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Hard Day’s Night

September 26th, 2002 - 12:48 pm

PC Magazine‘s John Dvorak has words of warning for the recording industry:

When Edison first released his prerecorded cylinders, they sold for $4 each. With mass production, he eventually brought the price down to 35 cents, nearly a 90 percent reduction. If the same ratio held true with $16 CDs, the cost of which has been perpetually propped up by price fixing, they would cost $1.40. Since it costs less than 25 cents to mass-produce a CD, $1.40 is reasonable and profitable.

Of course, the industry would need to adjust from extravagance and sloppiness to frugality and normality. Less Dom Perignon, for starters. And it’s not as if record companies and artists won’t make money. 45-rpm singles used to cost 50 cents each, and it was a big deal to sell a million of them. Elvis Presley led a good life, it seems to me, by leveraging his career with those old profit margins. Heck, he was giving away Cadillacs.

It’s a matter of competition. A manufactured CD for $1.40 can compete with a bootleg copy: Manufactured CDs generally play better and come with nice packages and liner notes. The industry can still make millions of dollars, just not billions. And many artists can go back to making money the old-fashioned way

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