Re: average loop music CD price

[The Unit Circle <unitcirc@keys.com>]

> I think you are right about the competition part.  I was playing devil's
> advocate just to illustrate the additional costs involved in bringing a
> product to market.  (Also, my numbers were wrong due to a typo.  I meant 
>to
> add $1 for studio time, mastering, not $2, making the total original cost
> $3. Actually, to this must be added overhead, advertising, etc.)
> 

$1 for studio time and mastering?  Maybe if you do the recording yourself
and do the mastering proffesionally?  With a $2 manufacturing cost, you
could only be doing 1000 CDs (I'm also assuming that you are including
design and film in that because $2000 is very high for 1000 CDs). I've
seen a CD recorded for less than $1000, but not in a studio.  The
cheapest budget for a studio doing a full-length CD was $1500 (and it
sounded like it had been done on the cheap).  A more reasonable studio
budget would be around $2000.  Add another $500 for mastering.  Now your
cost is $4.50 per disc.  Now lets say you do a 1/4 page ad in Alternative
Press for your disc, add another $400.  Now lets say you send some of
those CDs out to magazines and radio stations which reduces the number of
CDs you can sell (raising the cost of each CD).

Unit Circle Rekkids (my label), ends up selling CDs to distributors for a
small percentage above cost.  Most of the actual profit comes from our
mail order sales (where we only make $1-$2 per disc anyway after postage).

The major labels spend much less per CD than anyone else, but there still
isn't an amazing amount of profit per unit their either (especially if you
factor in salaries).

> In the case of CD's vs. vinyl, the cost of CD's has stayed way up while 
>the
> cost of producing them has gone way down.  Record companies certainly own
> monopolies on particular performers.  An individual can record a CD and
> market him/herself, and keep the price down.  But individuals don't have
> ready access to the market machine like record companies do.  Record
> companies pay a high price to gain this access, which is a significant 
>part
> of their cost. They get a following for their product, and are able to 
>sell
> it at whatever the market will pay.  There is probably a certain amount 
>of
> "price-fixing", too.  I think that the many "mini-monopolies" is the 
>key.  
> 

This is a good point.  You could probably make more money on your music if
you sell and market it yourself, but you'll also sell many fewer.  I can
count the successful self marketers on one hand.

> The system works, basically.  You don't have to pay $17 for a CD.  You 
>don't
> have to pay $100+ for a Bulls ticket, either.
> 

With indie labels, you don't have to pay $17 for a CD, most sell theirs
direct for under $15, including postage.

Kevin
Unit Circle