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"Fair" pricing for CDs?

Discussion in 'Music' started by Jeff Ulmer, Jun 13, 2003.

  1. Jeff Ulmer

    Jeff Ulmer Producer

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    First, this is not intended as an advertisement. I am looking for feedback from the forum as to what is considered "fair" CD pricing, and your attitude towards music purchases in general.

    As some of you know, I am a music content provider. This morning I received an anonymous email from someone claiming the pricing for my upcoming CD release was too high. He goes on to comment that he will stick with his vinyl version of our old record, and a bootleg CD (which originally sold for 40DM, or $24USD) that was produced some years ago.

    The new album took over ten years in production, and several hundred thousand dollars to create, not counting the tens of thousands of hours of labor involved. The CD is being sold for $13USD plus shipping, which is at cost.

    I am not looking for feedback directly related to my project, but am using its development as a basis for providing some perspective. Assuming an artist was to release a CD that had material you enjoyed on it, and was of high quality from a production and packaging perspective, what do feel would be fair to pay for it?

    Also, would you feel any more inclined to purchase this CD directly from the artist know they were being paid for it, rather than getting only a small percentage through a big record company and distribution chain, and that any income would be going directly into producing more new music?

    PS. I have already emailed the admins to see if there is anything out of line with the content of this post.

    I look forward to your comments.
     
  2. Steve Owen

    Steve Owen Second Unit

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    The price of something should be whatever the market will bear without resorting to price-fixing (ie, the trouble the big labels got into with anti-trust laws). If the price you have to charge is higher than the market will bear but less than what will make you money, then you over spent on the production/creation of that product.

    As far as what I will pay for an album... I've spent well over $100 on some titles (such as various releases of Dark Side of the Moon) and felt it was worth every penny and then some. Others I've spent well under $10 and felt as though I'd been ripped off.

    Given the cost of CD manufacturing, $10 seems like a price that's more than reasonable for most releases (that's probably still far more profit margin than record companies used to get on tapes and vinyl). I rarely pay more than $12 (new titles on sale at Newbury Comics usually). I can't fathom paying $17-19 at mall stores.

    -Steve
     
  3. Tommy G

    Tommy G Screenwriter

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    $13 for a band I like wouldn't be too much at all. I normally pay that amount for a new release and I also tend to like non-mainstream stuff so it makes it a little more rare than the mass produced stuff. I am a true believer in whatever you can get for what you put out....take it. I know I would pay about $50 for Jennifer Knapp's Wishing Well CD because it is out of print. Just an example. Hope that helps but I really don't think $13 is out of line.
     
  4. Gary->dee

    Gary->dee Screenwriter

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    Thirteen to fourteen dollars is my cut-off point for a regular CD. Beyond that I think the store or artist is charging too much unless of course it's a special recording(limited editions) or a higher quality format. For a less recognizable artist I'd say somewhere between $9 and $11. In general in this day and age of MP3s and such I think every CD should be $10 just to compete. I'd always prefer to get music from the artist compared to a record company but my tastes are usually the big names so there's little chance of say, Steely Dan or Pink Floyd getting my money directly. I'm sure they have enough money anyway. :wink:
     
  5. Mike Broadman

    Mike Broadman Producer

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    I buy directly from artists and independant record labels sometimes, but more out of principle. The price is sometimes higher than what I coule be paying for a mainstream release in a store. It's not unusual to pay less than 12 bucks for a CD at Best Buy, but when ordering it is often higher.

    Either way, I don't see why a CD should have to cost more than $10.
     
  6. MarkHastings

    MarkHastings Executive Producer

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    I agree with the others that $13-$15 would be the highest I'd pay for anything fairly mainstream. It shouldn't matter how much something cost to make a CD (i.e. you pay the same price at the movie theater for a Billion dollar blockbuster as you do a down and dirty Independent film).

    The only way I'd pay more than $20 for a CD is if it were either out of print, an import, it had some sort of exclusive stuff on it, or something that was considered "Hard to Find". Other than that, I can live without expensive CD's.
     
  7. Jeff Ulmer

    Jeff Ulmer Producer

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  8. Lee Scoggins

    Lee Scoggins Producer

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    I can provide some perspective on CD costs which may serve as a base.

    Here is a recent breakdown of costs from a small project I worked on:

    Total recording fees: approximately $24,000 (assume $1 per disc or less)

    Per disc replication cost with packaging: $1.20

    Artist royaltees: $4.00

    Total Production Cost per disc: $6.20

    Distribution fee: $2.00

    Record Label expected Profit Margin: $2.00

    Cost to Tower and Other Retailers: $10.20

    Expected Retail: Around $14.00

    I provide these to show how much each expense item is. Many people are unaware how expensive royaltees and distribution costs can be.

    I would say that I would pay more for a direct product from someone like Jeff since I feel that supporting a musician I like is a good thing.

    Direct sale: $14
    Retailer: $12 is fair enough

    Now there are exceptions of course...such as:

    1. MoFi SACDs - I think its high but I gladly pay $30 per disc given the great sonics and music content I am accustomed to paying.

    2. Classic Records Vinyl or DAD discs - $25+ and worth it due ot extra care label puts in and great quality work of Mike Hobson.

    3. Audiophile CDs - for classical and jazz I will pay up to $16-18 per disc.

    4. Super Audio discs - any titles I really like I spend around $20 on average. I have found Media Play to have the best prices here in Georgia.

    Hope that helps.

    Jeff, is there a web link to your album? what kind of music is it?
     
  9. Steve Owen

    Steve Owen Second Unit

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  10. Jeff Ulmer

    Jeff Ulmer Producer

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    Lee, I'd prefer to keep any direct reference to my own product out of this thread, as HTF doesn't allow marketing here, which I respect.

    Obviously, album budgets vary widely, from a few hundred dollars, to hundreds of thousands of dollars, which usually has some correlation to the expected market for the product, and hopefully to the sonic quality thereof (unless you run into one of those perfectionistic "I don't care what it costs" types that record companies aren't too fond of - looks in mirror). [​IMG]

    Another cost Lee neglected to mention is advertising, which can be ridiculously expensive. I could blow Lee's album budget on a quarter page ad in a third tier magazine with no problem.

    Costs aside, there is obviously a point where buying becomes attractive to the consumer, even in light of other less scrupulous options, and I would hope that the quality of the product on all levels would have some bearing on what I would expect or be willing to pay for an album.
     
  11. Gary->dee

    Gary->dee Screenwriter

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  12. MarkHastings

    MarkHastings Executive Producer

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  13. Brian L

    Brian L Screenwriter

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  14. Lee Scoggins

    Lee Scoggins Producer

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  15. Joseph Bolus

    Joseph Bolus Screenwriter

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    These days my cutoff point on purchasing a CD is $10.00.

    There *are* some exceptions, such as artists I like on the Telarc label, (mostly due to the fact that I really respect the perceived quality that I get from that label) and I'll go as high as $18 on some of those.

    Now, as to MP3's: I don't mind paying around a dollar each on those (as long as DRM in some form is not attached), due to the fact that I'm getting what I want, and only what I want, and in a format that's convenient to my versatile listening needs.

    With just about any CD, I'm usually lucky to find more than five songs that I really like; so, if I'm paying ten dollars for that vs. five dollars for just those same five songs in MP3 format, then I'm already five dollars behind the current "going rate" from my perspective. Now, in some cases, it's worth it to me to get those same five songs on the CD for double the price due to the higher quality, (thus the willingness to pay extra for Telarc discs), but usually not. (Of course, in many cases right now the songs may not be legally available for purchase in the MP3 format, so that might also influence me to purchase the CD, but I'm thinking that in the very near future that will no longer be the case.)

    Anyway, that's my current thinking on the issue.
     
  16. Gary->dee

    Gary->dee Screenwriter

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  17. David Lawson

    David Lawson Screenwriter

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    I've gotten to the point where I have a difficult time paying over $10 per CD unless it's either SACD or something I'm really looking forward to (such as the Uncle Tupelo remasters and the forthcoming Guster album).

    I used to be an impulse buyer at concerts until the artists started charging more than B&M stores. There's no way I'll purchase a CD at a concert for $15. Jack up the T-shirt prices instead. [​IMG]

    As far as "new music" is concerned, eMusic and an MP3 deck in the car have gone a long way towards destroying my need for a physical disc. It's almost disposable now; I'll burn 12-15 albums onto an MP3 CD and listen to everything a few times. If I don't like it, I delete it. If I like it, I keep it, and stream it to my home system or burn it to an audio CD. If I really like it, I'll purchase the CD to have an uncompressed copy. Everything but the CD purchase (of course) is covered under eMusic's $10/month plan.

    $13 for a CD? It had better be something special, Jeff. [​IMG]
     
  18. Jeff Ulmer

    Jeff Ulmer Producer

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  19. LanceJ

    LanceJ Producer

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    While in the past I have said it would be nice to see CD's regularly priced at $10, I knew in my gut that even non-greedy labels could probably never manage this.

    MP3 is CD's competition? Yes. Is it an equal competition? Absolutely not. For an MP3--even from Applemusic.com--there is no "production" of any kind: that MP3 song is simply a binary file spinning around a big ol' hard disc. To deliver it to the customer requires no packaging; no physical handling (i.e. a paid human stock person); & a big hidden fee, no expensive shipping costs. A compact disc can't possibly compete with such a business model. And that's the LEGAL model! And most MP3s sound crappy on a real stereo system so while they are cheap you are losing quality in the process, so for me CDs are the better choice.

     
  20. Jeff Ulmer

    Jeff Ulmer Producer

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    I think one key to my question is the assumption that you are buying something you will like, and also with the idea that you've either heard it before, have samples available to judge from in some form, or have some pretty convincing reviews or recommendations to go by, or a combination of the above. If I really like something and have to have it, there is pretty much no limit to what I'd pay to own it.

    As for the $10 mark, that would be a nice target to be able to hit as a seller, but in order to do that I would need to know that my sales volume would warrant the decreased margin. I wouldn't have a problem selling at that level if my business could remain viable while doing so.
     

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