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5 Reasons CD's cost so much..
This
Months | Previous
antiGUY gives his
top 5 list of music stuff. Could be songs, people, a stupid trend... nothing
is sacred to antiGUY
This
Months Top 5
Top
5 Reasons CD's Cost so much.
This month's Top 5 is a little different.
The topic of the high cost of CD's has been in the news lately, with 28
states suing the record companies for price fixing. I read an interesting
article that said that CD's cost about $1.00 to manufacture and the record
companies turn around and sell them to retailer's for around $9.00. The
Retailer's turn around and sell them for between $16 an $19. Not a bad
profit, eh? We can assume that $3.00 of the markup on the CD goes towards
the retailer's operating expenses, rent, the light bill, insurance, IRS
(Maybe another $3 goes here) and the minimum wage paycheck for their employees
and the rest is profit. Ok this is business and they are in business
to make money.
This month I take a look at where that
original $9 the retailer is paying might be going to. I do not work for
a record company, so I have to take some guesses here, but this should
be a fun example.
I know this won't be a popular statement
but I have to make it. It is easy to bash record companies, stories abound
about how they screw artists over left and right. But I must say that the
people I have dealt with at record labels (publicist) really do believe
in the artists and do what every they can to make them successful.(Most
of the time). With that little disclaimer, here is this month's Top 5.
Top
5 Reasons CD's Cost so much. (where does the money go?)
5) $1.50 to make the CD and ship it to
the stores
4) $1.50 for kickbacks, bribes and promotional
expenses to get the music played on radio.
3) $3.00 to the Record Label - $2.00 profit
and $1.00 towards "Tour expenses" like record company execs Hotel Suites,
limo's, Peruvian Nose Candy etc.
2) $2.00 to make videos MTV will never
air and buy magazine ads no one ever reads.
Number
one
And $1.00 goes to the lawyer who wrote
the contract that screwed the artist out of any profit from the sale of
the CD.
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