Clearly the cost of producing an album has almost nothing to do with the cost of manufacturing the physical medium on which it is distributed. There are, of course, record companies, musicians, songwriters, composers, arrangers, distributors, record stores, etc., each of which gets a 'cut' of the final selling price.

I never said those "inspired" songs made the soundtrack albums any better! (Usually they leave out one or two really good songs that were in the movie to make room for "inspired" crap.)

[not that I am an expert in the music business, just opinionated]

BTW, I do understand how retail prices can have little to do with manufacturing costs. Way back when I worked for a computer peripherals manufacturer (early to mid 80s), the rule of thumb was cost of goods should not exceed 30% of the desired retail price. If COG was higher than that, expect to not turn a profit. COG was defined as the actual cost to manufacture the item, not "burdened" with overhead costs. Things are probably much different now, but the point about mfg. cost vs. retail price is still relevant.

Lots of music lovers recall how Music CD prices were plummenting in the early to mid 1990s, down to levels commonly reaching $11, $10 or even $9 per disc in many places (particularly some notable warehouse style super stores). Retailer cost for a CD hovers around $5 to $8 per disc.

Something happened just a few years ago. The record companies issued in their Minimum Advertised Price restrictions and hinged that on their subsidies for store advertisement. Music retailer had no choice but to go along, and pay higher dealer prices for the discs. And in the case of the class action suit being fought, very large retailers like the company that owns Sam Goody, Media Play and Musicland went along with it since they would make more money. No surprise there since any Sam Goody's store shamelessly sells $20 CDs and DVDs that are priced $10 to $20 higher than what Wal-Mart asks.

Most people in the general public have the impression that all entertainment oriented businesses, be the movies or television or music etc., are dishonest and morally corrupt at the core. The anti-piracy message coming from those guys in the pin striped suits rings more than a little hollow because of that. It would be akin to a crack dealer trying to criticise someone for drinking alcohol.

A lot of people don't understand all the fuss with the RIAA and downloading MP3s. Even a 320kb/s MP3 file doesn't sound as good as the original CD. And most of the ones you can get are only encoded at a mere 128kb/s. Sure the encoders might say "CD Quality" but it all sounds more like Radio Quality. To be honest, I've gotten as good (if not better results) in taking music only broadcasts on my satellite dish and sending the stream out of the MD port on my receiver to a MiniDisc player. But even that is not CD quality.

The RIAA is so irrational and shortsighted in all their copy protection hysteria that they are now threatening to screw up the quality on any electronics device that has digital recording capability. Like televisions equipped with a "V" chip, the RIAA and movie studios want all professional and consumer level digital video and audio recording equipment to have all kinds of copy prevention chips put in as well --without regard to what the efforts will do to quality. These guys are so ignorant with these efforts that they must think we'll buy anything no matter how badly the overall quality is compromised.

http://www.suntimes.com/output/show/cst-ftr-lead07.html

'Brother' he never knew

March 7, 2002

BY MARY HOULIHAN STAFF REPORTER (Chicago Sun Times)

"Until two weeks ago, retired Chicago shipping clerk James Carter had never heard of the movie "O Brother, Where Art Thou?" or its hit soundtrack.

...

In the hot summer of 1959, Carter, then serving time for theft, led a chain gang in a bluesy version of "Po' Lazarus," a song about a deadly struggle between a man and a sheriff. Punctuated by the sound of sledgehammers marking the rhythm, it's the only song on the "O Brother" soundtrack sung by its original performers.

...

After months of investigative work, the Alan Lomax Archive finally tracked [Carter] down at his home. Two weeks ago, Lomax Archive representatives presented him with a platinum copy of the "O Brother" soundtrack and a royalty check for $20,000.

...

Carter is receiving this long-overdue recognition because Lomax was scrupulous about making contracts and corresponding with his performers. He also was determined to make sure that royalties were paid whenever these songs made money. So far, the "O Brother" soundtrack has sold more than 5 million copies.

...

"My father always made sure that the people who made the music benefitted from it," Chairetakis said. "With this song making so much money, it was imperative to find Mr. Carter."

...

In an industry rife with stories of unpaid royalties and misappropriated song credits, the Carter saga is amazing. "The fact that they took the time to find Mr. Carter says a lot about the continuing mission of the Lomax family," Burnett said. "And it says even more about their love of the music and the people who made it."

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quote:

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Retailer cost for a CD hovers around $5 to $8 per disc.

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WRONG! In my day job, I work at a store which sells CDs. We pay between $11.50 and $12.95 for new releases and "front-line" titles. "Midline" titles (stuff over 6 or 7 years old) cost us approximatly $8.50.

We are a small store and thus can't buy music in box-lots direct from the labels. We must go thru a distributor, so our costs are higher than the Wal-Marts, Best Buys, etc. But those stores are still paying label wholesale, which is at minimum, around $10.80 per CD.

Your friendly retailer is NOT responsible for CD prices being what they are, folks. The problem is higher up the food chain.

I used to do music distribution work for small retailers as a second job for extra money a few years ago. The cost of discs did run $5 to $8 at the time. It is only a relatively recent turn of events that dealer costs for CDs has ramped up to levels well over $10 per disc. That is partly in keeping with the goal of enforcing retailers to sell discs at Minimum Advertised Price --which is typically $16.95 to $19.95 for many new releases.

Large retailers like Wal-Mart certainly don't pay as much due to their high volume buys. They're the only reason why different "edited for radio" CDs even exist. Still, some of those large retailers (like the parent company for Musicland/Sam Goody/Media Play) get the wholesale break but still sell the CDs at $20 a piece. And they are named in that class action suit.

The "friendly retailer" for the most part is not responsible for setting prices. And I never blamed them as a whole on it. It is the fault of the record labels and their MAP policies. But places like Musicland and Sam Goody, who get the volume price breaks, still stick it to the customers anyway. So I don't buy any music from them if I can help it.

I've been in the music biz in my day job since long before CDs came along, and while I can't speak for the giant chains, I can tell you that we have always paid $10 and up for new CDs. (In your earlier post you didn't mention that you were talking about "years ago.") I got my figures on label wholesale from Billboard, which is always running articles telling what wholesale prices are. Of course when you start figuring in things like co-op advertising allowances, payoffs for prime display space, etc. then the big stores start doing even better.