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03.29.2007 (previous | next)
The world is already full of free and cheap LEGAL music

A common claim by the copyleft is that CD retail prices are higher than they should be and that they would constantly be driven ever higher if it weren’t for the fact that record labels have to compete with downloading. Statistics from the RIAA indicate that, when you divide CD units shipped by CD dollar value, the average price of a CD in 1995 was $12.97, and in 2005 it was $14.92, an increase of 15 percent. The annual consumer price index (adjusted so that the 1982-1984 values equal 100) was 152.4 in 1995, compared with 2005 in 195.3, an increase of 28 percent. The conclusion is obvious: when you control for inflation, CD prices have actually decreased over the past several years.

If you don’t like these figures because they came from the RIAA, look at this footage of REM on David Letterman in 1983. Letterman talks to the band for a minute or two and it’s revealed that their then-current album, Murmur, was being sold for $6.99 whereas other new albums tended to be sold at the time for $8.99. With a CPI of about 100 in 1983, that means that 2005’s average CD price of $14.92 was closer to the low price the band liked (equivalent to $13.65 in 2005 dollars) than the record companies’ $8.99 (equivalent to $17.56 in 2005 dollars).

Yet the conventional wisdom seems to be that CD prices are escalating rapidly. Go into a Barnes and Noble and you might see new releases being sold for almost $20! Well, that’s retail, the kind of retail where some people seem to actually feel proud of themselves for paying markups. The people that $20 new releases are intended for are the same type of people who happily pay $100 for some article of clothing that will probably end up on the clearance racks a few months later for less than $30.

If you shop around for new releases, or, better yet, not restrict your listening habits to music that was made in the past six months, it’s easy to find quality CD’s being sold online for well under $10 on Amazon or Ebay, including shipping charges. And virtually any CD that sells millions of copies will eventually show up for less than $5. That’s $5 for a brand new, sealed copy, inclusive of shipping charges. Just to pick an example, there are currently 45 used copies of the first Sheryl Crow album, most in at least very good condition, on Amazon for less than $3.00, inclusive of shipping charges. A new copy was available for $4.59, inclusive of shipping charges. Naxos has a built a successful label selling classical CD’s with a retail price of around $7-8, and again used copies can be had for much less. Although the record companies may have fought the practice of selling used CDs many years ago, they have since accepted it. If consumers want an album of legal music for less than $5, usually all they have to do is wait a little while and buy it from an Internet site like Amazon.

And then there’s the world of free and legal music available online. MySpace music, individual band sites, and most record labels offer edits, single tracks, or even entire live shows up for free. It often makes sense from a marketing standpoint to attract potential fans by giving them something for free in the hopes that they’ll buy an album for a fee. Some bands will even offer entire studio albums for free in the hopes that it will attract a live following. Even if you don’t ever want to pay for music, there is plenty of good and free music out there that can be obtained legally. With all of this legal and free music, is it really so much to ask for people to not download music illegally? And is it really so much to ask for people to respect those who want to charge $10 or $15 for a CD?

posted by Dan Britton @ 3:09 PM |

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***is it really so much to ask for people to respect those who want to charge $10 or $15 for a CD?***

Two scientific reasons:

1) Oliver R. Goodenough (2007) Why Do Good People Steal IP?, The Gruter Institute Working Papers on Law, Economics, and Evolutionary Biology: Vol. 4: Article 3- www.bepress.com/giwp/default/vol4/iss1/art3/current_article.html

2) Suspicions Confirmed! (IPcentral weblog)- http://weblog.ipcentral.info/archives/2006/11/suspicions_conf.html

Posted by: Noel Le at March 29, 2007 9:27 PM

Dan: You start out by saying:

"A common claim by the copyleft is that CD retail prices are higher than they should be and that they would constantly be driven ever higher if it weren’t for the fact that record labels have to compete with downloading."

OK now I am expecting you to show me something that actually contradicts that, but you don't.

"Statistics from the RIAA indicate that, when you divide CD units shipped by CD dollar value, the average price of a CD in 1995 was $12.97, and in 2005 it was $14.92, an increase of 15 percent. The annual consumer price index (adjusted so that the 1982-1984 values equal 100) was 152.4 in 1995, compared with 2005 in 195.3, an increase of 28 percent. The conclusion is obvious: when you control for inflation, CD prices have actually decreased over the past several years."

You have just demonstrated that, in the face of massive illegal file trading, the prices have gone down, exactly as you postulate free culture advocates say, and as you purport to disprove...

Posted by: enigma_foundry at March 30, 2007 1:50 AM

Dan, I recently moderated at Canadian Music Week and saw a very interesting presentation by Music Ally of focus groups they conducted about the topic de jour: How do you get your music? (Note the neutral "get" as opposed to "buy" for it would be a very short study otherwise.)

All but the oldest (looking) member of the focus group panel said the same thing about album sales (which is what you're talking about when you talk about CDs). They buy the single on iTunes and if they like it, they steal the album on eMule, Limewire or some other pirate den. Not because they think the CD is too expensive, not because the album isn't available on iTunes, not because of interoperability, not because information wants to be free and not because the Devil told them to do it...they did it because they can get away with it and they don't see anything wrong with stealing.

I would suggest to you that there are two things that keep people from stealing: One is the voice of their mother, father, priest, whoever was their moral tutor as a child going off in their head telling them the thing they are about to do is wrong whether anyone else knows it is or not. This is the same voice that keeps people from murdering each other, dates from Plato's Republic if not the discovery of fire, and is generally what keeps societies more or less in line.

The other thing that keeps people from stealing is the notion of swift and certain punishment--a notion that fails when mobs rule.

It is very clear that both of these brakes on illicit behavior have failed in the case of illegal downloading, and we must truly question what it is in the moral teaching of our society that has allowed or induced these failures.

The moral teaching seems to be a paraphrase of "If It Feels Good, Do It" in the form of "If You Can Get Away With It, Do It".

In the face of illegal downloading as a way of life, the more important question is not so much whether a CD sells for a dollar or two less today than it did yesterday, the real question is where does this all lead?

What if you gave a battle of the bands and nobody came?

Posted by: Chris Castle at March 30, 2007 3:04 PM

Enigma Foundry:

I said the copyleft says "CD retail prices are higher than they should be."

Then I said: "when you control for inflation, CD prices have actually decreased over the past several years."

I don't deny that a big reason why CD retail prices are decreasing is downloading, both legal and illegal. But there are some who claim that the main reason people are downloading is that the record companies want too much money for CDs. In reality, record companies are actually charging less for their CDs than they did in the past (controlling for inflation, etc.), and there are also plenty of other legal ways to obtain music (used CDs, myspace music) they have to compete with. It's that simple. You don't have do be a free culture advocate to know that the legal price of something will decrease when it's available illegally for free.

By the way, I'm still waiting for your data showing "most smaller bands get their money from performances, not recorded music." And any evidence indicating why bands who do rely more on recorded music than live performances are less worthy of making money would be interesting to see too.

Chris Castle raises many good points. Unfortunately, when there are people out there not just condoning illegal downloading but *encouraging* it, it's going to be hard to get people to understand the effects of what they're doing. It's probably going to have to take hundreds of RIAA lawsuits. What I really hope the copylefters will realize someday is that the majority of people who are harmed by illegal downloading are small-time low-budget musicians and not just those on big labels.

Posted by: Dan Britton at April 1, 2007 7:22 PM

Dan, one of my favorite songwriters is Austin's Guy Forsyth. Guy has a lyric that sums it all up: "Americans are freedom loving people, and nothing says freedom like getting away with it."

We can only hope that Google comes to the same end as Enron. If this week's cover story in Business Week is any indication, some people may be thinking along the same lines.

Posted by: Chris Castle at April 1, 2007 9:44 PM








 
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