Quote:
Originally posted by Merauk_EOD
I disagree with your numbers. When you add in marketing, artist royalties, distribution, etc. the number is higher then $1. Most retail luxury products (designer clothing in particular) carry a high margin as well, does one suggest shoplifting their next Armani suit?
Even if the price of a CD was $5 people would still elect for MP3’s because free is better then $5. The issue isn’t entirely with the record companies/artists. The argument that price/profits makes it ok to steal doesn’t make it any less stealing the hot wiring a car.
PS For the record I have sure downloaded my share of MP3’s/Movies, then again I used to shoplift like a fiend when I was a kid so I am just a bad seed! |
You make some valid points, and I agree that the cost of publishing CDs needs to take all those factors into account. However, you must realize that artists don't get royalties (record companies do) unless they have outlived their initial contracts. Most bands are signed to three-record deals which absolutely rape them, giving nearly 99% of the profits (and all royalties) to the label. Artists can earn royalty fees on their second contract (or if they're smart enough to renegotiate their first), but that's a rare occurrance.
Additionally, economies of scale come into play here. Because of the ease of producing CDs and the very nature of mass-production, CDs become relatively cheaper to print the more you print of them. Any costs beyond the initial, sunk costs of distribution and recording fees are negligible. So while the first few thousand CDs may be 'worth' $15 or so in retail, the next several hundred thousand to a million cost about $1 to make and sell.
Now does this fact 'justify' stealing? No. I'm not saying it does. But I am saying that it makes stealing all but unavoidable, as it gives people quite an incentive to steal. If you keep your product selling at an inflated price indefinitely, people are going to get tired of your pricing after awhile. It's inevitable. The cost of CDs should have decreased as the medium got older (as has the cost of casettes, VHS tapes, and now DVDs), but it never did. Something's up, obviously, and people are aware of it.
I'm not suggesting that stealing is 'right' or 'wrong,' but that record companies
know what they must do if they want to reduce the rate of piracy. And yes, I believe that CDs sold closer to cost would be purchased with a lot greater frequency. If people were out there buying CDs again, then it wouldn't matter what they were downloading -- the effects of piracy on album sales would be next to nil.