You know the companies like BMG that give you 13 CD’s and all you have to do is buy one with no obligation towards anything in the future…how can they give you 13 CD’s for the price of 1? :smack:
It costs next to nothing to burn a CD, packaging is minimal and they have a huge warehouse full of the stuff. The S&H charge is just about enough to pay for the cost. Plus they have you hooked to buy more CD’s.
Same as those PC CD-ROM tutorials given away for free to try. Note the S&H charges. No way it costs 7 or 8 bucks to ship a CD when AOL send 3 per week to us.
This is mostly right, except that the CDs aren’t burnt, they’re real CDs, (in most cases) just like you’d buy in a store.
Basically, you pay $7 or $8 per shipment (IIRC), which more than covers the cost of the CD itself, but is still less than you’d pay for a CD at the store (sad). Also, the CDs that you purchase regularly are a bit overpriced, around $15 per CD, in my experience.
That said, a large portion of my (small) CD collection is made up from being involved in one of these clubs (Columbia House) for a while. My most notable purchases are the three two-disc Star Wars soundtracks (one per movie) as six of my free selections. I think I figured it out once, that my cost (including shipping) averaged somewhere around $7 per CD.
It’s actually not a terrible way to build or start a collection, as long as you get out once your requirement is fulfilled.
I assume that CD clubs do the same thing that record clubs and book clubs do/did: They manufacture their own CD.
These are legal copies; they pay the music company for the rights. Then they make them in their own plant. That keeps costs down, and the amount they pay the music company is less per disk than buying the CDs from them, even when you factor in the club’s manufacturing costs.
I always assumed that the vast majority of the stuff up for sale was overproduction / excess inventory from the major labels, bought at fire sale prices. What are the odds that Columbia House is manufacturing copies of <i>Buffalo Springfield’s Greatest Hit</i>?
They may do this for some CDs, but I’m pretty sure my Star Wars soundtracks are authentic (they came in the little books that serve as liner notes, and they have elaborate holograms on the front), and my Tommy CD says it was produced by BMG…and I got it from Columbia House…
Then there’s the fourteen metric tons of spam and other advertisements they ship along with your monthly letter… the advertisers pay for that to be sent along.
I think that’s a safe assumption. If you look at their catalogues, some popular albums will be missing, while others will stay in the catalogue for years. They’re basically selling excess production.
The other key to their profitability is that they’re betting you’ll stay in the program and buy more CDs at inflated prices. If you do take the initial bunch, fulfill your minimum requirement and then get out, they may lose a little money, and they accept that as part of the risk. Enough people end up getting another 5-15 CDs because they’re too lazy to get out of it that the company makes a profit.
Usually, I’d just wait until they sent me the special deal where you could buy 12 cd’s for the price of one without further commitment, provided you cancelled in writing. I actually built up the first 60 or 70 cd’s of my music collection that way. Suckers.
From my experience, this profit model works because it’s based on hoping you’ll forget to send in the monthly cancellation. Most of these companies will send you a monthly catalog with a “Pick of the month”, which is automatically sent to you unless you send the cancel for that month back.
Unless they’ve changed their business practices since I got suckered in a decade ago.
Mine didn’t do this. I don’t know if the others still do…
Loss leader. A tried and true(ish) marketing philosophy.
Yeah, the “Book of the Month” clubs do the same thing. They hope you forget to mail in your “do not send” card (or do it too late), then they send you the book and charge you for it. They’re hoping you would rather pay for the book than to go to the trouble of sending it back to them.
Which of the companies that offer the music clubs has the largest selection? I’ve never done this before, and I’m willing to try taking a look at it, but I have rather obscure tastes in music.
I had an account with Columbia House a while back (actually two, but that’s another story). I never sent back the slip which said I didn’t want their “CD of the Month”. Instead I waited until I got the CD in the mail, got out a big black magic marker, wrote RETURN TO SENDER on it, and stuck it back in the mail the next morning.
If you’re looking for rare CDs, you’re not going to find many, if any at all. Still, these clubs are a great way to fill in the cracks with things you’ve always wanted but were too lazy or cheap to buy otherwise. For example, I got a whole bunch of old blues CDs from Columbia House for about $7 a piece, when Best Buy and their ilk wanted $14.99 each.