Conference cookie::notes$archive:cd_v1

    I'd split the order and hope for the best. It seems far-fetched
    to think prices would RISE, so you have nothing to loose. You also
    get to double, triple or whatever the number of exciting moments
    when THE PACKAGE arrives.
    
    Do the catalogs make mention of the whether the discs come in a
    jewel box or those abhorrant cardboard sleeves? :^( I'm still boy-
    cotting "Around The World..." by Prince (the only disc I know of
    with cardboard). 
    
    
    Edd

        There is a new CD plant in Kings Mountain, NC, as a joint venture
        of DuPont and Phillips. It is expected on-line this fall and
        should DOUBLE the US production capacity for CDs. This should
        make prices fall, but maybe not in your time-frame.  BTW, this
        plant uses all DEC gear!
        
        dp

    I doubt prices will drop much if at all.  The record companies have
    us under their thumb.  First they conviced the public to repurchase
    their record collection in digital or half-speed versions, and now
    are doing it again with CDs.
    
    The only reason record companies would lower prices is if people
    started getting tired of being ripped off and got more selective
    in purchasing CDs. 
    
    I suggest that instead of blowing big bucks on recordings you already
    own, upgrade your cartridge, turntable, and pre-amp.  Buy records
    which are usually 1/2 the price.  Old ones and cut-outs are even
    less.
    
    I'm not being anti-CD, just anti-screw-the-yuppies/consumers.
    
    Mark
    

    The best turntable deal I know of is getting an AR EB-101 from Wide
    World Electronics in Natick for ~$240.  This is an honest audiophile
    low-end table.  They used to stock them, but now you have to order.
    
    A really good book of reviews on turntables, tonearms, and CD players
    is HiFi Choice.  This is a British collection of reviews that Audio
    Vision in Arlington carries.  They pick the AR EB101 as one of their
    best buys.  The other is the Systemdek IIX, but it can't be found
    at discount prices.
    
    HiFi Choice has lots of measurements AND LISTENING reviews.  The
    quality of British main-stream audio magazines is far above
    Audio/Stereo Review/Hi Fidelety.  So far above, that they really
    don't have any audiophile magazines - all their magazines are
    audiophile but with emphasis on high value for the money.
    
    If you want something better than the AR, the next step is to
    spend about $500-$700 for a used Linn Sondek with arm, or $900 on
    a new VPI table and $200+ on an arm.  A step down would be a Dual
    505-II which lists for $200.
    
    Cartridges are tougher.  A low-end Grado for about $20 is supposed
    to be the bargain of the decade, but there used to be hum problems
    with the AR turntable which may be solved by now.  Natural Sound
    carries them and could advise or refund if problems.  With the AR
    turntable's quality, it could handle even $200-$300 cartridges
    (consult with Natural Sound on selection).  A limiting factor would
    be the quality of your electronics which would make an expensive
    cartridge a waste of money.
    
    Make sure Natural Sound or a competant audio store correctly mounts
    and aligns the cartridge.
    
    
    I have to admit that CDs are far more convenient.  Especially with
    fully manual turntables like mine (and the AR).  And CDs can play
    a long piece without interruption (like long synth stuff or even
    Alman Bros Moutain Jam).
    
    Mark

    It may be far-fetched, but CD prices ARE rising slightly.
    Warner-Elektra-Atlantic just raised their wholesale prices about
    $0.50.  What is balancing this is that retailers are lowering their
    margins on CDs as sales begin to level off, and are starting to
    have sales.  Sale prices on CDs can approach the best mail-order
    prices, making it not so advantageous to mail-order nowadays.

    Besides the new US plant doubling US production (not hard to do),
    the Nimbus UK plant is doubling in size and expects to be up in
    June.

    As long as the world CD production capability lags behind the demand
    (the current state of affairs), the distributors have no incentive
    for dropping prices.
    
    Even when production capability catches up, I expect that the world
    CD cartel (like OPEC) will attempt to hold prices up so that everyone
    makes lots of money.
    
    It won't be until some renegade distributor/publisher decides to
    lower prices to grab a bigger market share that we'll see substantially
    lower prices.
    
    -- Ward

You can get that $2/disk saving right now by shopping in local
stores and only buying when they have a sale.

For example, Lechmere's has an almost perpetual sale in the CD
department, as well as one of the largest selections around.  (At
least at the Manchester store)

    	The last reply was very interesting.  I understand that silence
    can say alot by itself.
    	Getting back to the topic,  I noticed that over the last month
    CD prices have gone up.  The average price seems to have gone from
    around $11 to about $15.  Some of the reasons are that demand has
    outstripped supply, as I'm sure you're all aware.  And some of the
    notes mentioned that new facilities are coming on line.
    	Also I hear that some of the plants in Europe are being unionized
    which inevitably drives up cost.  On top of that I understand that
    there is an import tariff being slapped onto the CD's now when they
    come into this country.
    	I expect prices to remain high until the new US plants come
    online thus bypassing some of the import tariffs and increasing
    supply.  Also I just read that the South Koreans are coming online
    with their own CD plants and you KNOW how competitive they've been
    getting.  That plant won't be online until next year.
    	So my guess is that CD prices will remain high until at least
    mid to late summer.  Then over the next year prices will come down
    due to the increased capacities and shrewd customers like all of you
    out there.
    	As for what to do now, buying the tapes and LP's seems a good
    idea.  The prices sure are cheap and I have a tape deck in my car,
    a tape deck at home and a walkman.  So I'll just take advantage
    of the sales until two summers from now.

    Ron Goodstein    

    Where did you see average prices for CD's at $11.00 in the last month??
    The majority that I have seen have been in the $15 range for the last 3
    months that I have been buying them and the 6 months previous to
    that when I was checking things out.  It wasn't until after Christmas
    that I saw some places offering $12 sale prices. 

Prices where I shop seem to be up about $1.00 for new arrivals.  Might be the
dollar drop against the yen and DM.

    A manager at Lechmere told me that prices are going up about $1.00.
    Some people are blaming this on compitition from the computer industry
    using up a lot of capacity for software, databases and text. The
    last 3 disks I purchased were about a dollar higher.

    pj
        

RE: .1

I don't yet own a CD player or any CD's, but the comment on cardboard vs.
jewel box I find interesting.  Interesting, because just last night I was
pondering how much of CD cost is the packaging.  And how CD's could potentially
save resources over LP manufacturing, especially if they used cardboard
sleeves for packaging.  Since I'm quite the ecologist/environmentalist,
as long as the packaging doesn't damage the disc then that's all I care
about.

Somehow, though, I doubt that that was what was on Prince's mind.


				Mark

    I think that the cardboard sleeves would be more prone to scratching
    the CD than the jewel box.  Unless a better alternative comes along,
    I'll vote for the jewel box...
    
                                 Roak
    

    RE: .16
    
    How would cardboard save resources over plastic?  The raw material
    for plastic comes from the fractions of crude oil not used for fuel
    production.  More cardboard means taking out more trees.  Besides
    I thought that all ecologists/environmetalists were out to save
    the trees :^).

    
    last night - Stereo Review (or was that Audio? or ...) had the latest
    CD transporter in the 'What's New' section.  A velcro fastened wallet
    that held 12 CD's in little sleeves.  Just pack'em up put em in
    your pocket and sit on 'em...
    
    						.dave.

    SR it was. What a way to get you to replace CDs like you used to do
    with your warped or worn LPs. Whats next, replacement laser styli? 

RE: .18

Trees are a renewable resource; petroleum is not.  Paper/cardboard (unless
specially treated) is bio-degradable; plastic is not and in fact has been
shown to be a major polluter.  Since this isn't ECOLOGY.NOT, I won't go
into any more detail, and I'll justify my having made a response by asking
another question:  Why does it matter, since CD's are supposedly "indestruct-
ible"?  Also, the chemical make-up of plastic changes over time, so I wouldn't
assume that plastic boxes can't harm the CD's.

				Mark

    Talking about plastics changing over time...
    
    Is it true that the plastic in CDs will allow enough oxygen through
    over years to oxidize the aluminum with the pitts?  Thus the lifetime
    of a CD is perhaps only 5-10 years?
    
    Then again, volitile elastomers in records only last so long too...

    re .20
    
    As you know, there have been record and stylus cleaning kits for
    quite some time. Now there are cd cleaning kits. What we shall se
    next is laser cleaning kits. After all, who wants to play a cd with
    a dirty laser?

    Your CD player's manual contains instructions on how to clean the
    laser assembly if needed.  I think that CD cleaning kits are a waste
    of money.
    			Steve

    WHO MENTIONED ANYTHING ABOUT THE LASER ASSEMBLY? HAVE YOU EVER TRIED
    TO CLEAN A BEAM OF LIGHT WITH A BRUSH AND FLUID?

    Getting back to the price discussion:
    
    "According to a statement from Digital Audio Disc Corp. (the former
    CBS/Sony plant in Indiana), the cost of manufacturing a CD dropped
    by a whopping 40 percent during 1987.  Although part of that reduction
    was achieved through more efficient production, the rest of the
    price drop was attributed to competitive pressure -- that is, to
    the the fact that CD-pressing capacity now exceeds demand.  A producer
    who wnats to turn a master tape into a CD can get it done quickly,
    and can shop around for the best deal.
    
    That helps to explain the recent surge in CD releases,... but one
    mystery remains: now that CDs cost only a dollar more to manufacture
    than LPs, why are they still priced twice as high as LPs at retail?
    As far as I can discern, there is no technical reason.
    
    ... Now that most of the major labels have begun pressing CDs
    inexpensively in US plants, the "normal" retail price for a new
    CD ought to be approaching the $10 level.  Why are people still
    paying $15 in many parts of the county?  The answer seems to be
    inertia: having paid that price when CDs were scarce, customers
    are still willing to do so.  CD prices will drop when customers
    begin shopping aggressively for better deals, turing to mail-order
    suppliers if necessary.
    
    Meanwhile, record companies are earnign vast profits from CDs. ..."
    
                                                          Peter W. Mitchell,
                                                          The Boston Phoenix
                                                          February 12, 1988
   

    
    I don't know about the suckers who are paying 15+ for a CD, but
    that certainly won't give the disk companies any incentive to lower
    prices.  Places like Strawberries have sales all the time selling
    disks in the 11-12 dollar range.  Oz mail order standard price for
    a CD is 13.99.  And that will drop this year by a buck or 2.
    
    I store up my CD requests and buy $100-$200 at a time when on sale.
    
    Regards, Jim
    

>    That helps to explain the recent surge in CD releases,... but one
>    mystery remains: now that CDs cost only a dollar more to manufacture
>    than LPs, why are they still priced twice as high as LPs at retail?
>    As far as I can discern, there is no technical reason.
>
>    Why are people still
>    paying $15 in many parts of the county?  The answer seems to be
>    inertia: having paid that price when CDs were scarce, customers
>    are still willing to do so.  

Yes, and on the other hand why SHOULDN'T CDs cost more at retail than vinyl?
CDs are more durable, sound better, and are easier to store and 
play than vinyl.  These factors will keep the price premium on CDs up
until vinyl is phased out.  (Of course, when vinyl is phased out,
there won't be anything to compare the prices to, and the term "premium"
will no longer apply.)

I expect to see CDs maintain a 40%-50% retail list price premium over vinyl
for the next few years, with a somewhat lower premium at most volume outlets.
Is the current list price for most popular records about $10?
Then look for $14-$15 CD list prices soon.  (CDs seem
to come it at about $16-$17 in the no-discount stores.)
Do volume outlets (Tower, Strawberries, etc.) normally sell new vinyl
at 20% off list?  Then look for comparable CD prices in the $10-$12 range.
We seem to be there (or near there) now, at $11-$13 for new releases
at Lechmere, Newbury Comics,  etc.

- tom]

PS: It is said you can make a parrot an economist if you can teach him
to say "Supply and Demand! (Squawk!) Supply and Demand!

Toby Mountain, who does the mastering for Rykodisc, wrote an article in the 
Feb. 88 issue of "Electronic musician" regarding the costs for putting  out 
your own CDs.

OK, assume you have a master mix of your album on PCM tape.

     Cost of making a repro master to use in CD production:  $500!!!
     (So much for higher mastering costs....spread $500 over 10,000 copies)

     Cost of printing up the liners, quantity 1000 (i.e. small)..$1 each 	
     !!!

     Cost of making CD, printing label on CD, inserting disc and liner into 
     jewel box (includes cost of jewel box; quantity again 1000) ... $2.50 !!!!

Bottom Line....the manufacturing cost of a CD is under $4 even in very 
small quantities.  Since the costs of recording, promotion, etc. should be 
shared with the LP and cassette releases, a list price of $14.98 is price 
gouging.  Period.


     					Brian

And even if the extra money was going to the artists I could talk myself
into saying that's okay. But we know the artists don't reap the windfall...

    I agree with .29 that discs are over-priced, but I think it might
    be more fair to list ALL the costs that go into the retail cost
    of a disc.
    First, the cost of recording, promotion, etc. DOES share a heavy part
    of the retail price.  I believe CD now outsells vinyl and might
    even be close to cassettes.
    Secondly, song writing royalties (are they still about 4.5 cents
    per song per unit sold?)
    Thirdly, performer royalties - Bruce, Michael and the other biggies
    probably make about $1 per unit sold
    Then there's the overhead involved in running a records division
    like CBS and Polydor.  I think I read that the Indiana CBS plant
    cost $38 million to build.  Then you have to pay everyone on your
    payroll (including the IRS), pay mortagages on the buildings that
    house your employees, pay the necessary expenses that come with
    employees and buildings, and have some earnings left over for the
    stockholders.
    The last two groups to add the to price are the distributor and
    retailer.  They also have employees and buildings (or rented space)
    and also have to show a profit to keep from going under.
    
    Please note that I'm not criticizing note .29.  I think the above
    generalities should be added to the generalities in .29 to see the
    picture better.  In the case of a single musician who has no employees,
    distributor, retailer, or expenses, it'll take him a lot longer
    than a year to sell 1000 CD's at gigs.  The profits he makes will
    probably help him get a little newer car to get him there.
    If any of the assumptions are unfounded, please add some notes so
    we can get a better idea of what's behind this CD business.
    
        Marty
    

    
    Re: .31
    
    Yes, I agree there is overhead.  That's why a record that cost about
    a buck to manufacture lists for ten dollars.  I was pointing out
    that since it costs less than $4 to make a CD in small quantities,
    at the numbers the majors are dealing with, tens of thousands, the
    cost is probably about $2.
    
    Now if you allow the rule of thumb that you pass on 100% overhead
    to every dollar of manufacturing cost, then CDs should only be about
    two dollars more than LPs.
    
    All of the other stuff, royalties, promotion, etc. applies equally
    to *all* formats.  So if the difference between manufacturing cost
    and list price is about 9 dollars for LPs and cassettes, how do
    they rationalize charging about *14* bucks extra for a CD????
    
    I would also mention that the record industry is pricing itself
    out of business as far as I am concerned.  In the mid-seventies
    I bought an average of 6 albums a week.  After I got married that
    tapered off to about 2 or 3 per week.  Now that CDs are here, I
    buy on an average 1/2 an album per week.  If you look at 10 years,
    that's a loss of sales of *1040* albums, for me alone.  Now what about
    those people who buy only one or two albums a year and have maybe
    20 or 30 albums in their collection???
                     
    BTW, perhaps I am more skeptical because of the royal screw job I
    got over quad.  The industry has been declining artistically for
    years and now is adding insult to injury with pricing.
    
                    
    					Brian_dissatisfied_but_stuck
    
    
    

    Re: .32
    Good, valid point.  Now that CD's are up there as a top selling
    format, it makes sense to expect the retail price to fall and
    level out.  I rarely spend more than $13 on a disc and usually less
    than $12 (aggressive bargain hunter).   In order for the industry
    to maintain that $16 retail price, consumers like myself must be
    in the minority.  Of course, even if prices drop soon, I'll still
    be out there searching for a lower price.
    
      Marty
    

I repeat, CDs warrant some premium in price over vinyl and cassettes.
Whether we argue over 50% or 5%, the objective factors of better
audio specs, better durability of the medium, ease of play, ease of
storage, etc. mean that CDs are worth more than equivalently programmed vinyl.
If that's not true, why would anyone switch to CDs at all?

"Cost" is just one component of "price."  "Profit" is a "cost."
(Why is it okay for artists to gouge us, but not record executives?
Both are an essential part of mass media business.)
"Charging what the market will bear" now connotes gouging, but in neutral
terms indicates how consumers value a product.
Why do videophiles pay more for Beta VCRs than they do for VHS?
Because they perceive better quality and are ready to pay for it.

Only consumers can drive the price down.  The industry has its own "Laffer
Curve" for products, just like Reagan has for taxes.  It's related
to price elasticity.  If a 20% drop in price leads to 40% greater sales,
then if the original margin was enough to cover the drop, a seller might
make more money in the end.

    I think another factor is the development costs.  As an example, take
    computer software.  How much does a floppy disk cost to produce? Does
    it warrant software prices of hundreds of dollars?  How much of a
    mark-up is that? 
    
    The main drive is probably supply and demand.  If people really wanted
    to make the prices go down, they would switch to the vinyl. Look how
    easy it is to pick up something on vinyl for around $5. 

    I've been reluctant to get into CDs because of the price of software.
    
    It's obvious that the suppliers are suckering the public for everything
    they can get out of them.  With a massive production-capacity glut
    for CDs, the low production costs, and the number of units they are 
    moving I see no reason that the prices are as high as they are.
    
    Even if I get a CD player, I'm likely to stick with LPs for many
    years to come because I like to experiment with new music, and I
    certainly won't do that at inflated CD prices.
    
    I was killing some time in a CD department the other night and was
    shocked that some of the music I was interested in picking up was
    going for $21.00!!!!  The CDs in question were John Cale albums
    on Island records, single disks.  To check out whether this was
    pervasive, I looked at a couple of non-mass-market disks and ran
    into the same pricing.  I can't see how this pricing can be justified
    at all.
    
    I'll probably end up getting a CD player at some point soon, because
    it won't be long until the record companies won't issue new material
    on LP.  There are a couple of "budget-line"(scoff!) CDs I would
    like to replace some of my older LPs with.  I don't argue that CD
    is not without its advantages, but I'll continue to support LP as 
    long as possible until the record companies (and consumers!) get a 
    little bit of sense on the pricing issue.
    
    - Dave

    Import discs, like the vinyl versions, will always be priced above
    regular retail prices. How much of an increase will largely depend
    on the point of purchase. I have been buying c.ds for about three
    years now and have seen prices drop considerably. If you are at
    all patient and shop in stores with fair pricing, such as Newbury
    Comics, it is possible to purchase c.ds at a real reasonable, IMO,
    cost. Most top 50/100 releases within a month of issue will wind
    up sale priced @ or below 11.99. Older catalog material has been,
    in many cases, reduced to a mid-line price structuring. This can,
    in most cases, result in an average price of 9.99, or lower when
    bought in conjunction with a store initiated sale. I find it rare
    to spend more than 10.99-11.99 for a new release, and have recently
    picked up
    Van Morrison- Moondance
    The The- Soul Mining
    John Coltrane- My Favorite Things
    T-Rex - The Slider
    
    These were all priced @ 9.99 and below. When you consider the extended
    life expectancy of the discs, the marginal price increase over vinyl
    seems fairly insubstantial. In some cases it is possible to buy
    single c.ds containing the material from two catalog release by
    an artist. In these instances the cost per album is actually lower
    than the vinyl. There have been, however, some recent import c.d
    regulation changes which will increase the difficulty of finding
    these titles. This situation is covered briefly in the latest Rolling
    Stone. The high price of the Cale discs could hardly be called the
    norm for imports. I have found most import discs tend to run aprox.
    3-4 dollars over the standard retail price, for instance just recently
    I picked up the Swedish import of "Mirror Man" by Captain Beefheart
    originally on Buddah. It was priced at 16.99. Actually, I'd be
    interested to hear where the John Cale discs are available, as they
    are pretty hard to locate and given recent developments could become
    even more scarce.

    re: .36
    
    I would think that experimenting using CDs would actually be less
    expensive than on LP due to the CDs inherent re-saleability. Lets
    say you buy a typically sale-priced CD at $13 and decide you don't like
    it. You could sell it for $10 and be out only $3. Now what do you
    do with that $6-$9 LP you don't like?


    Ken....
        

    
    The big problem with imports is that in many foreign countires CDs
    cost more than they do in the US, so by the time you add the cost
    of importing it's no wonder they cost so much.
    
    Roundup Records, a major mail-order supplier of alternative music,
    recently dropped Japanese LPs from their line as they discovered
    that current yen/dollar ratios would force them to sell the *LPs*
    at over $20 apiece!!! 

    

    Another problem with the imports is the reluctance of record
    companies to allow the import of titles they feel will diminish
    the subsequent sales of domestically released versions of the same
    titles. I'm not sure how they expect to accomplish this "embargo",
    but until they make up their pinhead corporate minds concerning
    domestic release of catalog material they would rather not have
    the disc available at all, thus assuring future sales if and when
    they get around to making the titles available. This is just
    some of the latest evidence that record company executives, are,
    for the most part, the lowest form of life known to man. Second
    only to television evangelists, of course.

    RE: .40, how the embargo on certain imports is accomplished
    
    At least in one case, CBS threatened lawsuits & other punitive actions
    against Tower Records if Tower didn't remove certain CBS imports off
    their shelves.  (I'm reporting this from memory of a salesperson's
    explanation, corrections welcomed...) 

    RE: John Cale
    
    These disks were spotted at the Harvard Coop.
    
      "Vintage Violence"
      "Slow Dazzle"
      and a couple others I can't recall
    
    - Dave

    RE: .36 (Dave)
    
    Concerning the high price of CDs: Compared to the comparable LP
    release, the CD release of the identical album is certainly not
    a good value for your dollar (ignoring for the moment arguments
    based on the longevity of CDs). However, (and I'm speaking here
    as someone who listens primarily to classical music - the situation
    in pop may be different) many CDs tend to have significantly more
    music on them than LPs. In my collection I'd say at least half (I
    think it's probably more than that) have between 55 and 75 minutes
    of music on them. LPs with 50 minutes of music on them were and
    still are pretty rare. In addition, some record companies (RCA and
    Phillips) have chosen to add music to CD reissues of classic LPs.
    For instance, RCA's CD version of the classic Reiner/Chicago Symphony
    recordings each contain more than 60 minutes of music. Phillips
    reissued a record by Bernard Haitink of some orchestral passages
    by Wagner that including a recording of the Siegfried Idyll (about
    18 minutes of music) that was not on the original LP. Most of the
    more recent original issues in classical music seem to be significantly
    longer (50+ minutes) than the average LP release was. So it ispossible
    to get good value for your money if you pay attention to what's
    on the CD.
    
    -Rich