Maximo J Mihelik wrote:
quoted 18 lines Hello,
>
> Hello,
>
> Jeff Waye/Ninja Tune wrote:
> >
> > Just to shed some light on the breakdown of a list price....
> >
> > -I set domestic CD lists prices as $14.99 not $16.99
> > -yes, it does cost $1-$2 in production cost depending on the packaging.
> > There is also the recording fees, studio costs, mastering, etc...
>
> This is bullshit.
>
> Actually It isn't. You think that the money for advertising, promotion,
> and everything just appears? No. you have to make that money back, jsut
> as you have to make the money from production. The cost of a CD is the
> cost of what it takes to produce, and sell it as a whole. Studio time,
> air play, promo copies, postage...
Ok, lets think about this.
Downloadable digital audio..does it make sense that the pressing and
shipping costs are cut out? I will say it slowly for you, the costs for
the physical medium are gone, this means labels do not pay pressing
costs. The other costs are still there obviously, but 2/3rd of the
retail price of a CD have nothing to do with what it took to make that
CD.
The cost to a consumer of a CD is not what it costs the label. the cost
of a cd is roughly:
1/3 the labels costs (artist fees, promo, pressing, all the stuff you
already have to pay for, exactly what you are talking about...)
1/3 the distributors fee (warehousing, promotion, shipping...)
1/3 the retailers markup (brick and mortar costs...)
I will say this slowly for you again. 2/3rds of the cost to a consumer
of a cd has nothing to do with the label, IOW the label is not seeing
2/3rds of the retail price of a CD. Once again, all the stuff you pay
for as a label is covered in your 1/3rd, the distributor and retailer
mark-ups do not pay for you to produce a CD.
A label has to pay for everything on this 1/3 of the retail cost of a
CD.
once again, it means that the label has to pay for everything with 5
dollars out of a 15 dollars CD. That means that the consumer is paying
10 dollars for the physical media to be put within their reach.
If we go to a non-physical media, like say...downloadable digital
audio...you can automatically cut out 10 dollars of the cost of music by
removing distributors and retailers. A CD only costs 5 dollars from a
label, you as a consumer are paying another 10 dollars to have this CD
brought to a store where you can buy it. If you cut out the system that
gets the CD from the label to the store, you don't have to pay them
their 10 dollar cut, doesn't that make sense?
Remember, the CD is only a container, it isn't the actual product.
If you charge 5 dollars to download the audio, you are making just as
much money as you would with a physical release, but the consumer is
only paying for the label costs, not the costs of the distributor and
the record store...that's why it costs a third as much.
Now say you charge 7 or 8 dollars to directly download the audio from
your site. You are making 3-4 dollars more per unit than you were
selling it to a distributor, and the consumer is still spending less
than he would if he bought the CD from a record store.
Obviously there are costs in the digital realm, but those costs would
still be less per unit than the pressing and shipping costs of physical
media.
Remember, the CD is only a container, it isn't the actual product.
the whole point of my post was that if you can sell your product
directly to consumers without having to go through
middle-men(retailers/distributors, which is where 2/3rds of a CD's final
retail cost comes from) you can charge more per unit, and the end
consumer will still pay less than if he had gone through the standard
distribution system. It is the whole factory direct idea, labels make
more because they are selling direct, and consumers pay less because
they are buying direct.
The technology is not there yet, digital audio is not going to be decent
until we get better resolution and bandwidth with data compression.
Perhaps some kind of anti-copy encryption, and a digital watermark is
you want to be anal. I know the digital-audio-as-a-source-of-revenue
idea is not quite ready yet, but wait another decade. We are not there
yet, but we will be. Your kids might even find the idea of record stores
kind of strange and antiquated.
quoted 7 lines I happen to run a small label, and I know.
>
> I happen to run a small label, and I know.
>
> Even these costs have nothing to do with the reason why a CD costs 15
> dollars at the store.
>
> Actually they do, he wasn't lying, and he has no reason to do so.
If he can find me a distributor that will buy my records for 15 dollars,
and sell it to a record store for 15 dollars, who will sell it to a
consumer for 15 dollars, I will fly out to his pad and mow his lawn for
the rest of the summer.
Music costs so much because of middlemen, not record labels. remember,
2/3rds of the price you pay is to get that container from the label to a
store where you can buy it.
quoted 10 lines -when you put it all together is equals a pretty significant amount per
>
> > -when you put it all together is equals a pretty significant amount per
> > CD.
>
> not really, you have been doing it on what, 5 dollars a unit or so all
> this time.
>
> The whole remainder of this message is just stupid. CDs are shitty
> quality? Vinyl is better, are you aware that CDs are 44000, and Vinyl is
> a bit more than half of that?
Vinyl still has a better resolution than those 16-bit stair steps your
ears have become accustomed to. Despite what you have been told by the
record industry, CD audio is not the holy grail of audio standards. I
personally believe that old synths, recorded on tape, mastered from tape
to plates to vinyl sound better than DDD records and CD's. We are
holding on to this antiquated 17 year old format because of money, not
because the quality of the format. Honestly, as a generation, we have
been robbed of good audio. Our grandkids will look back at 16-bit 44.1
khz the way we look back on the old "reverb and echo" production
techniques from the 50's. in 2000 we could be doing a lot better than 16
bits and 44.1. It is sad that an entire generation of music has been
castrated of its upper and lower inaudible harmonics.
There is a reason why a symphony in a good hall will always sound better
than a site recording of the same performance. 44.1 audio means that in
reality you have about a 22khz frequency response when the Nyquist
Theorem kicks in. Which on the surface of things makes sense, most of us
can only hear to 20 khz as kids, and 15 khz as adults. The problem is
that what you can't hear effects what you can hear, the harmonics
outside of our hearing range reach into the harmonics we can hear. That
is why the hall sounds better than the site recording, because all of
those overtones are present in the hall and that makes the sound richer.
22khz cuts out a huge part out the audio spectrum out, making acoustic
recordings sound less rich, and I will not even go into modern studio
equipment. It is a good thing that the newer boxes are breaking with 16
bit resolution, which hopefully we will be past in a decade.
quoted 3 lines All I know is mr ninja speaks the truth. And if you'd done a little
>
> All I know is mr ninja speaks the truth. And if you'd done a little
> research before sending your message you would have found that out.
I have read This Business of Music and more articles on the music
business than I care to admit to. As a musician of 10 years, I would
like to think I have some idea of how the record industry works.
quoted 8 lines But, I did a little for you.
>
> But, I did a little for you.
>
> cdman.com - a cd manufacturer.
> 500 CDs, jewel cases, 2 page booklet and a tray card. $889. That
> doesn't include the films for the booklets, studio time, postage,
> promotion or advertising. But I think you get the point. It's not
> cheap. Most labels are justified in the prices they charge.
you forgot mastering lab costs, paying your graphic designer, advances
and all the other fun things that come with running a label. I never
said that indie labels charge too much for records, I know the reality
of the business(I know it is a business and I know just how grim it is.)
Most of the label owners I know are really good guys with good
intentions who are fighting hard just to break even and pay their
artists. trust me, I have no illusions that indie label owners take
monthly trips to the bahamas and support coke habits on the backs of
their artists.
What I have a problem with are major labels and their distributors who
screw their artists over. the whole 12 point minus recoupables system is
a very real part of the music industry and it does not amount to much
more that indentured servitude for the vast majority of signees. Groups
like TLC went bankrupt for a reason, and TLC sold more records in a
month during their peak than I will sell in my career as a musician. The
major label and distribution system is set up to make money off of the
back of artists.
They have the system locked up from labels, to distributors, to record
store payola, to every form of promotional media Sony,
BMG,Universal/MCA, Time-Warner, and Virgin have the industry locked
down.
That system has to be stopped, and I believe that digital audio is the
way to do that. It strikes me as being the most equitable way to
distribute music while allowing the most consumer friendly avenue to
purchase music. I am sure Jeff from Ninja Tune has good intentions, and
I was wrong to take that tone with him, but the fact remains that the
industry is rotten. It is set up for the most part to gouge the artists
and the public, and that is wrong. The artists should be making more
money and the public should be paying less for music. I think
downloadable digital audio is the best way to accomplish this.
I respect labels that do 50/50 profit splits, or 20 percent off the top,
but the vast majority of the industry is not set up this way. It is set
up to screw artists, and that is a fact, that system needs to change. It
is not that I think profit is a horrible thing, I just do not believe
you need to screw over other people in order to survive. A 12 point
major label deal is prostitution is every sense of the word.
I will not be pimped by the record industry, and I do not think this
should happen to any other artists. One day there will be a system where
artists and labels can deal directly with their fans and make money from
it. I believe that is the ideal system, and it is what we should be
shooting for as business people/artists.
mt
--
Michael Taylor : Chrome3@ix.netcom.com
http://homes.arealcity.com/Intermodal/index.html
http://www.mp3.com/TheMSProject
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