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RIAA Says CDs Should Cost More
Posted by
kdawson
on Wed Feb 07, 2007 12:07 AM
from the when-bandersnatchii-fly dept.
from the when-bandersnatchii-fly dept.
EatingSteak writes "The folks over at Techdirt just put up a great story today, with the RIAA claiming the cost of a CD has gone down significantly relative to the consumer price index. The RIAA 'Key Facts' page claims that based on the 1983 price of CDs, the 1996 price should have been $33.86. So naturally, you should feel like you're getting a bargain. Sounds an awful lot like the cable companies saying cable prices are really going down even though they're going up."
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My eyebrows are raised.... (Score:5, Insightful)
Re:My eyebrows are raised.... (Score:5, Interesting)
Re:My eyebrows are raised.... (Score:5, Insightful)
Re:My eyebrows are raised.... (Score:5, Insightful)
Or more likely, they'd blame the drop in sales on piracy and direct their wholly-owned subsidiary members of Congress to push yet more ridiculous legislation through in support of their dying business model at the expense of the citizenry.
Re:My eyebrows are raised.... (Score:5, Funny)
Re:My eyebrows are raised.... (Score:5, Insightful)
Re:My eyebrows are raised.... (Score:5, Insightful)
- Find up and coming artists.
- Sign those artists to highly unfair contracts because there is no other way to get music distributed.
- Front artists seed money to record albums, and spend lots of money on studio magic making things sound better, all of which is recouped before artists actually make any money off royalties.
- Promote those artists through radio, which they control through payola.
- Control the distribution channels. Distributors won't work with non RIAA music.
- Sell full CDs even when people only want one song. Include three good songs and seven filler cuts.
- Rotate media every 10 to 20 years and re-sell their back catalog over and over. They successfully did this with records, tapes, and CDs. They have been unsuccessful with products like eight track and minidisc. The jury is still out on SACD and DVD-audio, but it isn't looking good.
- ...
- Profit!
This is failing in the following ways:Re:My eyebrows are raised.... (Score:5, Funny)
That's just silly---no member of Congress is a wholly-owned subsidiary of any one company. Ownership of any member of Congress is a much more complex beast involving many different investors.
Re:My eyebrows are raised.... (Score:5, Informative)
But the problem is going the new routes and trying a new business model is somewhat risky. So the put up such statements in the hopes that people believe the bullshit and they can get away with it a bit longer. They don't want to raise prices... they just want to feed us bullshit in order for us to be quiet and be happy that it isn't even worse than it already is. It's a question of relativity.
Re:My eyebrows are raised.... (Score:5, Insightful)
"1) there are plenty of us who were around and remember the initially massively over-priced CD and promises of huge price drops once the technology took hold,
Which they have; they've dropped about 60% in constant dollars since launch.
"2) pretty much everyone of any age already knows that CDs are a lot more expensive than they should be, not a lot less."
Yet nobody is able to exploit this. Even Magnatunes, which pushes the cost of the music production onto the artist, still sells CDs for $8 each, direct. CDBaby, another cool company, sells CDs for $14. And there are hundreds of really cool indie labels -- run by people who are musicians, or who really and genuinely care about the music -- that also sell their CDs for typical pricing.
"This is yet more panic-induced, ill-conceived **AA FUD, when will these people learn how to die with dignity?"
...then why don't you become the one that kills them? I'm 100% serious. If everybody knows that there's this amazingly huge profit margin built into CDs, then there must be somebody out there who can figure out how to find artists, produce their work, pay them fairly, give their stuff proper promotion, and sell a reasonable number of copies at $3 or $5 or even $7. The record companies clearly don't -- they still only manage to net around ten points at the end of the year. From what I read on Slashdot, it's a market that's ours for the taking.
Re:My eyebrows are raised.... (Score:5, Insightful)
Well, no, they aren't, not entirely.
If one sugar producer decides the "true" price of sugar is $15 a pound, then you can buy sugar from somebody else. But if you want to buy the latest Weird Al or Madonna album, there's only source. It's a monopoly, an in theory limited but in practice eternal one called "copyright". If they double the price of the hot Madonna release, there are a lot of people who won't think that Weird Al is just as good, and vice versa.
It's also important to note that RIAA is a trade association of major music producers, not a single producer. If the major labels (heaven forbid!) were to get together and, say, fix prices [usatoday.com] then market forces would also not apply. Not that they would do such a thing; RIAA is here to help us. I'm just talking hypotherically, you see.
Re:My eyebrows are raised.... (Score:5, Insightful)
and
"But if you want to buy the latest Weird Al or Madonna album, there's only source. It's a monopoly, an in theory limited but in practice eternal one called "copyright"."
Bingo! Mod parent up.
There are no free markets in goods protected by copyrights and patents. These goods are covered by government granted monopolies. It should also be obvious that these monopolies distort the markets or people would likely not bother with them. I mean why go to the trouble to get a patent if it is not going to give you an advantage in the market? Why push to hve copyright terms extended if it is not going to help you in the market?
One quirk though, even without copyright, there is still only one source in the first instance for the work of a particular artist.
all the best,
drew
Re:My eyebrows are raised.... (Score:5, Interesting)
Then again, practically every high school girl has a $5000 Louis Vuitton purse (god those things are fugly), so it's not like there's a big bargain-conscious consumer base. And there's always the rental stores like Tsutaya, which seem to have more CDs than DVDs, so the thrifty can rent a CD for a couple bucks & copy it to their minidisc/MP3 player.
Re:My eyebrows are raised.... (Score:5, Interesting)
On the other hand, we also don't generally get DVD's packaged as a bonus [yesasia.com] on a regular basis. Japan does. Japanese inserts are also usually much thicker than ours, with tons of photos - heck, several of my "regular" (non-SE) CD's from Japan came with a whole separate photo book (as does the random CD I'm linking to above). Even the CD cases themselves are thicker and better made. In short, you get what you pay for.
The RIAA's problem is they've been downgrading the value of their product for years, which of course is going to drive both demand and prices down along with it. Imagine if every big new release here came with the first couple singles (including b-sides), a live DVD, and a photo book - and that was the regular edition! That's akin to the situation in Japan much of the time. So it's no surprise that CD's there cost $25 or so and that people will pay it - they'd pay it here too if there was actually that much value in the product being offered.
Re:My eyebrows are raised.... (Score:5, Insightful)
Re:My eyebrows are raised.... (Score:5, Funny)
Re:My eyebrows are raised.... (Score:5, Insightful)
Re:My eyebrows are raised.... (Score:5, Funny)
Re:My eyebrows are raised.... (Score:5, Interesting)
Every year, they seem to make these things cheaper and lighter. The last batch of CDRs I picked up were $5 for 50 and I thought they were damaged because they were nearly transparent. I would have taken them back, but it would have cost me more in time than it was worth. Sat on my shelf for a couple weeks and then I ran out of the good stuff and grabbed what I had. I was surprised -- it actually worked.
Its a far cry from the first disc I bought, which looked like a copper mirror and felt like a piece of plasticized metal.
Without doing actual research... (Score:5, Informative)
CDs are STILL $13-18 (unless they are at Costco or "on sale", usually), but back in 1983, a decent computer cost $2000 (you can't even buy a computer that bad now, for as little as $299).
Even a nice calculator was about $50 or so (better ones now for under $20). A Color TV (A heavy CRT, 13 channels, click-click tuner) was 2 - 3 times what they cost now (for 121 channels, multi inputs, remote, etc. etc.)
The list goes on and on and gets "worse" (for the RIAA argument) when adjusting for inflation. LOTS of stuff is far cheaper than it has ever been.
Bah.
Re:Without doing actual research... (Score:5, Interesting)
Computers are a bad example because its hard to compare apples with apples (or even Apples with Apples). The specifications of computers have gone up exponentially while the prices have, at least, failed to grow with inflation. Meanwhile, the specially designed low cost "home computer" (a la C64, Sinclair etc) has been replaced by bargain bucket versions of "office PCs" essentially built from surplus components from an overcrowded industry...
In the case of CDs - which are still the same product as in 1983 - what should have happened is that the initially high "early adopter" price should plummeted in the first few years until it hit the old LP price point, then followed inflation.
Personally, I don't have any great problems with the current price of a CD (although it would be nice if much more of the profit went to the artist) - but they were overpriced during the 90s.
Big problem for the music industry is that they would love us to all "buy the white album again" on SACD or some new format, but the pesky techies have decided that the 12cm optical disc is "just right" and keep making the new players backwards-compatable, then MP3 comes along and is huge, but (whimper!) you can just convert your existing CDs! Oh, the humanity!!!
Re:My eyebrows are raised.... (Score:5, Informative)
And right on, They compare the price of a new product to the price index instead of the price it should have been retailing for. If someone did the math in the same way with a normal valued price, I would bet that they would be a little more expensive now. I guess RIAA might be doing the "see, you getting a deal already so don't pirate" thing here.
Nothing like making you feel good about paying too much for something then by illistrating that they could be at a higher price.
Re:My eyebrows are raised.... (Score:5, Insightful)
Re:My eyebrows are raised.... (Score:5, Insightful)
The RIAA corps arent interested in you buying more music. They're interested in you paying lots for _their_ music.
If you buy _more_ music, the revenue stream gets diluted. The cost to produce per unit sold becomes a larger part of the total revenue of each unit sold, and they get less profit. More music means more varied music taste and music exposure, in turn leading to less per-unit income off radio stations, etc. Less revenue per unit means less marketing capital, means less power to push independents off the air and off the shelves. Less control. Less money to those who control the market channels, and a larger piece of the pie to more of the actual artists and composers.
Not at all in the RIAA corps interest.
"Basic economics."
Basic free market economics. But the intellectual monopoly industries are nothing like a free market.
The fact is that the digital revolution has cut production costs for professionally produced music down the level that basically anyone who can afford a halfway decent used car can afford to make their own professionally produced album. The internet revolution has cut distribution costs down to zero. On a free and competetive market, the pricing of music would reflect that, and the prices would fall down to maybe a dollar per CD, and far less for the most widely produced CD's.
As long as we allow the monopoly rights to remain, this gain of wealth will remain unrealized, and we'll see far less music than we should, far more marketing (and its even less savoury accompanying corruption a payola and lobbying) than we should, and a much poorer culture than we should.
What a joke (Score:4, Insightful)
Re:What a joke (Score:5, Insightful)
So yah, if it cost the same amount to actually make the CD in 1983 as it did in 1996, or 2007, there might be some validity. But the physical cost of the CD fully packaged is 10 cents or so.
So we're expected to believe the majority of costs in that same article are related to booths. When a 6$ record is replaced by a 14$ CD, the price works out the same. Nothing got cheaper, they just want us to believe a CD is magically as hard to make now as a LP in 1983.
Re:What a joke (Score:5, Informative)
Indie artists who get stuff replicated in 1000 CD batches from OasisCd or Diskmakers pay about $1.70 per CD. These are PRESSED, retail-ready, in standard jewel cases, in color, with barcodes, spine labels and all the trimmings, shipped to your doorstep.
So, a physical cost of a CD is $1.70 or so for non-RIAA indie music. If you go to Sony DADC or another large manufacturing house and order 100K or gold (500,000) press jobs, your cost for a retail-ready jewel case+CD is between $.60 and $.90, depending on printing options. This info is from an actual quote. 10 cents a fully packaged disc is unrealistic. Materials alone are more then that. 10 cents gets you a pressed CD with 1 silk-screened color and a mylar sleeve.
Remember that about 50% of any retail price consists of retailer/wholesaler cuts. Indie artists who sell through Amazon watch as Amazon takes 55% of the retail price, distributing 45% to the artist. Assuming a $12.00 CD, lets break this down:
Out of that 45% ($5.40), the artist has to fund:
shipping to Amazon ($.25)
Duplication ($1.70)
17 U.S.C. 115 compulsory royalties ($.91) low end cost.
Producer's standard 20% cut ($1.08)
This leaves $1.46, with which the artist has to eat, promote, fund the next record, and tour on.
Anyway, the point is, CD pricing is complex. The RIAA is wrong though. CDs should cost less, but at the expense of our convoluted, monopolistic distribution system (cartel?), not at the expense of the artists.
Re:What a joke (Score:5, Informative)
SCENARIO 1) The indie artist does a cover. They have to pay compulsory royalties. When Rusted Root did "You Can't Always Get What You Want", they had to pay royalties. Conversly, when I cover a Rusted Root song, Rusted Root is getting 9.1 cents per song per album sold in royalties from my CD sales.
SCENARIO 2) If the indie artist wrote their own music and signed a contract with a record company, hopefully they weren't stupid. If they weren't stupid, the contract included a clause that says something like:
-------
15. COMPULSORY ROYALTIES
a. All musical compositions or material recorded pursuant to this Agreement which are written or composed, in whole or in part by Artist or any individual member of Artist or any producer of the masters subject hereto, or which are owned or controlled, directly or indirectly, in whole or in part, by Artist or any individual member of Artist or any producer of the masters subject hereto (herein called "Controlled Compositions") shall be and are hereby licensed to Company:
i. A royalty per selection equal to 100 percent (100 %) of the minimum statutory per selection rate (without regard to playing time) effective on the earlier of (A) the date such masters are delivered to Company hereunder or (B) the date such masters are required to be delivered to Company hereunder. The aforesaid rate shall hereinafter sometimes be referred to as the "Per Selection Rate";
-------
The above was pulled from an actual contract. It allows the artist to earn compulsory royalties on their own work, in addition to sales royalties. This is usually a good thing. As you can see, that is section 15, which is from a 32 section contract that runs 24 pages. This industry is exceedingly, needlessly complex. I wish it weren't so.
Anyway, I hope this is a decent explaination. Remember, royalties are paid separately for both the RECORDING and the COMPOSITION.
Re:What a joke (Score:5, Informative)
Commercial CDs are typicaly not burnt, they are pressed. In some ways they are like vinyl in the way they are mass produced, from a master, stamp stamp. The process i'm familar with uses a glass master which then a laser is used to etch the photo sensative layer, then several metal molds are made. Then the metal molds stamp the plastic layer, and reflective layer is added.
This is not like your home brew system.
Tape was always more tedius, you rather needed a loop master which would play and replay as banks of decks recorded them. The process could be automated to a large degree, but still the speed at which you copy was limited, vs pressing while requiring more prep time produced copies faster per unit.
Re:What a joke (Score:5, Interesting)
No it is not. Ask what happens to unsold CD's at the local music store. Prices are artificialy high by created shortage. Surplus is returned, not sold on a discount. Ask your local retailer what happens to unsold titles that waste valuable floor space.
Re:What a joke (Score:4, Insightful)
I don't think I'm the first to say, but it really isn't supply vs. demand at all.
"Supply & Demand" implies a free market, ie, one with (theoretically) infinite suppliers and infinite consumers. In practice, we just say "many" suppliers and consumers, both of whom are price takers. Emphasis on takers.
Even with the concept of monopoly pricing "creating a shortage", that is more like OPEC (a large group acting as a monopoly). OPEC, believe it or not, is a price taker. They do not say "ok I will sell you this many barrels of oil at, say $60/barrel. They can only set a goal price of $60 by restricting supply.
Retails sales are a completely different ball game. Of course, by the definition of copyright, and the fact that the record label holds it (as opposed to the artist), that label has a monopoly on selling that artist's music. To prevent competition from similar artists, they have a cartel going for them.
So, one could say that the labels have at least a partial monopoly. But here's the kicker: they are price makers. In a market (such as the market for futures, where you get quote "oil prices"), a monopoly would set supply. In retail/wholesale, the label sets prices (well, wholesale prices). There is no market to buy whatever's there at whatever price will make it move.
Rather, the labels set a price (at least a wholesale price), and the public buys however many units they feel like. The supply is theoretically infinite... it'd be a tough case to argue that they would stop printing additional CDs as long as they keep selling. Basically, they set the price (retail is $12.75 IIRC), and the public buys or does not buy.
Because it's not like production ever gets easier (Score:4, Insightful)
You don't even want to hear how much the RIAA thinks you should have to pay for a machine capable of a billion calculations per second...
Please, do raise the prices (Score:5, Insightful)
Re:Please, do raise the prices (Score:4, Insightful)
Re:Please, do raise the prices (Score:5, Interesting)
As it is, many of the indie artists I have worked with, and in some cases, recorded, price their records below the RIAA retail range of $16-$22, so they can sell more. A huge number of indie CDs are $10-$15, which is much more in line with what the market will bear.
The RIAA will not make good decisions. They want the market to react to it. They don't want to react to the market. As long as they view the industry that way, they will continue making bad decisions.
So let them.
It doesn't matter (Score:4, Insightful)
I'm rich!! (Score:5, Funny)
Pricing and inflation?!? (Score:5, Insightful)
Also, the cost of international phone calls has declined markedly since 1925. Based on inflation, we should now be paying $500/min for international calls. Don't tell the telcos!
Similarly, the cost of motor cars has come down since the Model-T Ford - they should cost $1.5 million each (based on inflation - discounting better performance these days)
Or... perhaps technology and economics has some influence on the price of things too..
Key fact, cost of mass production (Score:5, Informative)
No, because CDs are by far cheaper to mass produce than cassettes or, in all fairness, vinyl. For a small production run of vinyl, i'd expect to spend $1.00 per disc [recordtech.com] including a paper dust cover. CDs I would expect to spend 1/2 that [communitymusician.com] with a basic sleve for a small production run. Cassette I would expect to spend double that of CD.
Yet for some reason, they sell commercial cassettes for less than a CD.
Not to speak of mastering seems to be done by some yahoo with protools.
Marketing costs (Score:5, Interesting)
FTFA:
For every album released in a given year, a marketing strategy was developed to make that album stand out among the other releases that hit the market that year. Art must be designed for the CD box, and promotional materials (posters, store displays and music videos) developed and produced. For many artists, a costly concert tour is essential to promote their recordings.How about you all agree to stop marketing the CDs and just let the people choose what they think is good, rather than trying to tell them? We'd all save millions.
#include <derisive_laughter.h> (Score:5, Insightful)
Quantity 10,000: USD$0.79.
Explain to me again why these fsckers cost $16.00?
Now then, what was the per-unit pressing cost, quantity 10,000, of a CD in 1980? If we calculate MSRP as a percentage multiplier of the raw pressing cost, what should music CDs cost today?
Schwab
Hell, that's nothing. (Score:5, Informative)
(...goes to books to make sure it's the right number...)
And that's with my shoddy economies of scale. I can't even imagine where the RIAA gets this kind of thinking, but I guess they gotta do what they gotta do to keep up with the price of cocaine, right? Can't imagine the weak dollar has helped them with their fine imported Columbian stuff.
Re:#include (Score:5, Interesting)
Quantity 5,000: USD$0.91.
Quantity 10,000: USD$0.79.
Explain to me again why these fsckers cost $16.00?"
It's real simple:
+$16.00
-$12.01 (75% cut for recording label)
-$01.33 (8.33% cut for artist)
-$01.33 (8.33% cut for retailer)
-$01.33 (8.33% cut for manufacturing & distribution)
-------
$0
Cost Of Production Is A Very Small Amount (Score:5, Insightful)
Most of the cost of a CD is in the marketing and (of course) profits for the record company. Sure there are a few extras, like the pittance they give the artist, but the majority of the cost is MARKETING. This gets more and more expensive as they get more and more ridiculous in their marketing and the cost of marketing increases over time.
Another spin might be that CDs are now more expensive to produce due to all the non-redbook copy prevention measures that they keep trying to put on "CDs" now.
Pure BS (Score:4, Insightful)
This is one of the most laughable things I have ever heard.
CD prices were always higher than the equivalent cassette tape, which was much more complicated to produce and had the same production and marketing costs.
FTA: For example, when you hear a song played on the radio -- that didn't just happen! Labels make investments in artists by paying for both the production and the promotion of the album, and promotion is very expensive.
The only thing that gets played on the radio is the latest Britney Spears bubblegum crap-ola. In fact, Mandy Moore recently apologized for making such bad music [cinemablend.com]
So we have to pay for all the payola [dontbuycds.org] in getting the radio stations bribed [slashdot.org] to play the songs on the radio.
And then when a CD gets scratched, broken, or stolen, do we get a free replacement? Oh no, we have to pay the full retail cost all over again even though the RIAA wants us to think that we have somehow "licensed" the music from them.
I am glad that they are sweating, which they must be in order to be trying to play the "victim" game. The days of the Internet are here to stay, and bands can finally distribute their own music without getting shafted.
In the linked article it says that only 10% of all CD's make a profit. The other 90% of CD's put the bands into debt to the record companies, making it a really bad deal to sign a record contract. Courtney Love does the math. [salon.com]
The RIAA sounds desperate, and I hope they are -- it would serve them right.
Post-scarcity needs getting used to (Score:5, Insightful)
I do have better data for computers. I have a 1994 price guide to computers when bottom line computers, 386s cost around 1500 dollars, twice as much as a midrange new desktop would today.
All of this is stuff most readers here know. (Although I am expecting at least a few people will correct my specifics.)
What I have noticed, however, is that many people have not psychologically adjusted to this, even when they intellectually know it is the case. I have noticed this most at my work at Free Geek [freegeek.org], where often people come in, with a Packard-Bell Pentium, and explain at some detail that the quad speed CD Drive works, if you just wiggle it around first. Or that their 14 inch monitor still works, but it might blink off every few minutes. Meanwhile, we get truckloads of P-4 systems every few days.
The point is, I think many people (often older people, but not always that much older), still have a mindset that computer and electronics are rare and valuable, instead of being the mass-produced, quickly obsolete, pieces of junk they are. And I think that many of these people are honestly confused about how valuable their product is. Of course, the RIAA people know that AOL mails out millions of CDs a month (do they still do that?), and that CDs cost "under 1 dollar to make" ( wikipedia on CD manufacturing [wikipedia.org]). Of course they know these things intellectually, but I really do think they have a mindset that they are producing a rare and valuable resource, and that they aren't asking for much in that they haven't raised their prices with inflation.
Post-scarcity takes some getting used to. I consider the entertainment industries inability to come up with a more financing method that doesn't involve creating false scarcity to be one of the less harmful inabilities to adjust to a new paradigm. I consider the fact that the US political and industrial leaders really don't understand (even though they know) that the US has lost textiles 50 years ago, consumer items 40 years ago, vehicle manufacturing 30 years ago, electronic manufacturing 20 years ago and computer manufacturing 10 years ago (numbers somewhat generalized), and that all of those things are now produced overseas for a fraction of a US worker's hourly minimum wage, to be a much more dangerous symptom of the same disease.
Corporate math (Score:5, Insightful)
What are they smoking? (Score:5, Interesting)
Almost every newsagent and bookshop has a photocopier. Yet people don't commonly "pirate" books and newspapers. Why? Well, because it's cheaper to buy than to pirate. It's my reckoning that if CDs cost about £3.00 (€4.55 / $5.88) each, then it would not be worth most people's while to go to the effort of copying them. Nor would anyone think twice about buying a CD at that price. The record companies could easily afford to sell CDs at for £3.00 if they didn't spend so much pursuing failed copy-prevention schemes and paying fatcats to do nothing useful. And they'd probably sell enough units to be earning more than they were before. People would be more willing to take a gamble; if it turns out to be shite, it's not such a great loss.
Now I'm going to tell you a story. It's a sad story. About music, and greed, and the Perversity of Human Nature.
There was a bar I used to drink in once. They had a juke box in there. An NSM Prestige, played 45s, 160 selections. 10 pence a song, six for 50p., and it was always playing. Everyone who came into the place used to walk up to the machine, look at the records, drop in a coin and put on a tune.
Actually, the juke box wasn't always playing. For one hour a fortnight, it would be silent, while the man from the amusement machine hire company emptied the coin box, changed the records and cleaned and serviced the machine. And the bar was closed sometimes. But you get the general idea. It was a popular machine. It also played the records in the order they were arranged in the magazine, not the order in which they were selected (that way, it used only 20 bytes of RAM to store all its selections; which is important when your brain is a single-chip micro with just 64 bytes of RAM), and it was quite possible that you'd have to stay awhile to hear your track if there were a lot of selections from the other end of the machine to be played. That meant the bar sold more beer and food, since the Perversity of Human Nature is such that someone who has paid to hear a song will gladly spend a few pounds on refreshments rather than waste ten pence by leaving before the song comes around on the record machine.
All that changed one sunny afternoon. The man from the amusement hire company came round as usual; only this time, as well as merely emptying the coin box, changing the records, cleaning and servicing the machine, he also tweaked the price up to 20 pence a song.
After that, people just used to walk up to the machine, look at the records, and walk away again.
And the moral of the story, if you're really choking for this story to have a moral, is that if you charge too much then people won't pay it.
Re:How Ironic (Score:4, Insightful)
The fed says jack and shit about the value of my money. Price Chopper, McDonald's, and Wal-Mart are where I discover the value of my dollars.
All the fed does is set a price for new money put into the system, which is after all the Fed's job. It can't lie about the "value of money" any more than McDonald's can lie about the value of the ice scraper I bought at Wal-Mart.
Well, guess what. As society enters the information age, that means that information is [becoming] commoditized and the service value of information starts to exceed the control value. So liars who control information like Hollywood and the Fed (and Microsoft) are in serious trouble. How [ironic] it is that, unlike the service sector, they will have no pricing power as they destroy each other.
Amazing, how you can use so many words and not actually say anything.
The "Digital Age", or "Information Revolution", or even "flat-earth effect", is pretty well set upon us now. And you know what? Controlling Information is still the best way to make immediate wealth. Google makes their money allegedly enabling the free flow of information, but they control their means and methods with a zeal greater than Coke ever used for their soda formula. The Chinese are building industrial powerhouses, but they're very careful to control the knowledge of the real cost and value of their operations from anyone.
So what if you can now buy music from China, software from Europe, or outsource your Russian McDonald's drive-thru to Utah. People still need to eat, sets still need to be built, and governments will still collection taxes. The "Information Age" might be as big a shift as the introduction of the counting machine and the photocopier, but it's not as big as you think.
Re:Awesome (Score:5, Informative)
They figured out how to make them faster better cheaper. Have you seen Intel's R & D budget? Intel has figured you can make a profit in volume sales. Making lots of units at low prices can cover very high production costs. They spend lots on their product to improve the quality and value. I wish I could say the same for the RIAA who in the same time frame have not improved the number of minutes or tracks on a CD and reduced quality by over compression, loss of dynamic range, and technical problems with CD's that don't work and break things.
Q1 outlook 2007 for R & D for Intel;
Expenses (R&D plus MG&A): Between $2.6 billion and $2.7 billion. In addition, the company expects a first-quarter restructuring charge of approximately $50 million.
http://www.intel.com/intel/finance/bus_outlook.ht
If the RIAA kept up with Intel in the same time frame, they would have CD's out with the $33 price point, but would have to kept up with the times. The 8088 processor ran 4.77 Megahertz. Most current Prescott P4's run at 3,400 Megahertz (3.4 GHZ)
The 8088 had 49,000 transistors in 1978. The 286 had 134,000 transistors in 1982. The 386 had 275,000 in 1985. The 486 had 1.2 million in 1989. The pentium in 1993 had 3.1 million transistors.
Since we are looking at a time frame of "The RIAA 'Key Facts' page claims that based on the 1983 price of CDs, the 1996 price should have been $33.86." we can take the numbers from Intel's 1983 processor the 286 at 134,000 transistors and the 1996 Pentium processor at 3.1 million transistors. (Pentium II in developement at 7.5 million transistors released a year later in 1976)
In the same time frame the CD went from 8-12 tracks average to 8-12 tracks average. To keep up with technology like the computer, it would have had to go from about 10 tracks to about 300 tracks at about the same selling price. Napster almost reached that value.
Intel data gleaned from; PDF aleart.. http://www.intel.com/pressroom/kits/core2duo/pdf/
If Intel tried to continue selling 4.77 MHZ CPU chips today at adjusted for inflation prices, they too would have volume sales problems. Somebody wake up the RIAA and have them smell the coffee.