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Must a CD Cost $15.99?
scionite0 sends us to Rolling Stone for an in-depth article on Wal-Mart and the music business. Wal-Mart is the largest music retailer selling "an estimated one out of every five major-label albums" in the US. Wal-Mart willingly loses money selling CDs for less than $10 in order to draw customers into the store, but they are tired of taking a loss on CDs. The mega-retailer is telling the major record labels to lower the price of CDs or risk losing retail space to DVDs and video games. (Scroll to the bottom of the article for a breakdown of where exactly the money goes on a $15.99 album sale.) "[A Wal-Mart spokesman said:] 'The record industry needs to refine their business models, because the consumer is the ultimate arbitrator. And the consumer feels music isn't properly priced.' [While music executives are quoted:] 'While Wal-Mart represents nearly twenty percent of major-label music sales, music represents only about two percent of Wal-Mart's total sales. If they got out of selling music, it would mean nothing to them. This keeps me awake at night.' [And another:] 'Wal-Mart has no long-term care for an individual artist or marketing plan, unlike the specialty stores, which were a real business partner. At Wal-Mart, we're a commodity and have to fight for shelf space like Colgate fights for shelf space.'"
I'd be curious to compare this against the breakdown when the CD was introduced. I vaguely remember something like, "Sure, it's $16 now, but if everyone gets on board the economy of scale will reduce the price closer to the record prices you are used to paying! (~$8)". I think these misc. overhead costs are probably just fudge factors to avoid listing them under profit, like how movie production companies make up data to keep their net profits artificially low.
I printed 1,000 CDs for a personal indie project that I did (*cough*shameless self plug*cough*) and $0.80 / CD is around what I paid INCLUDING what I paid the artist to do the art work.
There's no freakin' way that that major labels are paying $0.80 / CD when they print runs in the tens of thousands. They should be getting WAY better bulk deals.
Musicians unions often give significant emergency aid to musicians fallen on hard times. Were it not for help from the composers union, for example, Bela Bartok would have been dead two years earlier than he was. I see no reason to protest.
Having dealt with both sides, it's a hell of a lot cheaper to put together a good album than it is a good game. The tools you need to put together a good album are cheaper, they don't suffer from the pace of obsolescence that afflicts high tech gear. You need the musicians, you need a sound guy (if you're not doing it yourself) and you need a decent recording space.
In the old days, you had to do that in some big recording studio, but these days there isn't any reason you couldn't do it in a sufficiently padded basement with a laptop running some basic music software.
Now some games, obviously, are cheaper than that...Your 60 dollar figure is pretty much aimed at the console market, where the margins are also quite thin since they have all the expenses above, plus a hefty licensing fee. But the vast majority of developers have huge NRE in terms of equipment, artists, programmers, etc, even on failed games that sell poorly.
In short, it's not an apples to apples comparison. It'd be like complaining when a movie DVD is cheaper than a music CD, without acknowledging the tiny difference the box office returns make in the movie profits.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Hm. I thought we did get pressed CDs, but yea, you're right, they were burned. But, from the same place we got ours (DiskFaktory.com), you can get 1000 pressed CDs for $1.17 each...so I think my estimate of $2.50 each is still pretty good.
If I'm not mistaken, I believe that touring is actually the primary source of revenue for most artists. The typical deal is 50% of the box office for a venue. Think 20K people paying $40 a head and that's $400K for one night versus moving 250K CDs (1/2 to a gold record). Coldplay sold 8.3 million copies of X&Y globally, for a presumed global take of $13.2M on album sales (and X&Y was H-U-G-E). The band played 34 US cities for the supporting tour, not counting other countries, at an average take of $400K per stop for a presumed US take of $13.6M, that can probably be doubled given it was a global tour. So $27M for touring, versus $13M for album sales, granted that without the album, the tour would likely have been smaller venues than arenas.
Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws-Plato