need you ask? of course slashdot is right!! Pop Sci sounds like they don't know wtf they're talking about. UPC-A is 12 digits --- 12 digits, not bytes. 0-9, no letters, #s or symbols (you need code 3 of 9 or other symbologies for those). UPC-A is a sub-set of EAN-13 which (as you may have guessed) is 13 digits.
They've overstated the problem. As a retailer, we've had to deal with 13 digit barcodes for years. Yes, the US manufactured stuff we sell is 12 digits, but the EAN-13 barcodes of european merchandise are 13 digits. Every barcode reader that I've personally seen (yes, my life is lame enough that I've seen dozens of different models) is capable of reading 13 digits. Heck, ISBN (books) have been using EAN-13 for years too.
>awaiting a widespread adoption of a higher resolution audio format such as SACD or 2channel DVD Audio
So am I:o) I've played with both, and I like SACD better the DVD-Audio... But Sony, here again has made the process way harder. By refusing to cooperate with the DVD Audio group they splintered the market. The DVD Audio group was a consortium of companies trying to come up with a plan where Sony decided to go their own route. Hence we're stuck with two competing formats with neither getting a foothold.
PS I forgot one on my list of pig-headed sony formats - the infamous Mini-Disc!
Sony Music was the first major label to quit accepting open CD returns. They're the reason that very few stores accept opened CDs for a refund. They sent out this letter saying that since they don't manufacture defective CDs that they will no longer accept open returns. They said they'd give us about 10 cents on each CD to take care of returns that customers would have. Since then, they've reduced that amount to about 6 cents. Within a month of that original letter, our store got returned a bunch of open Sony CDs from customers - the problem? They bought Janis Joplin's Greatest Hits only to find Simon & Garfunkel inside the case.
I relate this story to warn everyone that Sony is tenacious, arrogant company that will follow through on their threats. Think about how long they stuck with Beta or now they are trying to jam SACD down everyone's throats.
I was referring to gross profit not net profit (I should learn to press preview and rtfmessage before submitting:.) the link that i put in another message shows that grocery stores get 25%+ gross profit... your 1-2% net profit seems reasonable as the link that i put had 3.5% so it's the same range...
That's where those add on sales of used CDs and lifestyle merchandise come in handy. If someone buys the springsteen for 9.97 (loss of $2) but buys two used CDs for 14$ (profit of 6-8$) then your net profit off of the sale is a positive 4 to 6 bucks. So if your store isn't good enough for someone to buy more than just the hit CD, then you are out of luck. My stores concentrate a lot on the indy and deep catalog titles where the margin is better. So including the hits that you lose on and averaging in all the catalog CDs that you make a little more on, your gross profit on new hovers a little under 15%. If you check hoovers.com on transworld, you'll see that operating expenses for some chain stores top 30%, so if they were selling at a 15% margin they'd be losing a ton of dough. That's why mall stores have those horribly high prices. Stores like ours and most indy stores are located in downtowns and funkier areas, so since we don't pay mall rents, we can afford to sell the CDs cheaper in a lot of cases...
San Diego is definitely in need of a good indy store - I was there two years ago and couldn't find anything either. Unfortunately, without a good indy store the best place is circuit city or best buy. If you're going to shop at best buy, make sure you hit it on streetdate as they have lower prices right on the day cds come out (most indys like us do that frequently also) I hope someone jumps in with the name of a good low-priced indy there, but like you I couldn't find one when I was there.
Bull Moose Music. We're in downtown Portsmouth and Salem, NH. My Portsmouth store is closest to you, I bet - It's at 82-86 Congress street and we've got our own covered free parking behind the store - if you've been to downtown portsmouth before, you probably know what a pain it is to find parking... Also if you play in a band, we sell all of our local music at very close to cost (we only mark it up 97 cents) and we'd be happy to sell your album too... If you have any feedback or anything about the store, you can e-mail me directly at bullmoose at sprynet dot com.
The other advice I have to music fans who choose to buy CDs is that if you hit the stores on streetdate, sometimes the CDs are cheaper on that day only. Recently, the chili peppers, springsteen, linkin park, etc. all were 9.97 on streetdate and then 11.97 after that. Streetdates are Tuesdays in the US for music.
This is to the annual report of Publix Super Markets. Their Gross Profit Margin is 26.5% and their Net Profit Margin is 3.5%. So we all have it right:o) we were just talking about different things
>Although 15% is an unusually high profit margin in any industry
Depends if you're talking about net or gross margin. I agree that 15 is high for net margin, although M$ was in the 50s at one point. I was talking gross margin which is unbelievably low in anything but distribution. Distribution of small value hard goods is anywhere between 12-15% in general (again I am talking gross not net).
At retail, most retailers shoot for 40% gross. Apparel retailers shoot for at least 50 gross. Higher ticket items/electronics shoot for 20-25 gross although that is declining over time.
> BTW, the *profit margin* for gas stations and grocery stores is about 1%
We're missing a word from our definitions. You're speaking of net profit margins where I was referring to gross profit margins. Before Hannaford Brothers was bought out (it's a grocery chain where I live), I had some stock and had their annual report. Their gross profit margin was in the mid to high 20s. I don't remember their net profit margin, but I could believe it was quite low.
> I have to say that never, in my entire, have I seen a new CD sell for $6.99 retail.
Bummer - maybe your area of the country is not very price competitive. I'd like to open a store there and lower your prices:o) Our market area is much more price competitive - you can right now hit best buy's web site and see their weekly flyer listing some artists at 6.99 or less. Like most decent local record stores, we beat the prices in their flyer - so you can see that right now a number of artists are at or below 6.99.
Examples of artists that we've sold at 6.99 or less in the last couple of weeks are:
Avril Lavigne for 5.97 Trust Company for 6.97 Lollipop Lust Kill for 6.97 Sinch for 6.97 Apex Theory for 6.97 NERD for 5.97 or 6.97 depending on week Midtown for 6.97
If you are ever back in New Hampshire, I can say that I have two stores there that both, right now, are selling a number of top 40 albums at 6.99 or less.
As for top albums,
Bruce Springsteen day 1 - 9.97 - then 11.97 Red Hot Chili Peppers day 1 - 9.97 then 11.97
you get the idea....
If you tell me what area of the country you're in, I can most definitely point you to stores that will sell music much cheaper than you've been getting it for...
I'll preface this biased statement by saying that I own a record store:o)
Economics 101 of the record store music biz: 1. There are new 'developing artist' price points. A lot of pretty big name artists first came out at this pricepoint (Limp Bizkit's first album did, Godsmack's first, Avril Lavigne)... We (record stores) end up selling them for about 5.99 - 6.99 and they cost us about 5.75 to 6.50. 2. The superstar pricepoints cost us big bucks. The new springsteen album, for instance, costs just a tiny bit shy of 12 bucks. So we all sold it for 9.99 on the first day and, I'm not kidding, we lost about 2 bucks per CD sold. 3. Every store pays about the same for CDs from the manufacturers. 4. Stores make more of the their money now off of cooperative advertising. The cheesy mall stores that you see charge the record companies big bucks to have their posters up or their albums on sale. 5. Record stores have been fighting the labels for lower prices for years. However with the consolidations in the music biz, the labels have their bosses (i.e. the shareholders) pushing for higher and higher returns, so the labels can't afford to reduce the price of albums lest they be sacked. 6. Catalog sales of music are up a little or at least steady. However hit sales are way, way down. The industry believes it to be because of burning. 7. The industry loses tons of money on most artists, but makes it up and then some on the big artists. However since the sales of big artists have been down, the economic detriment to the labels is obvious. 8. Almost all record stores would not make a profit without lifestyle merchandise (i.e. piercings, belts, lava lamps, etc.) and used CDs. 9. A typical record stores' profit margin on new CDs is LESS THAN 15%. No, I'm not kidding. And yes, I very much know what I'm talking about. That's less margin than gas stations and grocery stores. 10. The typical profit margin on used CDs and lifestyle merchandise is over 50%. You can see why we move to selling more and more of that stuff. 11. Consumer attitude towards pricing is that CDs are way, way to pricey and that record stores/labels could afford to sell them way cheaper. Obviously our industry has totally failed here to create value for our customers. You hear nowhere near the bellyaching about software where you buy a Microsoft Office CD that costs them 82 cents to make and they sell for $300! Or about videogames that sell for fifty bucks. It's because consumers feel they've been getting additional value from software and games, but not from music. Is the pop star of today really any better than the pop star of years gone by? Albums now are longer and better produced, but is the music really any better? A lot of our customers don't feel so, so the price of CDs to them still seems to be too high.
What would I do as a reasonable music consumer (as opposed to someone who just thinks music should be free and artists will still record if we steal their works)?
For new CDs, I'd buy those developing artist CDs and only those. That way the record companies will learn that if you charge 6 bucks for something tons of people will buy, but if you charge 15 bucks, very few will buy. If I wanted a big artist that is expensive, I'd wait for it used - The great thing about capitalism is that the almighty consumer will have his/her say and that if you show your elasticity of demand (i.e. you will pay one lower price but not a higher) pricing will change.
>Interpret these as you will.
Pretty easy interpretation - I was totally wrong! Too bad those consitutional writers aren't still around to help us with a reasonable solution to the IP problems of today.
>Suppose I reverse engineer some drug and sell it at cost to Africans who can't afford the patent-protected official product. I guess that's theft too, but I'm not sure how shameful that would be.
Very, very good point - I never thought of it in those terms. It makes it even more important to separate the self-serving theft (no one will die if they don't get to hear the new Springsteen album without paying) from the 'theft' that promotes the greater good. Yet who would be the so-called moral authority to determine what is ok theft and not ok theft? I think the predominance of movie and music theft via p2p obscures those larger issues - and if we don't come up with reasonable ways to prevent economic damage to the music and movie industries, we'll get stuck with draconian laws that will block potentially socially important uses of p2p.
I'm glad that you've researched every single song you've ripped off to make sure you weren't actually hurting the band that released the song. And you've researched that every song you've ripped off was made by non 'innocent' people all the way down the line. You've made sure the recording engineer who will only continue to have a job if the music biz continues to make money - I'm glad you've made sure every single one of them aren't 'innocent'. Wow, you've done a lot of work to prove you can cheerfully execute a murderer. It's a good thing you're so sharp that you know who is right and who is wrong --- be honest, are you Santa? If you are, I really want a pony for Christmas.
I think we're still discussing it because of the scale of it and the economic ramifications of it. Back in the 80s, the much loathed music companies were complaining that home taping was killing the music industry. Of course they were wrong. But now, because of scale, file sharing actually is putting a serious economic dent in the music biz. It is simple to say that it's theft, but if we can't as a society convince people that theft is wrong - even if it's from a horrible industry - then it has massive economic ramifications. No one argues that it's ok to break into a neighbors house if they're not nice people, and we should also easily be able to say that it's not ok to ripoff music even if the record biz are a bunch of thieves themselves. Our arguments that we use to defend our theft (as p2p users) are so self serving that it's embarassing. Information yearns to be free, the music biz are thieves themselves, yada yada yada. Theft is theft - that is simple - but the changing attitude towards direct theft or the sheer size of it has serious implications on our economic structure as a whole.
>Copyright infringment is NOT theft. They are distinct things. Try picking up some law books (and perhaps the Constition).
Thanks for the legal advice - but try searching on copyright infringement theft and you'll see that those law books you'd like me to read in fact disagree with your position. Finally, I don't think you'll find much mention of the IP issues in the 'Constition' or the Constitution.
I find it so hypocritical that many of us obscure the real point of the 'content industry'. They don't want their IP stolen. We can avoid that label and talk about the ripoff prices of CDs, DVDs, and software but none of that makes theft right. I would be wicked pissed if my clients decided to not pay for code I wrote for them because they just stole it from me instead. Well that's why the content industry is annoyed. Rather than supporting another industry that makes it's living off of IP, some in our industry (software) have supported the theft of their IP. Almost everyone makes a living in one way or another off of their own IP. Theft is theft, pretty simple. And being proud of figuring out new ways to steal is shameful.
Slashdot Mirror
need you ask? of course slashdot is right!! Pop Sci sounds like they don't know wtf they're talking about. UPC-A is 12 digits --- 12 digits, not bytes. 0-9, no letters, #s or symbols (you need code 3 of 9 or other symbologies for those). UPC-A is a sub-set of EAN-13 which (as you may have guessed) is 13 digits.
They've overstated the problem. As a retailer, we've had to deal with 13 digit barcodes for years. Yes, the US manufactured stuff we sell is 12 digits, but the EAN-13 barcodes of european merchandise are 13 digits. Every barcode reader that I've personally seen (yes, my life is lame enough that I've seen dozens of different models) is capable of reading 13 digits. Heck, ISBN (books) have been using EAN-13 for years too.
>awaiting a widespread adoption of a higher resolution audio format such as SACD or 2channel DVD Audio
:o) I've played with both, and I like SACD better the DVD-Audio... But Sony, here again has made the process way harder. By refusing to cooperate with the DVD Audio group they splintered the market. The DVD Audio group was a consortium of companies trying to come up with a plan where Sony decided to go their own route. Hence we're stuck with two competing formats with neither getting a foothold.
So am I
PS I forgot one on my list of pig-headed sony formats - the infamous Mini-Disc!
Sony Music was the first major label to quit accepting open CD returns. They're the reason that very few stores accept opened CDs for a refund. They sent out this letter saying that since they don't manufacture defective CDs that they will no longer accept open returns. They said they'd give us about 10 cents on each CD to take care of returns that customers would have. Since then, they've reduced that amount to about 6 cents. Within a month of that original letter, our store got returned a bunch of open Sony CDs from customers - the problem? They bought Janis Joplin's Greatest Hits only to find Simon & Garfunkel inside the case.
I relate this story to warn everyone that Sony is tenacious, arrogant company that will follow through on their threats. Think about how long they stuck with Beta or now they are trying to jam SACD down everyone's throats.
I was referring to gross profit not net profit (I should learn to press preview and rtfmessage before submitting :.) the link that i put in another message shows that grocery stores get 25%+ gross profit... your 1-2% net profit seems reasonable as the link that i put had 3.5% so it's the same range...
That's where those add on sales of used CDs and lifestyle merchandise come in handy. If someone buys the springsteen for 9.97 (loss of $2) but buys two used CDs for 14$ (profit of 6-8$) then your net profit off of the sale is a positive 4 to 6 bucks. So if your store isn't good enough for someone to buy more than just the hit CD, then you are out of luck. My stores concentrate a lot on the indy and deep catalog titles where the margin is better. So including the hits that you lose on and averaging in all the catalog CDs that you make a little more on, your gross profit on new hovers a little under 15%. If you check hoovers.com on transworld, you'll see that operating expenses for some chain stores top 30%, so if they were selling at a 15% margin they'd be losing a ton of dough. That's why mall stores have those horribly high prices. Stores like ours and most indy stores are located in downtowns and funkier areas, so since we don't pay mall rents, we can afford to sell the CDs cheaper in a lot of cases...
San Diego is definitely in need of a good indy store - I was there two years ago and couldn't find anything either. Unfortunately, without a good indy store the best place is circuit city or best buy. If you're going to shop at best buy, make sure you hit it on streetdate as they have lower prices right on the day cds come out (most indys like us do that frequently also) I hope someone jumps in with the name of a good low-priced indy there, but like you I couldn't find one when I was there.
Bull Moose Music. We're in downtown Portsmouth and Salem, NH. My Portsmouth store is closest to you, I bet - It's at 82-86 Congress street and we've got our own covered free parking behind the store - if you've been to downtown portsmouth before, you probably know what a pain it is to find parking... Also if you play in a band, we sell all of our local music at very close to cost (we only mark it up 97 cents) and we'd be happy to sell your album too... If you have any feedback or anything about the store, you can e-mail me directly at bullmoose at sprynet dot com.
The other advice I have to music fans who choose to buy CDs is that if you hit the stores on streetdate, sometimes the CDs are cheaper on that day only. Recently, the chili peppers, springsteen, linkin park, etc. all were 9.97 on streetdate and then 11.97 after that. Streetdates are Tuesdays in the US for music.
This is to the annual report of Publix Super Markets. Their Gross Profit Margin is 26.5% and their Net Profit Margin is 3.5%. So we all have it right :o) we were just talking about different things
0 .h tml
http://www.hoovers.com/annuals/8/0,2168,40378,0
Sorry that I'm too stupid to figure out how to make this a link - I'm just a record store guy, be easy on me!
>Although 15% is an unusually high profit margin in any industry
Depends if you're talking about net or gross margin. I agree that 15 is high for net margin, although M$ was in the 50s at one point. I was talking gross margin which is unbelievably low in anything but distribution. Distribution of small value hard goods is anywhere between 12-15% in general (again I am talking gross not net).
At retail, most retailers shoot for 40% gross. Apparel retailers shoot for at least 50 gross. Higher ticket items/electronics shoot for 20-25 gross although that is declining over time.
> BTW, the *profit margin* for gas stations and grocery stores is about 1%
We're missing a word from our definitions. You're speaking of net profit margins where I was referring to gross profit margins. Before Hannaford Brothers was bought out (it's a grocery chain where I live), I had some stock and had their annual report. Their gross profit margin was in the mid to high 20s. I don't remember their net profit margin, but I could believe it was quite low.
> I have to say that never, in my entire, have I seen a new CD sell for $6.99 retail.
:o) Our market area is much more price competitive - you can right now hit best buy's web site and see their weekly flyer listing some artists at 6.99 or less. Like most decent local record stores, we beat the prices in their flyer - so you can see that right now a number of artists are at or below 6.99.
Bummer - maybe your area of the country is not very price competitive. I'd like to open a store there and lower your prices
Examples of artists that we've sold at 6.99 or less in the last couple of weeks are:
Avril Lavigne for 5.97
Trust Company for 6.97
Lollipop Lust Kill for 6.97
Sinch for 6.97
Apex Theory for 6.97
NERD for 5.97 or 6.97 depending on week
Midtown for 6.97
If you are ever back in New Hampshire, I can say that I have two stores there that both, right now, are selling a number of top 40 albums at 6.99 or less.
As for top albums,
Bruce Springsteen day 1 - 9.97 - then 11.97
Red Hot Chili Peppers day 1 - 9.97 then 11.97
you get the idea....
If you tell me what area of the country you're in, I can most definitely point you to stores that will sell music much cheaper than you've been getting it for...
I'll preface this biased statement by saying that I own a record store :o)
Economics 101 of the record store music biz:
1. There are new 'developing artist' price points. A lot of pretty big name artists first came out at this pricepoint (Limp Bizkit's first album did, Godsmack's first, Avril Lavigne)... We (record stores) end up selling them for about 5.99 - 6.99 and they cost us about 5.75 to 6.50.
2. The superstar pricepoints cost us big bucks. The new springsteen album, for instance, costs just a tiny bit shy of 12 bucks. So we all sold it for 9.99 on the first day and, I'm not kidding, we lost about 2 bucks per CD sold.
3. Every store pays about the same for CDs from the manufacturers.
4. Stores make more of the their money now off of cooperative advertising. The cheesy mall stores that you see charge the record companies big bucks to have their posters up or their albums on sale.
5. Record stores have been fighting the labels for lower prices for years. However with the consolidations in the music biz, the labels have their bosses (i.e. the shareholders) pushing for higher and higher returns, so the labels can't afford to reduce the price of albums lest they be sacked.
6. Catalog sales of music are up a little or at least steady. However hit sales are way, way down. The industry believes it to be because of burning.
7. The industry loses tons of money on most artists, but makes it up and then some on the big artists. However since the sales of big artists have been down, the economic detriment to the labels is obvious.
8. Almost all record stores would not make a profit without lifestyle merchandise (i.e. piercings, belts, lava lamps, etc.) and used CDs.
9. A typical record stores' profit margin on new CDs is LESS THAN 15%. No, I'm not kidding. And yes, I very much know what I'm talking about. That's less margin than gas stations and grocery stores.
10. The typical profit margin on used CDs and lifestyle merchandise is over 50%. You can see why we move to selling more and more of that stuff.
11. Consumer attitude towards pricing is that CDs are way, way to pricey and that record stores/labels could afford to sell them way cheaper. Obviously our industry has totally failed here to create value for our customers. You hear nowhere near the bellyaching about software where you buy a Microsoft Office CD that costs them 82 cents to make and they sell for $300! Or about videogames that sell for fifty bucks. It's because consumers feel they've been getting additional value from software and games, but not from music. Is the pop star of today really any better than the pop star of years gone by? Albums now are longer and better produced, but is the music really any better? A lot of our customers don't feel so, so the price of CDs to them still seems to be too high.
What would I do as a reasonable music consumer (as opposed to someone who just thinks music should be free and artists will still record if we steal their works)?
For new CDs, I'd buy those developing artist CDs and only those. That way the record companies will learn that if you charge 6 bucks for something tons of people will buy, but if you charge 15 bucks, very few will buy. If I wanted a big artist that is expensive, I'd wait for it used - The great thing about capitalism is that the almighty consumer will have his/her say and that if you show your elasticity of demand (i.e. you will pay one lower price but not a higher) pricing will change.
>Interpret these as you will. Pretty easy interpretation - I was totally wrong! Too bad those consitutional writers aren't still around to help us with a reasonable solution to the IP problems of today.
>Suppose I reverse engineer some drug and sell it at cost to Africans who can't afford the patent-protected official product. I guess that's theft too, but I'm not sure how shameful that would be.
Very, very good point - I never thought of it in those terms. It makes it even more important to separate the self-serving theft (no one will die if they don't get to hear the new Springsteen album without paying) from the 'theft' that promotes the greater good. Yet who would be the so-called moral authority to determine what is ok theft and not ok theft? I think the predominance of movie and music theft via p2p obscures those larger issues - and if we don't come up with reasonable ways to prevent economic damage to the music and movie industries, we'll get stuck with draconian laws that will block potentially socially important uses of p2p.
I'm glad that you've researched every single song you've ripped off to make sure you weren't actually hurting the band that released the song. And you've researched that every song you've ripped off was made by non 'innocent' people all the way down the line. You've made sure the recording engineer who will only continue to have a job if the music biz continues to make money - I'm glad you've made sure every single one of them aren't 'innocent'. Wow, you've done a lot of work to prove you can cheerfully execute a murderer. It's a good thing you're so sharp that you know who is right and who is wrong --- be honest, are you Santa? If you are, I really want a pony for Christmas.
I think we're still discussing it because of the scale of it and the economic ramifications of it. Back in the 80s, the much loathed music companies were complaining that home taping was killing the music industry. Of course they were wrong. But now, because of scale, file sharing actually is putting a serious economic dent in the music biz. It is simple to say that it's theft, but if we can't as a society convince people that theft is wrong - even if it's from a horrible industry - then it has massive economic ramifications. No one argues that it's ok to break into a neighbors house if they're not nice people, and we should also easily be able to say that it's not ok to ripoff music even if the record biz are a bunch of thieves themselves. Our arguments that we use to defend our theft (as p2p users) are so self serving that it's embarassing. Information yearns to be free, the music biz are thieves themselves, yada yada yada. Theft is theft - that is simple - but the changing attitude towards direct theft or the sheer size of it has serious implications on our economic structure as a whole.
>Copyright infringment is NOT theft. They are distinct things. Try picking up some law books (and perhaps the Constition).
Thanks for the legal advice - but try searching on copyright infringement theft and you'll see that those law books you'd like me to read in fact disagree with your position. Finally, I don't think you'll find much mention of the IP issues in the 'Constition' or the Constitution.
I find it so hypocritical that many of us obscure the real point of the 'content industry'. They don't want their IP stolen. We can avoid that label and talk about the ripoff prices of CDs, DVDs, and software but none of that makes theft right. I would be wicked pissed if my clients decided to not pay for code I wrote for them because they just stole it from me instead. Well that's why the content industry is annoyed. Rather than supporting another industry that makes it's living off of IP, some in our industry (software) have supported the theft of their IP. Almost everyone makes a living in one way or another off of their own IP. Theft is theft, pretty simple. And being proud of figuring out new ways to steal is shameful.