the sequence numbers right?, not to mention the near impossibility of fooling a machine with some security built into the tcp/ip stack, such as OpenBSD, some installs of Linux, perhaps FreeBSD (and OSX by virtue of that fact).

A proxy of some sort would be more viable the option by far. :)

As someone else said, Apple would just check the credit card details, as they are attatched to a bank account, it should be no problem to determine the residency of the owner.

Pricey

[Anonymous Coward]

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.

Re:Pricey

[hankaholic]

Best Buy can suck it.

Sometime during the late 90's I purchased a copy of Pink Floyd's "The Wall" album for around $20.

Over the weekend, I was in Best Buy hell (waiting with a friend while he attempted to buy a 50" DLP HDTV without being forced into buying a $400 power strip...) and wandered over to the CD racks, having since lost the copy of The Wall which I'd bought half a decade ago.

They wanted... $33.

Fuck that -- if it were $15, I'd have considered just caving and buying the damned thing again (it's a double album, and a bloody good one at that).

If CDs were $3-$5 apiece (especially older ones), I'd have a huge legal collection. As it is, I'd rather download the MP3s for songs I bought the right to listen to years ago than to spend $33 for physical media which was doubtlessly produced for less than $3 and which cost me $20 when I legally bought it before.

This is a start, but come on, folks -- tapes used to be cheaper than this, and they cost much more to produce. I'll cheer when they're under $5 per album, and there are talks of shortening the length of copyright protection.

ohhh.... like $3.00 is a price cut?

[neogeek]

Slash?.. I will wait till they have a homicide of the prices.. 2-3 bucks is just a joke.

Yeah Right

[taradfong]

How generous. Rather than making 90,000% profit on $0.02 worth of plastic, they're
taking it in the shorts with a measly 65,000% profit.

Give me a break. Like $12.98 is going to make me get excited about driving my car to a Brick and Mortar to purchase $0.02 of plastic. This is like Microsoft's strategy of settling lawsuits by selling software at a discount to schools.

Re:Yeah Right

[Magic Thread]

They don't get $12.98, the stores do. They get a little less than that. I wonder what the new CDs will cost at Cheap-CDs, which sells CDs at near wholesale prices. That should give you a better idea of how much profit the record companies are making.

Re:Yeah Right

[Stephen Samuel]

I also fail to see how an attempt by a recording company to respond to consumers' complaints about price by dropping their prices is in any way similar to Microsoft responding to complaints about their monopoly and unfair trade practices by trying to unfairly extend their monopoly.

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.

Re:Yeah Right

[hondo77]

Hmm. I pulled a CD out of the air (Live at Carnegie Hall by Renaissance) and compared the Cheap CD price with Amazon and Amazon came out cheaper by almost a buck. Maybe they're not as near wholesale as you think (plus no handling charge and free shipping (over $25) at Amazon). FYI.

To little to late

[autopr0n]

If you ask me, I think the right price for a CD is about $5. $12.98 is a bit much (and why 98? do they think consumers have gotten wise to the whole $n+.99 thing?) It'll eventualy happen.

Re:To little to late

[homer_ca]

The article also said cassette prices would drop to $8.98 which is closer to where it should be. Cassettes don't matter much since they're extinct anyway, but it is interesting because they were sold for the same price as vinyl LPs, and just before they disappeared, LPs sold for $8.99-$9.99.

They've rolled prices back to 1988 which they could afford to do anyway since as a cartel, they can name their price. CDs are still overpriced at $12.98. They originally justified the higher prices by pointing to their new, expensive CD pressing plants, but long ago CDs became cheaper to make than LPs or tapes.

Re:To little to late

[jonabbey]

Of course, ripping and then reselling the CD is a copyright violation.

Which we do care about, don't we?

Re:To little to late

[StaticEngine]

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.

Re:To little to late

[Anonymous Coward]

"But for independant artists, it's a little different."

It shouldn't be if you're tech savvy. Since you're posting on Slashdot, I would have expected you to be tech savvy? It doesn't sound like you are. 100 Mitsui CD-R Bulk $50. That's only .50 CENTS per CD-R. This is the high quality stuff. You could even go much cheaper than this, and why not?

You give away 150 CD's? You could easily burn that many CD's with a cheap ($700 range) CD Duplication tower that cranks out about 60 CD-R per hour. Who needs all the fluff and assorted crap? I thought it was about the music. You could easily print out your own CD Labels with a color printer, not fancy booklets, but you're starting out. You could make the fancy booklets later when you're wealthy. We are talking about pennies per case here, and again pennies to stamp CD-Labels with your band name on the CD-R itself.

So you're out what? 60 cents per CD-R?

x 1000

$600 total costs per batch of 1000 CD's.

Give away 150.

Sell 850 at $5 each.

$4250 per batch. Sounds like profit to me.

Who says you can only sell one batch in a year? If you can't sell more than 850 CD's in a year than you have some serious marketing problems IMHO. If you could sell and produce and distribute even 10 batches (10,000 CD's) which is somewhat small time you would be looking at around $36,000 a year in profit.

Maybe you should re-examine the idea of giving http://www.discmakers.com all of your money and learn how to cut the middle man out of your operations.

GE/NBC already affecting Vivendi's choices

[RobertB-DC]

You probably can't convince me that the move by Universal -- a unit of hard-luck French water utility Vivendi -- doesn't have anything to do with Universal's pending aquisition by GE's NBC unit.

I figure it's one of two things:

* Vivendi is looking to spoil the deal with a profit-killing "poison pill". This would be the strategy of former Vivendi chairman Jean-Marie Messier -- but it's also part of why he's the former chairman.

* GE has already given Universal marching orders -- this was planned months ago. According to this morning's NPR report, Vivendi has been shopping for a buyer for its entertainment units for months, but all previous deals have fallen through. They're likely to do whatever GE says at this point (unless we're back to the first option).

General Electric isn't in the business of filing baseless lawsuits -- they're in the business of making money. Maybe they'll be the ones to blow the lid off the CD price scam once and for all.

Turn-about price cutting

[NeoSkandranon]

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.

Too Little Too Late

[BurritoWarrior]

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.

Explain Cassette vs CD price.

[eddy]

Explain why Cassette is still going to be cheaper. No, really. I want to hear it.

Could it possibly be that CDs are way, way overpriced, even at $13?

Re:Explain Cassette vs CD price.

[Vyce]

Noone can explain this other than music companies swear CDs are better quality and thus charge more for it than the same music on cassette. Of course, since the cassette is basically dead...they should stop sticking it to us and charge the same price. If anything they should lower the price of CDs according to manufacturing price and make everyone happy. On the other hand, greedy people don't become ungreedy overnight.

good bands

[Tumbleweed]

Dude, there are a zillion bands that sound good, with CDs and everything. The problem is not getting new bands, the problem is getting their stuff on the airwaves for people to experience. Check out your local independent radio stations. There's a _fantastic_ morning show here in Seattle on KEXP (kexp.org - check out the online stream & playlist). The show is "John in the Morning". Flat out fantastic stuff that you won't hear anywhere else on the airwaves in Seattle. Listen and then buy their CDs from their own websites, whatever you have to do to support them, if you want good music.

Re:wtf

[jgoeres]

(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).

Labels' contracts ban this

[yerricde]

Would be an interesting situation where one could get an artist's release from two different labels

None of the major labels' artist contracts would allow this. Most labels either take the copyright on the recording outright as a "work for hire" or (for the most established recording artists) demand an exclusive license for a long term.

The only reason why they are Listening is because

[HanzoSan]

We are fighting back. People are boycotting, people are buying used CDs, people are setting up sites like

http://www.downhillbattle.org/
And http://www.boycott-riaa.com/

The fight is just beginning! Its not even close to being over. This should prove that fighting back works more than begging politicians with emails and letters.

Four explanations

[yerricde]

Explain why Cassette is still going to be cheaper.

Less demand among consumers for cassettes.

Some CDs have bonus tracks not available on cassette, and the songwriter and recording artist get paid only for the CDs.

A CD case typically has more space for liner notes than a cassette case does, and the graphic artist gets paid only for the copies included with CDs.

Some newer CDs come with promotional items such as DVDs containing music videos and glimpses into production.

Re:Four explanations

[zakezuke]

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.

heh.

[pb]

If they're lowering the price to match the quality of the music they're releasing these days, then I'd say they'll have to knock off a few more dollars. Here's my suggested pricing scheme:

• Pay me $5 -- I'll watch Britney on MTV with the mute button on.
  
• Pay me $20 -- I'll listen to a track from Metallica's new album.
  
• Pay me $1,000 -- I'll listen to Justin Ti...ah fuck, no I won't.

Why live performances?

[dstone]

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.

Re:Why live performances?

[Magic Thread]

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.

Music is not these things. Music is audio. I love music, but this experience that you say goes along with it does not interest me. Certainly I am not the only person in the world who thinks this way.

Re:Why live performances?

[tgibbs]

Performance is more than music, however. For most artists, listening just to the audio part of their performance is a bit like going to a movie wearing a blindfold. Some artists perform much better in front of a live audience. And unless you have an extremely expensive stereo, you will not experience the dynamic range of a live performance (not to mention the fact that many CDs are clipped). And then there is the whole sound field thing, which audio engineers have been struggling to capture for many years--a difficult task because it involves the way omnidirectional sound interacts with the structure of your head and ears. If the live experience doesn't interest you, I suspect that it is because you haven't much experience with it..

Unless

[snubber1]

When I worked for a car dealership (doing computer stuff, not sales) Subaru decided that the prices on accessories were too high. To correct this they lowered the list price.
Not the cost mind you, but MSRP.
Now the dealers were force to take a paycut while Subaru kept the same profit margin.

I would not be suprised to find out that the cut in list price on the cds was much greater than the cost the stores pay.

Re:It's about time (remember the bread wars?)

[SirSlud]

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.

Not too little too late!

[ljavelin]

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?

Fixed Price??

[afreniere]

Isn't there something wrong with the idea that every CD in their entire catalog is set at the same price? How can they get away with that? I'm sure that the utility and cost of production of those CDs varies greatly. If the CD market were functioning properly, I doubt they would have the flexibility to dictate prices by fiat.

-Ansel.

Wow! You can buy taped backups?

[immanis]

The company, whose artists range from U2 to Reba McIntyre, will also cut wholesale prices on cassettes so its MSRP for top-line releases will be $8.98

Wow! You mean, you can BUY tape archives of CDs in the stores? Here I've been ripping my cds and backing them up to tape like a jerk.

This should save me LOADS of time.

Good start...

[enderwig]

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

$12.98 / CD is actually a HUGE CUT

[Fareq]

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 $9.99 ?

[openbear]

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.

some hard data

[ink_polaroid]

It is ironic that the top echelon of recording artists could not exist without an industry to support them. Strip away the managers and agents, stylists and coaches, from someone like Justin Timberlake and ask is it possible that he could still make a living from music? Probably not. Ani di Franco, on the other hand, has been making a comfortable income for years without the support of the business she's supposed to be in.

As Douglas Adams pointed out, many companies aren't in the business you think they're in. Fox News is, despite a million conspiracy theories to the contrary, simply in the business of delivering an audience to its advertisers. The ethics and actions of the "Big 5" corporations who control 90% of record sales make rather more sense if they are viewed, not as separate companies, but as one distributed bank.

As anyone with any experience of dealing with banks will know, they are monolithically slow to react to changes in the environment, and are populated with highly intelligent, but narrow-minded, solipsists. They're doing now what every one of us was warning them that they should be doing the instant MP3 was rolled out.

By way of related tangent, here is an article by Steve Albini about his experiences with one of the majors, and his advice to anyone thinking of getting involved. At the bottom of the page is a detailed breakdown of a typical deal in which the "industry" made $973,000 and each of the four band members made $4,031.25.

When the entire system is that fucked, the price of a CD is moot.

The problem is that

[TCaM]

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.

I like cassettes

[sheemwaza]

The company, whose artists range from U2 to Reba McIntyre, will also cut wholesale prices on cassettes so its MSRP for top-line releases will be $8.98.

I still believe that older, somewhat obsolete, formats are a great deal for those on a budget. In fact, I purchased my last copy of Windows on 5.25" floppies. 300 of them. Sure, it took over 3 months to install, but at least I feel I got my dollars worth out of Microsoft. I don't like paying for intangible things like software, but 300 floppies.... thats something you can impress your girlfriend wi...
--please insert disk 27 for rest of comment--

Re:I don't know about you,

[Squidgee]

Uhm, no.

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?

Buy Used CDs - send $2 to artist(s)

[Sean Clifford]

Screw Universal and the rest of the RIAA members: unless they're indie buy used CDs and send the artist $2, go to a concert. Musicians don't make dick from CD sales - all production, promotion, legal, administrative, and other costs are charged against the artist. Once *all* of that is cleared, then they get paid a sliver of what's left over after their producer, manager, and entertainment lawyer snack. As an added injury, only in the music industry do artists not retain copyright to their works. Many musicians are now discovering piece-for-hire, you don't retain the copyright to your works. Concerts: this is where artists make their money, their bread and butter - it's certainly not from CD sales. They go on tour, license t-shirts, ball caps, posters, whatever. Make a chunk of concessions, etc. And now the music industry wants a piece of concerts too. Screw 'em. Screw them in both ears - buy indie. If there's non-indie tunes you dig on, visit your local CD Warehouse or hit eBay and buy albums used - then send the artist a couple of bucks.

As usual, Canada leads

[Art_Vandelai]

The Globe and Mail had this article to add..

Universal Music cuts CD Prices

What's most interesting here is not the price of CD's, (which at $14.95CAD is about $11 US), but that they plan to offer Canadian downloads in October for 99 cents (Canadian) a song!

It's too early to say whether any of the other labels will participate, and what kind of restrictions are going to be put on the media. Still, it looks like the Canadian industry has taken a much more concilaitory approach to the problem of filesharing, by giving up on the price, and offering additional share of downloaded fees to artists as well - so at least they're trying to adress some of the complaints on this and other forums.

Here is way they get people to buy . . .

[cyberguyd]

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.

Economics 101

[El]

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!

Monopolies

[iplayfast]

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.

Yes! Now I'll run out and buy cd's!

[armaghetto]

Oh, wait...price wasn't the problem. Shitty music was.

Note to self:
Price was the insult added to injury.

Better still, employees do it too

[freeweed]

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 :)

Support the right to sell out.

[tjstork]

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.