This whole thread about diamonds got me thinking: whatever happened to that investigation into compact disc price fixing that was supposed to have been going on a few years ago? Like many intriguing cases it was brought up when an investigation was launched and any follow ups must have been too boring to warrant more than the back page of the paper. Universal recently announced that they were dropping the SRP on their CDs to $12.98, but they have supposedly missed their target date for this repricing structure, and several high profile retailers are criticizing the strategy anyway, saying it will never work because the retailers won’t have any profit margin. Since it’s been well established that CDs only cost a dollar or less to mass produce, what is it that makes these things so damned expensive? I can’t imagine that so much marketing is being done that over 10X the cost of the CD itself is needed to recoup costs.
SAustinTx
Oh, you’ve hit upon one of my favorite subjects - the music industry. They were so indignant a few years ago trying to shut Napster down. What an outrage they claimed. It was stealing money from the performers. (As if music company execs DON’T do that). What a bunch of sanctimonious hypocrites. And I think you have heard stories of more than 1 female musician who was approached by a record company exec to help “improve” her career by doing him a favor. I think you get the idea.
If I might paraphrase what Dennis Miller said a few years ago about Napster (and the music business) "Black artists got screwed by the white artists then the white artists got screwed by the record companies then the record companies started screwing the public. Finally the record companies are getting screwed by the public. With all this screwing going on, I find it ironic that Richard Branson calls his record label ‘Virgin’.
It’s a sleazy business. Price fixing in the music industry? I am shocked !!!
Great. What a “non” solution. They may have been forced to pay out millions in settlements, which damn sure won’t make them want to drop prices anytime soon (have to recoup those costs), and the retailers haven’t taken advantage of the lack of minimum advertised price. Yes, you do see select titles going for as low as $6.99, but these are limited time deals initiated by the record companies to try to gain exposure for new artists. I remember buying the first Papa Roach CD several years back (hate to admit now, of course) for $6.99 and as soon as they had a hit song the going rate skyrocketed back up to the usual mall prices (as high as $18.98).
Hell, if anything, CDs have gotten more expensive over the last few years, and of course it’s all being blamed on Napster and their followers. The argument is that they’re losing money from people downloading music and not buying CDs, so they must charge more for each CD to make up for industry losses. Sounds OK in theory, but if a person isn’t willing to pay $15 for a CD, what makes you think they’re going to pay $18 for it??? Most people I know that download music (myself included) would prefer to have a physical copy of the CD with artwork, lyrics, etc. - we all know MP3s aren’t as high quality and CD-Rs don’t last nearly as long anyway. So a combination of a lower price point (say $10-12) plus those bonus DVDs they’ve been throwing in would seem to be a much better solution than continuing to jack up the prices until only rich audiophiles can afford to own an actual pre-recorded CD.