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Originally posted by routermike
4) Not counting the actual case and packaging, which run about even, a mass produced CD costs about $0.02 while the casette costs over $1.00.
5) The recording companies get to pocket that extra dollar as easy profit. (Sometimes this is offset a little bit by including booklets, or special packaging, but don't think for a minute that that stuff ever raises the production costs by a dollar.) Yes, it is profit, they're not losing money on casette sales.
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I'm not in the music industry, so I have no facts regarding this, but I've got to imagine that it costs money to distribute tapes and cds right? And they want us to pay $1.00 or $.79 per song and they get to eliminate the distribution step? I realize there are costs involved with running the web based service, but it seems like it wouldn't be as much as conventional distribution. How about they make it a reasonable amount like $.25 per song and then maybe people would be more inclined to buy the music. I'm guessing that as long as there is so much profit and so little competition in the industry, it'll never happen.
On another note, I think I have a right to listen to the songs that I purchased on records and tapes that have been damaged and are no longer playable. Software companies make it pretty clear that you don't buy the software but a license to use it. Most software companies will for a small fee supply you with replacement media if your is damaged. Why shouldn't the record companies be held to the same standard. Leagally I could be way off base here, but it all sounds the same to me.
Sean