CD Prices

Anyone who has bought blank CDR and CDRW disks knows that their prices have plummeted in the past few years. I have been using CDRW disks instead of the old 3.5 inch floppies for backing up client tax and accounting files for about the past year now. I have seen blank CDRs for 25 cents each in packs of 25 and 50.

This just makes the prices the record companies charge for music CDs seem even more outrageous. As someone who has been buying hundreds of new CDs a year since they first came out, the prices long ago stopped appearing to be fair. When CDs first came out as a music format, it didn't seem strange for them to be priced higher than the vinyl LPs and cassette tapes. However, when the economies of scale kicked in, as they have long ago, it was natural to expect the prices to drop.

I happened to be reading a copy of PC Magazine and thought this column by John Dvorak hit the nail on the head on this issue. While I can't vouch for his figure of 25 cents for all of the manufacturing cost of a music CD, it is obvious that it is a tiny fraction of the $18 we paid a few days ago for the new Peter Gabriel CD (on sale at Wally World).

This kind of price gouging is why there is very little sympathy for the record companies as they complain about the various online file traders. I'll admit that I have used some of them to find obscure songs or ones that we need in a hurry (LimeWire is currently my favorite); but I still buy dozens of new CDs each month. Record executives are as oblivious to the real world of economics as are our elected rulers in setting tax policies. Just as lower tax rates result in more taxable economic activity and more revenues, lower CD prices would result in much more product sold and much less desire to download bootleg copies.

On a semi related note, has anyone else noticed how prolific the artists of the 1960s were compared to those of today? The Beatles produced a new album every six months or so. Nowadays, it's two or three years between albums for most recording artists. Is it because the quality is so much better now that it takes that much longer to perfect?

KMK
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 10/05/2002 05:04:00 PM Send this post: