In 5 minutes, I found a company called nationwidedisc.com that will produce 10,000 CDs for me, with jewel cases, 10 page full color insert and full color offset printed CD, using a stamped CD with a glass master, no cheapo CDR burning. Total cost, $0.93 per disk.
At that price, they are even making a profit, so the actual cost must be significantly less than that, not even considering that there are probably economies of scale that nationwidedisc isn’t even close to getting.
Hell, AOL used to send out millions of CDs to people who never even wanted them. CDs are not expensive to make, music is not expensive to make. You’re not paying $15 for production costs.
Here you go. You’re looking at about $6 after you’ve knocked out all of the things associated with making a physical CD and getting onto shelves in real stores.
Jobs doesn’t seem to think so. There have been about 22 iTunes songs per iPod sold. So the average iPod buyer is buying fewer than 2 cds on the iTunes store. A majority of iPod owners probably don’t buy any songs at all. Plus, the iPod sold quite well without the iTunes store for quite a while.
iTunes has had moderate success because the iPod is so successful. I’m sure there are people who choose an iPod because the Apple Music Store is nice, but it’s a much smaller effect, overall.
The impediment is fear of prosecution by the RIAA and people’s conscience. There’s plenty of folks who won’t illegally download music because they know it’s wrong. It’s no secret how to get music for free–there’s plenty of media coverage on the biggest downloading sites. Anybody who wants to do it can figure it out in a minute. I suspect that the biggest consumers of popular music already know where the file sharings sites are.
Personally, I think the entire business of music needs to be rethought, because the genie’s out of the bottle and filesharing is not going to go away. But that’s a subject for another thread.
Only if non physical retailers don’t expect to mark up the product, and you believe the figure of $3.34 to ship a single CD to a store, which I don’t*. Add back a smaller retail markup and whatever portion of the $3.34 is “company overhead” and let’s see where we are. You’re saving 75 cents on the pressing, whatever is actually shipping and distribution, and some markup on the reasonable assumption that a nonphysical retailer will have lower costs.
*I don’t care what Billboard says, a CD does not cost over $3 to ship to a retailer. If it does, the record companies should be put out of business on principle alone, because every other manufacturer in the world manages to ship products bulkier and heavier than CDs to retailers for pennies instead of dollars.
Well that’s obviously not enough of an impediment, unless you think the copy protection is just to be mean. I suppose some people do think that.
No, seriously - Guys like me who aren’t in their 20s anymore don’t know. I knew about Napster, but they made them go legit. I’m sure I could figure out the new way people are doing it if I wanted to do some research on it, but I honestly don’t know at this moment.
Well they are trying to re-think it, but people gripe about everything they try. That’s why I brought this up - I honestly believe that the only thing that would stop people from bitching would be to get all the music they want for free, always.
I think there’s always going to be a substantial base of consumers that is willing to buy music. Music has always been available for “free.” Who didn’t borrow cassettes and vinyls from their friends to tape a song? Who didn’t wait for the radio to play their favorite single, so they could snatch it on tape? There always have been and always will be sources for free music–it’s just now we don’t have to work as hard for it.
I guess this is partly why I don’t get iTunes and the 99 cents a song bit. For me, the incentive to buy legally is so I could get the artwork, the lyrics, the physical product. I could also carry the song around and play it virtually everywhere (CD players are ubiquitous). There’s enough “extras” for me in the physical product.
Personally, I think the industry will have to shift to the idea of viewing filesharing as free promotion. That’s how (most) of the bands I’ve known and played with have seen it. We had a physical product to sell, but we didn’t particularly care if our stuff was found online. For a small to medium-sized band, there really isn’t a lot of money in music sales. The money is in gigging and selling merchandise. That’s one way of handling it. There may be other ways, but to me that seems to be the most sensible.
Better go back and read that chart again. That section is labeled company overhead, distribution, and shipping. Warehouses cost money. Warehouse employees cost money, etc.
For instance, you can get a can of soda (heavier and bulkier than a CD) sent from a bottling plant to a regional warehouse, to a local distributor, to a vending company, to a van, to an individual soda machine that sells all of 20 units a day, sell the product for $1 and still make a profit at each step along the way.
$3.34 to manage storing and shipping a single CD from a warehouse to an individual store is completely ridiculous. It also wouldn’t surprise me in the least to be told that the record companies actually ship in bulk to a store warehouse instead of to the individual stores, and the stores themselves ship to the various locations within their retail markup.