Record Labels settle for CD price fixing

Subject: BS: Record Labels settle for CD price fixing
From: Devilmaster
Date: 02 Oct 02 - 11:27 AM

Found an interesting article. Seems 5 record labels agreed to fix rates on new CD's. They were sued by 41 states and commonwealths, and the record companies agreed to settle out of court.

Does this mean the end of ridiculously priced CD's?

Personally, I don't think so, but I'm happy to see them get their hand slapped.

Yahoo Article - Music Biz Pays for CD Price Scam

Steve

Subject: RE: BS: Record Labels settle for CD price fixing
From: JedMarum
Date: 02 Oct 02 - 11:37 AM

What is the ridiculous price of CDs? They are bloody expensive to produce, manufacture, disribute and promote. Unless I'm selling 10's of thousands per year, I can't make a living off CDs sales (at a price of around $15 each). I realize big record companies have economies of scale that reduce their costs, BUT their costs are still very high, and they cannot make profits unless they are selling in the tens to hundreds thousands range, and every flop they release cuts into the profits they make elsewhere ... I just don't see the record business as being particularly profitable. It is highly risky, nad unless you can sell into the millions, you are likely to burn most of your profit operating your business. Everyone is after the great big winner ... few are pushing for small, moderate and purely artistic success.

Subject: RE: BS: Record Labels settle for CD price fixing
From: weerover
Date: 02 Oct 02 - 11:56 AM

Don't know the situation in the States but in the UK you can get budget label CDs of "golden oldies", jazz and blues that don't sell in the big numbers for £1.99, £2.99 and the like. Don't these cost just as much to burn and package?

Subject: RE: Record Labels settle for CD price fixing
From: Joe Offer
Date: 02 Oct 02 - 01:23 PM

That's certainly true for newly recorded CD's, Jed. Most lose money, even at $15 a pop. I know many musicians whose homes are jam-packed with unsold CD's.
But weerover has a point, too. It does seem that in the UK, reissues have better prices and more music. I got a two-disc Peter Bellamy set for 13 pounds, and each disc had almost 20 cuts.
-Joe Offer-

Subject: RE: Record Labels settle for CD price fixing
From: Mark Clark
Date: 02 Oct 02 - 01:42 PM

Here is an RIAA article on the cost of CDs. Of course the industry view is that they're a bargain and they may have a point. Still, I believe the cost of the media and packaging is far less than the cost of vinyl LPs used to be. The major costs are in content production, advertising and distribution.

I'd be interested in learning about the financial aspects from Mudcatters who've produced and sold their own CDs. I'm thinking that self-produced CDs should be more profitable to sell at gigs than LPs ever were but I may be wrong.

What experiences have folks had?

      - Mark

Subject: RE: Record Labels settle for CD price fixing
From: dick greenhaus
Date: 02 Oct 02 - 07:58 PM

CDs are probably the cheapest form of recording that has ever existed. And it's almost impossible for any small label or self-produced CD to make a buck. Problem, of course, is volume.

Pressing a CD involves a minimum of 500 copies--more economically realistically, 1000. If you're Alison Krause or Ralph Stanley, it's not difficult to sell that many. If you're not as well-established, you're going to have a house full of shiny coasters for a long time.

If you want to include a booklet, that's apt to cost considerably more than the CD. So is the kind of artwork that promotes impulse buying.

Selling through retailers is also a problem. Stores aren't apt to be eager to display unknowns and mail-order operations (like CAMSCO) can sell only what customers order. Distributors are reluctant to stock unknowns, and so retailers have to order their CDs directly from a vast number of artists. And remember, neither distributors nor retailers can afford to pay the producer full retail price.

I'd venture to say that the bulk of sales of folk recordings by lesser-known artists occures at events at which those artists are performing. They're probably best viewed as a means of supplementing the gig fee than as a noticeable profit center.

Pop recordings are said to hit gold or platinum sales; folk sales are better characterized by things like pine or birch.

Subject: RE: Record Labels settle for CD price fixing
From: JedMarum
Date: 02 Oct 02 - 08:24 PM

If you work a lot, and move around a lot (see new audiences) and have a few different CDs to sell, as an independent artist you can make a buck - but it's hard to make many. Some do better at sales then others. You sell more at concerts and festivals then you do at pubs ... you have to see new people all the time or have new CDs to sell 'em.

Radio airtime helps ... I've sold CDs on-line (amazon and cdbaby) after every live show I've done. That feels good, but on-line is my smallest profit (amazon and cdbaby take 60 and 45% respectively). I've sold a couple hundred or so on-line and about 1500 off the stage. I created just over 2000 and have about 150 left - in two years. Not much profit for making a living - but it is building. I have a new one about to come out, and I expect it will do much better. I also expect sales to be rekindled (on-line) in the old one as the new gets airtime, if it gets airtime.

I realize I am luckier then many independent artists in that I've sold out my first run of CDs. I have worked at it - pushing it to radio (especially in Ireland) - pushing it for the stage, as much as I am comfortable. I travel enough and perform enough, that after selling 1 to 20 or so at every place I play, I'm about sold out. BUT - without record company volumes, I can't really call the income much more the tips!

As an indi, I amy get more pices of the pie ... but it is a much smaller pie1 A record label can get you everywhere, but you loose most of the profit ... it's trade off.

Subject: RE: Record Labels settle for CD price fixing
From: DonMeixner
Date: 02 Oct 02 - 08:40 PM

When my band did our CD we had no intention of making a living off it.
We planned to pay for production and have something to sell at jobs besides recipe books and ties. For us it was vanity plain and simple.
Something to show for 30 years of music making in NY State. And we sell them at $15.00 a toss and after a job we have sold enough to cover our travel expenses and pay for a decent feed on the road home.

I can simplethighs with Jed and Seamus and anyone else who is working and taking a living off the road. Producing a CD is a full time job for the time spent in production. And its work that doesn't pay for it self for sometime after the production is done.

Don

Subject: RE: Record Labels settle for CD price fixing
From: mack/misophist
Date: 02 Oct 02 - 08:52 PM

To answer the question everyone has been pussy-footing around, mainstream commercial cd's cost about 50 cents per CD. This is without the jewel case, etc. That has been stable for several years according to the article in Wired. Places like Tower Records that manufacture, distribute and retail and the real bandits. Can any of you say 'Boycott' or 'Shop Local'?

Subject: RE: Record Labels settle for CD price fixing
From: Devilmaster
Date: 03 Oct 02 - 04:25 AM

Quote:
-----------------------------------------------------------------
Places like Tower Records that manufacture, distribute and retail and the real bandits. Can any of you say 'Boycott' or 'Shop Local'?
-----------------------------------------------------------------

Actually, Tower was also included in the suit. On top of the 5 record distributors, three retailers, Tower, Musicland and Trans World Entertainment were also included.

Steve

Subject: RE: Record Labels settle for CD price fixing
From: treewind
Date: 03 Oct 02 - 07:56 AM

Weerover: CD's of old stuff are produced from masters the record comany already has. No studio costs, no royalties to the performers, and promotion and marketing is easy because they are putting out stuff with a known track record. It's a way of squeezing a bit more money out of old stock that's already earned its keep. It sell cheap because it's cheap to make.

Mark : I'm a MudCatter who has produced and sold his own CD's, and I am now faced with an interesting decision about recording for Wild Goose (A UK folk label specialising in English Traditional music). The economics are interesting.

The home produced CDR costs less than £2 each to make (CD blank, jewel case, paper and ink for inlay cards). I'm not counting my time nor the capital costs of recording and production equipment. They CD's sell for £10 and we sell them only at gigs or sometimes on the back of a floor spot at a club where we weren't the booked guest. I make batches of 10 or so at a time, and we've made less than 100 in total so far.

The Wild Goose deal costs nothing: you go to the studio and take however much time you need and all the friends you want on the recording, within reasonable limits. WG foots the bill for all the recording, production and promotion. You get 10% for every CD sold by Wild Goose, and you can buy copies of your own CD in batches of 25 at trade price which means you make about £5 per sale at gigs.

So on sales at gigs I make more on home produced CDR than I would on a "commercial" label.

With the Wild Goose option, on the other hand:
- It's a proper pressed CD on a known label, so more likely to be accepted by magazines for review, radio stations and retailers.
- The record label has the contacts for distribution and promotion.
- If it sells really well, there isn't a production bottleneck.
- The wider exposure might get you more gigs

So it's fame vs. fortune, sort of!

Of course, like any record label, they will only take you on if they think the risk is reasonable.

There's also the high risk route where you pay for studio time, mastering and pressing, then have a pile of 1000 CD's at home and wonder how you're ever going to get rid of them. I'm not going near that. It works if you know you can sell them all quickly but in that case a record label would probably be interested anyway.

Anahata

Subject: RE: Record Labels settle for CD price fixing
From: GUEST
Date: 03 Oct 02 - 08:05 AM

An the people who ran Napster and used were considered to be crooks. God big business has a lot of nerve...they just want a monopoly on robbery.

Subject: RE: Record Labels settle for CD price fixing
From: harvey andrews
Date: 03 Oct 02 - 07:06 PM

Cheap re-issues have got all their costs back as said above. Folk music live is cheap compared with other forms of live music in general. Costs of getting to gigs,running the car,advertising, agents etc are the same. CD's have kept many artists working who would otherwise have to give up.Pay twice as much on the door and they could keep going and travelling without them.I've worked audiences as have all my fellow pros who have paid £5 on the door and £10 on a couple of rounds of drinks. Give thanks that self-made cds put control back into the hands of the artists and not the big business record companies, and allow them to make the music you like and travel to you with it, without wondering how the bills will get paid.And don't download their tracks for free and then wonder why they don't come round your way again.You pay for so much you don't want, need or support in this life, like the coming war, with the taxes you can't avoid, but the artists you like you can support and keep going of your own choice. It's up to you.

Subject: RE: Record Labels settle for CD price fixing
From: michaelr
Date: 03 Oct 02 - 07:39 PM

Click here for John Dvorak's column on the subject, from the current issue of PC magazine (no, that's not about Political Correctness).

Cheers,
Michael