What's a fair price for a CD or download ? - Progressive Rock Music Forum

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Davesax1965 View Drop Down

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Posted: January 10 2016 at 11:14

Yeah, I'm seeing a worrying trend in some bands - and retailers - beginning to creep prices up.

Fair deal for everyone is the only deal which works.

Meltdowner View Drop Down

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Posted: January 10 2016 at 11:28

Davesax1965 wrote:

Hi Logos, unfortunately, if you do that... you stop smaller bands getting the money and the fanbase to release a CD.

I don't even download free albums from Bandcamp, but no one can say I don't support small bands. There are just too many small bands that release their music on physical formats, and that's how I like to spend my hard-earned money (I added some 150 albums to my collection last year Embarrassed

). Last month I went to a local festival and two dudes around my age were selling their four track EP on cassette, so I wonder if it's that hard to make a limited run of CD's? Ermm

And speaking of small bands, here's a strange case: the Greek band Naxatras, that released their first album last year, were able to sell an "Extremely Limited Edition" of 25 cassettes for 25€ each, in a couple of weeks. That's way over a fair price, in my opinion Tongue

I see a lot of obscure Electronic artists that easily sell 10-100 physical copies of their albums (the number depends on how obscure they are Tongue

)

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Posted: January 10 2016 at 11:51

Logos wrote:

I will never pay for a download.

I assume you also don't pay for the software you install on your PC then? Most of that comes through downloads, so it must be worthless....

What you pay for is not the physical format, but the cost and effort spent on producing the music. Thanks for your part in ruining the world of a lot of people in the long run.

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Barbu

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Posted: January 10 2016 at 11:54

Cd - 15

Concert - 30

Vinyl - 89.99

Download - 0

Angelo

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Posted: January 10 2016 at 11:54

Meltdowner wrote:

Davesax1965 wrote:

Hi Logos, unfortunately, if you do that... you stop smaller bands getting the money and the fanbase to release a CD.

). Last month I went to a local festival and two dudes around my age were selling their four track EP on cassette, so I wonder if it's that hard to make a limited run of CD's? Ermm

I see a lot of obscure Electronic artists that easily sell 10-100 physical copies of their albums (the number depends on how obscure they are Tongue

)

Creating pressed CDs (so not computer burned CD-ROMS, which is likely what these obscure acts revert to) requires batches of 300 or more with most pressing factories. It can be done starting from approx 500 pounds for 500 CDs, but with extra production cost added for more than a simple inlay for a plastic CD box. Add to that the cost and effort spent on designing a proper booklet or digipack to get the complete figure.

Here's a nice example of pricing: https://pure-music.co.uk/cd-manufacturing-cost/cd-digipak-printing/

Edited by Angelo - January 10 2016 at 11:58

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Dean

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Posted: January 10 2016 at 12:37

This raises the fundamental question that Dave is alluding to, which is "how much is the content (IP) of an album worth?" - if we (mis?)interpret Logos's comment of never paying for downloads then some would say that is nothing. However, hopefully by now we have all come to recognise that there is no valid justification for illegal downloading and what he means is he'd rather pay for a CD or an LP than a download.

Since the costs of manufacturing an album (be that CD, LP or download) are fixed any discounting or variation in selling price is directly proportional to the amount of money an artist can earn from their work.

In the old days this was essentially "royalties" - once all the financial unpleasantries associated with the process of making and selling the album had been dealt with what "profit" remained was split between the record label, the artist and the song writers, with the latter two being in the form of royalty payments - the dreaded 10%. This payment was basically the value of the music after all the physical elements such as studio time, production, manufacturing and promotion had been deducted (the cost of distribution is excluded since royalty payments were calculated on the label's selling-price of the album to the distributors, not the retail price at the check-out).

In the modern era of self-release the archaic practice of royalties no longer applies but in the main the concept of "profit" also no longer applies since few self-release artists will ever recoup the cost of recording an album, let alone the costs associated with manufacturing a CD or LP. The best most can hope for is a "contribution to costs".

If we were making chairs the costings are a doddle to calculate. We add the cost of the raw materials to the cost of the man-hours it took to manufacture each chair and we arrive at the cost-price. Any money we make over that cost is pure profit. On the other hand if we were making cup-cakes that are produced in batches then our raw material costs are the cost per batch, so we could say that the cost-price per cup-cake is the cost of the raw materials divided by the number of cup-cakes per batch, however, that presumes we can sell all the cakes from each batch so we calculate the cost-per-cake on the number we think we can sell rather than the number we have made.

Albums should be like cup-cakes with the cost-price based upon the number of albums we think we can sell and not the number we can produce, so if you think you can sell 100 copies then the cost-price would be the cost of recording (say £2,000) plus the cost of fabricating 100 CDs (£618), so would set the cost-price of each one at £26.18 each, which is unrealistic. To save you from all the maths, to recoup £2,000 recording cost you would need to sell 285 albums at £9.99 each. Every CD you sell over 285 yields you £7.04 in pure profit, so if you actually sell 300 copies (i.e., £2,997 in sales) then your earnings would be £105.60.

Incidentally, to recoup that £2,000 at Bandcamp's suggested download price of $7 (roughly £4.82) would mean selling 546 downloads (after deducting Bandcamp and PayPal's commission and ignoring anything owed to the Inland Revenue). Now every download over 546 yields you £3.66 (roughly $5) in pure profit, so if you could sell 600 downloads (i.e., £2,892 in sales) then your earnings would be £197.64.

It gets more complicated when you sell both CDs and downloads since you will have fixed costs in producing the CDs in addition to the studio costs. For example if you had CDs pressed in batches of 100 and presumed that you can sell 1 CD for every 5 download sales then you would need to sell 147 CDs @ £9.99 and 735 downloads @ £4.85 to recoup the £2,000 studio costs and 2x£618 CD manufacturing costs. If you limited the total number of CD sales to 100 then selling 100 CDs and 500 downloads would leave you with a short-fall of £404.47 which would mean selling a further 111 downloads (i.e., 100 CDs and 611 downloads). However, if you were confident of selling more than 100 CDs you could get them made in batches of 200 which netts you a significant price-break of £695/200, so now you'd only need to sell 125 CDs and 625 downloads.

So to summarise:-

CD only = 285 total sales
Download only = 546 total sales
CD+Download = 711, 750 or 882 total sales depending upon CD batch-size.

Of course if you set your selling price below the £9.99 for CD, £4.85 ($7) for downloads or your production costs are more than £2,000 then these numbers increase significantly, and if your cost of production is less than £2,000 then they decrease (though quite how a band can record an album to professional standard for less than £2,000 is a mystery to me). In the real world artists that think they can sell thousands copies of an album tend to spend more on studio & production costs so that £2,000 would be £20,000 or even £200,000. However, those artists are few and far between.

So all this presupposes you can sell more than the average Bandcamp artist, and as sure as eggs are eggs, sales of 200+ per album are way above the Bandcamp average.... they are even above the industry average.

A quick reality check here: £197 profit on 600 downloads is pocket-money - selling 600 downloads is hard work that takes several months to accumulate, to make a living out of this you'd need to continuously sell 600 downloads per month every month, which equates to 7,200 albums per year and puts you in the top 1% of all recording artists.

Now if all this scares you then it should because making money out of music is a scary business. If the financial side of it causes your eyes to glaze over then stop dreaming about making money from music and get some proper financial advice.

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Meltdowner View Drop Down

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Posted: January 10 2016 at 13:14

Angelo wrote:

Here's a nice example of pricing: https://pure-music.co.uk/cd-manufacturing-cost/cd-digipak-printing/

I know some Electronic artists make editions of 20 pressed CDs. There are factories that require a lot less than that, of course it's more expensive that way. I know some local small bands that pressed their albums on CDBaby: their minimum number of copies is 100 for a bit less than 500€ (digipak, shipping included), so if they sell for let's say 13€, they get around 800€ (since they don't have to pay to labels, and in many cases the band (or a friend) make the design). It's obviously not meant to make a living, but it can cover some expenses. Besides, doesn't a band look more serious when they have a proper CD release? Smile

If I would buy digital files, I would burn them on a cr*ppy looking CD Tongue

emigre80

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Posted: January 10 2016 at 13:24

If I want a CD, I buy it regardless of the price unless it's truly outrageous - the definition of outrageous depending on the CD, whether it's an import, etc. I paid $75 for the Progeny Yes concert CD set and I didn't consider it exorbitant.

I don't download music because I don't think it's fair to the artist, who after all needs to make a living.

On concert tickets, I will get them unless the price is too outrageous if I want to see the band enough. I just checked out the tickets for Bruce Springsteen in Louisville and they were $135 each for crap seats. I don't want to see him that badly, although I do know people that would pay that.

I've seen concert tickets advertised where the front rows are $500 for a ticket. If John Lennon and George Harrison rose from the dead and the Beatles re-formed I wouldn't pay $500 for a ticket.

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Posted: January 10 2016 at 13:27

Nightfly wrote:

Dean wrote:

Amazon can make money out of selling non-top-40 albums because it is global and does not have chains of costly retail outlets, and as we have seen, the internet can only support one "Amazon" type retailer; even traditional retailers like HMV and Virgin and other online retailers such as CDNow could not compete once Amazon had established itself as the go-to place for music. CDBaby and their like survive because they are niche, but they are also very small by comparison. It could be argued that vinyl sales are a niche market that Amazon thus far has failed to capitalise on because (let's be honest here) it is a tactile product that leads to impulse buying, which is why HMV Basingstoke can stock so much of it. (Having said that, I walked out of HMV with a £9.99 CD of DBowie's Blackstar instead of the £23.99 LP because I couldn't justify to myself the extra £14 spend)

I've noticed that music prices seem have increased on Amazon over the last year or so (especially the more obscure stuff) and along with them ditching the free delivery on orders over £10 and increasing it to £20 they're not as cheap as they once were. At one time the Amazon Partners were usually still more expensive than Amazon but these days they're generally considerably cheaper. Obviously Amazon get a cut of their sales (I'd be interested to know how much) and perhaps they now feel that if profit margins are so low on Cd's it's more cost effective to simply take a cut of their partner's sales. Some Amazon Partners also have their own website, Dodax for example who are usually one of the cheapest on Amazon, usually sell Music even cheaper on their own website than on Amazon as they wont have to pay them a cut of the profits. Amazon may find themselves losing out in the long run.

Interestingly, the Bowie album you mentioned is also selling for £23.99 on vinyl on Amazon with a number of Partners selling it for £14.50 (plus £1.26 postage).

Amazon Partners sell because of their close association with Amazon, without that link they would struggle to survive, and they have to under-cut Amazon's pricing to do that. For this to adversely affect Amazon one partner would have to over-take them in terms of direct sales and since Amazon manages all partners on a divide and concur principle (all are in equal competition with each other) this is unlikely.

Like in Highlander, "there can only be one" preferred internet service in each market sector, other providers exist but their traffic is considerably less than the market leader, there is only one Amazon, eBay, iTunes, RYM, Facebook, IMDB, Wikipedia, YouTube, etc., (this is even true in niche markets such as Prog Rock review sites where the PA is undoubtedly the market leader). I first noticed this phenomenon at the end of the 20th century once internet retail took hold and nothing has changed since then to alter this observation.

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Posted: January 10 2016 at 13:39

emigre80 wrote:

I don't download music because I don't think it's fair to the artist, who after all needs to make a living.

Try bandcamp, its one of the options that gets the most money to the artist.

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Posted: January 10 2016 at 13:48

Meltdowner wrote:

Angelo wrote:

Here's a nice example of pricing: https://pure-music.co.uk/cd-manufacturing-cost/cd-digipak-printing/

If I would buy digital files, I would burn them on a cr*ppy looking CD Tongue

I can't imagine that making 20 glass-pressed CDs could ever be cost-effective because the process of making the glass master is so expensive. Suppliers that have an MOQ of 100 tend to charge similar pricing to those who have MOQs of 500 (compare your 500€ for 100 with Angelo's £500 for 500) since the bulk-cost is for the glass master not the replication. [in the parlance "duplication" means CDR and "replication" means glass-pressed]

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Meltdowner View Drop Down

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Posted: January 10 2016 at 14:28

^ I have no idea, but these limited editions are normally more expensive.

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Posted: January 10 2016 at 15:41

I was waiting for you to drop in Dean, left the term IP for you to bring in - stuck to 'time and effort' just for you Tongue

, but that was exactly what I was getting ad.

Edited by Angelo - January 10 2016 at 15:42

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Posted: January 10 2016 at 15:44

Dean wrote:

Meltdowner wrote:

Angelo wrote:

Here's a nice example of pricing: https://pure-music.co.uk/cd-manufacturing-cost/cd-digipak-printing/

If I would buy digital files, I would burn them on a cr*ppy looking CD Tongue

Sometimes advertising is useful: this discussion brought up an ad for Dutch CD pressing company. They offer batches of 50 CDs, but through what they call "DUPLICATION" - which will likely amount to using a large burning machine resulting in similar results as a CD burner on a PC.

Their motivation for offering those: if you want a really pressed CD, it's not cost effective without ordering a batch of at least 300, which you may not need... So, no glass pressing in low quantities for them at least.

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Posted: January 10 2016 at 16:23

For me it depends on what the album is, what condition it's in, and how much money I have to spend. No one rule or principle for me.

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Posted: January 10 2016 at 17:26

emigre80 wrote:

.... If John Lennon and George Harrison rose from the dead and the Beatles re-formed I wouldn't pay $500 for a ticket.

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Posted: January 10 2016 at 21:07

Barbu wrote:

Cd - 15

Concert - 30

Vinyl - 89.99

Download - 0

i would agree with this concise answer which comprehed the OP question without needlessly tittle-tattle.

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Posted: January 10 2016 at 21:17

An interesting question but one can ask the same thing about a loaf of bread, a gallon of milk, or even the price of a new car......isn't this all determined by the 'marketplace' ?

Perhaps someone with knowledge about economics can address the issue since I think food and cost of heating one's home is overpriced.

One does nothing yet nothing is left undone.
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Posted: January 10 2016 at 21:19

Komandant Shamal wrote:

Barbu wrote:

Cd - 15

Concert - 30

Vinyl - 89.99

Download - 0

i would agree with this concise answer which comprehed the OP question without needlessly tittle-tattle.

So you think all downloads should be free. Cute.

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Komandant Shamal View Drop Down

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Posted: January 10 2016 at 22:00

Dean wrote:

Komandant Shamal wrote:

Barbu wrote:

Cd - 15

Concert - 30

Vinyl - 89.99

Download - 0

i would agree with this concise answer which comprehed the OP question without needlessly tittle-tattle.

So you think all downloads should be free. Cute.

yes, downloads should be free ('name your price'), though the prices of vinyl lps must go up.