Before MP3, there was the music CD. (Note to younger Neatorama readers: ask your parents about it. It's those shiny round discs that look just like DVDs.)
Remember those? And remember why you don't buy them anymore? Well, the music industry would like to attribute demise of the music CD sales to the rise of digital music format and so on, but what is the real reason?
This interesting report over at NPR All Things Considered explains the rise and fall of the music CD. Turns out, it's all about greed:
... At first, executives at the major record labels didn't like the new format. But they started to come around — thanks in large part to Jac Holzman, [...]
"The CD was sexy. And it would bring higher prices — from about 8 dollars for cassettes or LPs at the end of the '70s, to about $15 in the early '80s," Holzman says. "You could resell your best catalogue again. CDs were lighter and cheaper to ship, which is a big consideration."
All of that meant giant profits for the music industry in the 1980s and '90s. "The CD sold so well. And it created this gigantic boom in the industry," says Steve Knopper, the author of Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age. "And everybody got rich. And people just got incredibly accustomed to this. To the point where in the late '90s, the only way that you could get the one song that you liked was to buy the 15 to 18 dollar CD at the Tower Records."
At first, Knopper says, people didn't mind paying a lot for the new format. "You didn't hear the outcry at the time of, 'Hey, we're getting price-gouged.' Instead the public was going, 'this is much better sound.'"
The record labels promised that the price of CDs would come down eventually. And the discs did get cheaper — to make. But the labels kept retail prices - and profits - high. Jac Holzman says that was a mistake.
"It's fine to keep that up for two or three years. But the labels kept it up far too long. And I think it was a fraud on the public, and on the artists."
http://www.npr.org/blogs/therecord/2011/03/09/134391895/the-legacy-of-the-cd-innovation-that-ate-itself?ft=1&f=100
But I think part of it,too,is the whole outlook on ownership is changing. We're becoming less accustomed to owning things physically and permanently. We don't feel compelled to have racks and racks of physical CDs or tapes or records or books or movies in our living rooms. We're becoming used to paying to use them and used to having things digitally and streaming. I don't have to have a box full of tapes to watch my favorite movie anymore or a CD I can put in my walkman to be able to hear my favorite band while I'm jogging.
I bet the little one's of today's kid's will laugh at the idea of how Grandma and Grandpa actually had boxes and racks and cases of media sitting around the house or had to get in a car and drive down to a store to purchase media instead of just streaming their media on demand.
I remember hearing that of the eight or so points on a album, three or four went to the record company, the artist got maybe two and the others were divvied up between companies like Sony DADC (which makes the disks themselves.)
Once, I took a tour of the Sony DADC plant in Indiana. The PR/Tour Guide said "Well we can't tell you how much it costs to make a disk but it's less than a dollar."
Now, figure that against a $15 CD, which costs fifty cents to make and the label is getting HALF of the profits and the artist is the one really getting screwed in the deal.
The bands that were initially successful in the Napster vs Metallica ordeal (downloads vs artists) were artists who realized they were getting screwed by labels and either started their own (in the case of MANY punk rocks groups) or put their music out for the public to get and made their money on touring.
(aha!)
http://www.negativland.com/albini.html
http://www.salon.com/technology/feature/2000/06/14/love
Artists still get charged "breakage", they don't own the publishing rights to their catalogues, the guy who made basically all the money from "Dream on", by Aerosmith is a lawyer, etc.
The only people not making money on album sales are the artists.
I remember reading in the late 90s when mp3 was just starting to appear about how it was going to kill the CD. The article quoted music exces saying that the price of CDs were justified because of the cost to make the CD (~$2), burn the CD (~$3) and ship it. The exec actually said it cost them nearly $4 to ship a single CD. At the time you could buy a 50 pack of CD-rs with cases for ~$25 and USPS media mail was $2.65. I though I could do well just by heading over to CompUSA to pick up the blank CDs and sell them to the labels or take over their shipping by just using USPS.
Loudness war: http://www.npr.org/templates/story/story.php?storyId=122114058
Google: loudness war (and check the article from NPR)
I'm gonna go rip all the CD's I can find at my local pubilc library. Screw the record guys.
My impression was that the article was pure speculation as the author wasn't present in any of the record company board rooms to know what decisions were being made and certainly didn't present any numbers that back up his particular claim. If I were to make a WAG it would be that apprehension about emerging tech, new mediums and the business models needed to support them were also integral in keeping their bread'n'butter CD market pricing high as they were probably unsure of what resources they'd need to make the transition and remain profitable.
Anyway, it was inevitable for the CD to be replaced by other mediums and looking at this in hindsight shows that aggressive pricing for that mearket most likely brought in more revenue than if they had lowered the pricing sooner.
Take a note of what the article said an LP cost; if he's right, they essentially doubled what they were trying to get and it just couldn't hold up forever. People don't like getting boned. And now there's alternatives that are viable, so people pursue them.
There's also the ease of use factor; I have 30ish gigs of music on my PC, with a decent soundcard and speakers. I can just let her start playing and not have to change disc. I can rip it to my MP3 player, and take the whole collection when I go on a trip. No searching through hundreds of disc to find what I want or anything. It's wonderful.
Also, this article made me feel old :p