Why are downloaded cd's so expensive? Is it a rip-off?

[Kingsrule]

Bravo Gary

This reply IMO was probably the best worded most logically written and well understood post ever at WBF that that it has to be made a sticky

Gary, you know I love reading your posts. You are the voice of reason

Happy New Year to you and your family

Except for one major point
The labels Gary is referring to are miniscule and irrelevant (sales numbers and $$ volume) in this discussion...

 

[Andre Marc]

Fine, lets split hairs between the number of silver things. So how much are CDs in Walmart, Target, Best Buy or whatever brick and mortars are left? Last I was in one I don't recall seeing too many 10 buck CDs.

Excuse me if I take the contrary position here Andre but our situations are very different. A local pressed or South East Asian pressed CD I can get for 3 dollars in stores. US, EU and JP pressed CDs $17 to $20. Par for the course when I go CD buying in Hong Kong and Tokyo. When I order from Amazon I don't get nifty free shipping so I pay freight AND get slapped taxes and an absurd handling fee of $10 dollars per package.

Now I'll take music where I can get it. While my first choice is vinyl, I do buy MP3s usually by the song only (Dance), CDs and 24bit/n downloads for much everything else I can't get on LP.

I have freakish 15-20 vision yet CD liner notes are still a joke.

The question is, are we being hosed when we download? Where I am sitting I'm getting equal or better quality with the exception of the MP3s for less. Much less. If YOU are paying less buying CDs well good for you. Never mind that there are people out there not paying anything at all downloading files ripped from those very CDs. Those are the ones we all should be pissed at.

The market will handle itself.

First, as US citizens, we are spoiled with our buying power. CDs have always been cheaper here and remain so. I had several European friends who
would travel here frequently on business and buy bucket loads of discs because they were less than half.

Same goes for gas for our cars....

FYI, I live less than 3 miles from both a Target and Walmart. Most new releases are under 10 bucks. The are positioned
as impulse buys.

Your question above, bolded, is the paramount, and thanks for pointing that out.

 

[Kingsrule]

Also to Ken

I never said anything about or referred to Apple in any of my posts in this thread.

 

[JackD201]

Why is that? You only need one copy. What does it matter if it's one of 4 million Katy Perry's or one of 5,000 Oistrakhs?

 

[JackD201]

First, as US citizens, we are spoiled with our buying power. CDs have always been cheaper here and remain so. I had several European friends who
would travel here frequently on business and buy bucket loads of discs because they were less than half.

Same goes for gas for our cars....

FYI, I live less than 3 miles from both a Target and Walmart. Most new releases are under 10 bucks. The are positioned
as impulse buys.

Your question above, bolded, is the paramount, and thanks for pointing that out.

Yeah Andre, well that's the thing right? There's a reason we buy online and its because that's where we can actually find what we're looking for. Not a problem if we were bieberlievers or baby munsters or whatever these pop fan tribes are called. We can get all warm and fuzzy about spending hours upon hours at Borders or Tower but I don't see those days coming back. I think 16/44 and 24/n downloads are priced fairly. If anything, it's the MP3 downloads that are priced too high. Now just thinking of the fuel it takes to get a CD to my door makes me cringe sometimes.

 

[steve williams]

Except for one major point
The labels Gary is referring to are miniscule and irrelevant (sales numbers and $$ volume) in this discussion...

perhaps Gary or others in the know can share the information for major labels as to whether the costs are any different which is clearly the suggestion here

FWIW, I find Winston and Todd's labels to be amongst the best of the very best and my library is filled with them. I have no problem with the pricing whether it be by download or silver disk

 

[garylkoh]

I take exception, if we talk solely about the entrepreneurial risk of a producer! In my previous post I looked at the situation, when you have established contacts and work with mutually trusting people - which does not create a win/win, but rather a loose not / loose not situation.
So: Whilst there are many great producers, the usual situation for the artist, be they in Classical Music or in Jazz (don't know about Rock) looks like that:

YOU deliver the master and the whole caboodle of information for the art work for 0$!
YOU pay the label a lump sum
YOU wave your Royalties whereever the Label has to pay. (Radiostations still pay out to you, as this is legally fixed).

As most Artists cannot afford this, they look for a sponsor or crowdsource or ask Foundations for help. So effectively:

YOU fundraise the production.

I am afraid, this is again not an answer to the question to "how much should a download cost", but I want to put the informed replies of LaserCD and Garylkoh into perspective.

Maybe now is the point to disclose my own interest: I am a violinist. I have produced many CD's for various Labels (mostly german). Recently I have set up an artists label, taking many of above points into account. Our aim is a "fair trade" deal, where all the costs are open to everybody involved.

www.streiffzug.com

Egidius, then you are talking about the entrepreneurial risk of being a musician. You put in time, money and effort in the hope of being successful in the future. I know that Winston and Todd both put time, money and effort into the production of a CD - including paying musicians to perform. Then, they hope that the CDs will sell enough to make their efforts worthwhile.

I don't think that it is different from any other entrepreneurial risk. With rock music, there are companies like Bandcamp (downloads) and Feedbands (vinyl) who provide an avenue for the musicians to get published. I don't know if there is a similar avenue for classical music.

But I do feel for you, being an entrepreneur myself. For every Joshua Bell, there are hundreds of Egidius Streiff. For every Magico, there are hundreds of Genesis. I wish you the best of luck with your efforts.

 

[Bruce B]

I tried to get Winston interested in downloads years ago when I first started working with HDtracks and the roadblock I kept hitting against was DRM. He didn't want anyone to get a digital file without paying for it. It's inevitable that it will show up on the the torrents.

 

[Andre Marc]

Yeah Andre, well that's the thing right? There's a reason we buy online and its because that's where we can actually find what we're looking for. Not a problem if we were bieberlievers or baby munsters or whatever these pop fan tribes are called. We can get all warm and fuzzy about spending hours upon hours at Borders or Tower but I don't see those days coming back. I think 16/44 and 24/n downloads are priced fairly. If anything, it's the MP3 downloads that are priced too high. Now just thinking of the fuel it takes to get a CD to my door makes me cringe sometimes.

Oh, man you bring back memories of spending hours and hours at Tower, Borders, and HMV tingling with excitement..discussing
music with other customers....the good old days.

I lament those days will NEVER be back.

 

[JackD201]

Steve, I believe there is a logical fallacy at play. It's not the label, it's the production run per title and how this translates to the fixed vs variable cost ratios. Just because a label is major it doesn't mean every title enjoys the economies of scale of their chart toppers.

 

[JackD201]

Oh, man you bring back memories of spending hours and hours at Tower, Borders, and HMV tingling with excitement..discussing
music with other customers....the good old days.

I lament those days will NEVER be back.

Yeah, back in the day there would actually be employees who could give you decent recommendations! Try that today!

 

[Andre Marc]

Yeah, back in the day there would actually be employees who could give you decent recommendations! Try that today!

Now you talkin' crazee!

 

[steve williams]

Steve, I believe there is a logical fallacy at play. It's not the label, it's the production run per title and how this translates to the fixed vs variable cost ratios. Just because a label is major it doesn't mean every title enjoys the economies of scale of their chart toppers.

Precisely my thoughts as well Jack

 

[lasercd]

Also to Ken

I never said anything about or referred to Apple in any of my posts in this thread.

Yes I know. Unfortunately you can't have a discussion about downloading of music without including Apple in the conversation. They drive the bus and all the labels are just passengers. If Apple ever decides to offer lossless and/or hi-res downloads all the other sites will disappear.

 

[Orb]

Steve, I believe there is a logical fallacy at play. It's not the label, it's the production run per title and how this translates to the fixed vs variable cost ratios. Just because a label is major it doesn't mean every title enjoys the economies of scale of their chart toppers.

Jack, in the past maybe but I read an interesting article showing how the run number requirements have fallen down as low as 500 to be economical for CD music these days, primarily as the setup has evolved from the mass 10k minimum to a more efficient setup for smaller labels/less popular genres/etc.
This had to happen due to the sales trend over the years relating to physical CD, and that of the technology/infrastructure being better for "manufacturing" music CDs making it viable for small runs.

Cheers
Orb

 

[jazdoc]

Yeah, back in the day there would actually be employees who could give you decent recommendations! Try that today!

When I was attending college in St. Louis, I would walk down to Euclid records a couple of times of month. I was just getting into jazz and there was a long time employee who I became friendly with and would basically tell me what to buy. I should have listened to him regarding the used original pressings that were cheaper than new release CDs! Wish I could go back and thank this guy who really opened up a lifetime of musical enjoyment....

 

[egidius]

thanks

Egidius, then you are talking about the entrepreneurial risk of being a musician.

Thanks Gary for your commiseration, even though I consider myself lucky to do what I want -

Yes indeed, I feel any freelancer takes a risk, and the real art is how to finance yourself ;-)
Egidius



PS If my post came over as a misery, I would have hit a false note: There was the question, how much the artist got, and as LaserCD succinctly put it, the "full royalty" paid to musicians. Combined with your informed note on a decent producer I felt an artists view is necessary.

PPS I blushed when being compared to speakers, thats a first.

PPPS As I will replace my Acustik Lab Stella Opus/Novus Studio Speaker system I might politely enquire, if I can listen to your speakers in Switzerland - You don't have a dealer here, am I right? At home I use simple Merlin VSM speakers, they do nicely there
(Gladly per PM)

 

[JackD201]

Jack, in the past maybe but I read an interesting article showing how the run number requirements have fallen down as low as 500 to be economical for CD music these days, primarily as the setup has evolved from the mass 10k minimum to a more efficient setup for smaller labels/less popular genres/etc.
This had to happen due to the sales trend over the years relating to physical CD, and that of the technology/infrastructure being better for "manufacturing" music CDs making it viable for small runs.

Cheers
Orb

It's analagous to the printing industry. You can go somewhere and have a small run of books done because there are small printers. Are they made and the same way though? That is the question to ask. The assumption is that they are replicated and not duplicated but even in the former there is a variance in stamping quality.

In any case rights are fixed as are items like cover art design. If it is an all new production and not just a re-issue then all production costs down to the coffee is included in the fixed costs.

Let me put it another way setting aside specialized CD pressings, a small run done by a small company will cost you these days about a dollar per CD including the jewel case and the printing. You'll get a better price by a few cents for a larger run. A HUGE (aka Global) release will not be pressed all in one place. That is something a lot of people assume but we know it isn't the case. Pressing will be done in different countries and be distributed from there so the limit to the volume discounts kicks in sooner. So Katy Perry might have just a 10,000 run in a small market like the Philippines for example. Absorptive capacity is low so the quality is low skimping by using old replicator plants. Sadly, yes you can here the difference.

Long story short, 2 bucks tops for an ordinary CD. That's what you forego when you download instead of buying the disc. What you get in its place is mainly time saved.

 

[Phelonious Ponk]

I find it humorous that a website that freely discusses $100,000 DACs and $185,000 speakers would suggest price gouging of a $13 digital download.

Really?

I find it humorous that anyone can freely discuss $100k DACs and $185,000 speakers with a straight face at all. A $5k DAC is amusing. $100k? Theater of the absurd. That has absolutely nothing to do with the huge costs that have come out of the manufacture, distribution and retail sales of music when it goes to the electronic distribution model. Is charging the same $ gouging? That's a judgmental term and one must judge for themselves. A huge chunk of the cost of getting a product to market goes away; the price remains the same. Someone in the supply chain is making a lot more money and the consumer is paying the price. It's that simple. If the consumer is willing, that's the end of the market-driven story. But i sales are way down a re-examination of the market may be in order.

Tim

 

[Andre Marc]

I find it humorous that anyone can freely discuss $100k DACs and $185,000 speakers with a straight face at all. A $5k DAC is amusing. $100k? Theater of the absurd. That has absolutely nothing to do with the huge costs that have come out of the manufacture, distribution and retail sales of music when it goes to the electronic distribution model. Is charging the same $ gouging? That's a judgmental term and one must judge for themselves. A huge chunk of the cost of getting a product to market goes away; the price remains the same. Someone in the supply chain is making a lot more money and the consumer is paying the price. It's that simple. If the consumer is willing, that's the end of the market-driven story. But i sales are way down a re-examination of the market may be in order.

Tim

+1 tim.