questionswhy are mp3s more expensive than cds?

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vote-for24vote-against

They will charge it because people will pay it! Some may assume it's cheaper, but most probably don't care.

vote-for7vote-against

It's such a small amount that most people won't care and would rather have it instantly.

For me though, I don't buy entire albums. I purchase one or two (or maybe three) songs.

vote-for1vote-against

Because if you loose or scratch your CD you are out of luck but with the online places they store you music for you so you will never loose the disk or break it. I never buy a whole album unless it goes to $5 or less.

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@zapp brannigan: Your reason makes no sense. You can just upload the album to your hard drive.

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Amazon doesn't constantly give away free credits that can be used to buy CDs.

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@samstag: That's another thing - they even gave me $1.00 in MP3 credit to buy the CD?!?!

vote-for7vote-against

I know that Amazon and iTunes take a big cut of the sales. More than what the box stores take. That may be a factor?

I tour with bands, selling merchandise, and the music industry is declining. People aren't paying for music like they used to. More and more people are downloading the songs for free. Everyone in the music industry is trying to get a cut of what is left.

vote-for6vote-against

And then Google Play has the same album for $2.00 more, but they have five bonus songs?

Seriously - why does this have to be complicated?

vote-for3vote-against

The only serious answer I can think of is that it costs more to store the data on a server than make the CD but I can't really believe that is the case. Or, maybe they made too many of the CD's and are trying to unload them before everyone that wants them buys the mp3's? Neither of these seem very likely though. I think there often isn't a lot of reasoning behind Amazon's ever-changing prices.

vote-for4vote-against

I think it has something to do with the fact that you can normally pick and choose tracks from a particular album. Yes, I know we're talking about buying the full MP3 album, but I still think the OPTION to buy individual songs has something to do with it being more expensive. They can't make the MP3 album too cheap or nobody would be the higher-priced singles.

If you want the whole album, I say buy the CD, rip the tracks to MP3, and then upload them to the Amazon cloud player.

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@kylemittskus: You are not factoring in laziness that's worth a lot. I bought albums of MP3s rather than making them myself, plus my discs are all scratched up and don't work that great.

vote-for5vote-against

You're not factoring in the cost of production. It takes a lot of work to get all those "0"s and "1"s to line up in just the right way. Also, sarcasm.

vote-for2vote-against

The cost is not about the disc itself but the licensing paid to the artist, production cost of the music, the distribution, and profits to not just the recording label but also retailer as well.

vote-for6vote-against

If you sell the CD, you really should delete your backup copies (MP3) as well. You no longer have the rights to those copies. But usually this applies to older albums in a more extreme way. Used copy in good shape is $3-5, or MP3 is $10. In that case, MP3 is a guarantee of audio quality that a used CD may not be able to deliver.

vote-for-10vote-against

Quick summary on the music biz and why the recording companies want to stop piracy (and if you were them, you'd want to stop it, too).
- Artist creates music.
- Recording company pays the artist for the DISTRIBUTION RIGHTS to sell the album, say $10 million. The artist still owns the IP. Unless it's a per record deal, that $10M is all the artist will see from that album.
- The company produces the music and sells it via their distribution and retail networks. This can cost the record company millions plus the $10M ot the artist. They have to make all this money back and more.
- Piracy "robs" the companies of the revenue they would have gotten with a sale.
- The artists make additional money off the album via concerts.

Down the line with music piracy, recording companies aren't making as much so their contracts with artists are going to be lower and they'll force the artists to take a lower amount plus a per record sales deal.

So, cost of the album isn't about the plastic disc.

vote-for4vote-against

True story: tonight I'm going to a concert, and am at work in the mood to listen to their latest album. I don't have the album on my phone or computer. But, I bought the MP3s from Amazon earlier this year, so I do have access through the Amazon Cloud Player. I just finished listening to the streaming album as I ran across your post. I never thought much about this convenience in the past, but it is pretty amazing to know that I can listen to any music I've ever bought digitally on Amazon whenever I feel like it, as long as I have an Internet connection. That might be enough to convince me to buy digital over physical in the future. Maybe even for an extra $2. (If you want to call it a wash, Amazon has a Facebook linked survey today for a $2 MP3 credit and you can call it a wash.)

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@first2summit: I think you missed the point. Not arguing margins, who should get what $.

Same product, same content. But the one that costs something to physically produce and more $ to physically deliver costs less. There are costs associated with producing a physical piece of merchandise, shipping it to the warehouse, boxing it up, and shipping it to the customer.

You would hope that if they didn't have those costs, they would actually charge less, since it costs them less. Instead, they charge more.

vote-for8vote-against

@first2summit: Wow. Where did you get that info? You couldn't be more wrong.
Here is a more accurate assessment:
Typically, when recording artists sign a recording contract or record a song (or album), the record company pays them an advance that must be paid back out of their royalties. This is called recoupment. In addition to paying back their advance, however, recording artists are usually required under their contract to pay for many other expenses. These recoupable expenses usually include recording costs, promotional and marketing costs, tour costs and music video production costs, as well as other expenses. The record company is making the upfront investment and taking the risk, but the artist eventually ends up paying for most of the costs. While all of this can be negotiated up front, it tends to be the norm that the artists pay for the bulk of expenses out of their royalties.
(cont)

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(...cont.)
Let's see what these recoupable expenses do to our artist's $1,012,500 royalty we calculated earlier. Suppose the recording costs were $300,000 (100% recoupable), promotion costs were $200,000 (100% recoupable), tour costs were $200,000 (50% recoupable), and a music video cost $400,000 (50% recoupable). That comes out to:

$300,000 + $200,000 + $100,000 + $200,000 = $800,000

Suddenly our artist isn't making a million plus, he's making $212,500. But don't forget there is also a manager to be paid (usually 20%), as well as a producer and possibly several band members. The artist won't see any royalty money until all of these expenses are paid.

Taken from http://entertainment.howstuffworks.com/music-royalties6.htm

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Also, when a record company says they "lost money" on an album, what they mean is that they did not "recoup" their upfront investment, which is ONLY taken from the ARTIST'S CUT. The label makes money on every copy sold on top of the "recoupment". How else could they continue with the same business model when their own statistics say that only ~10% of all albums ever "make money"?

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It's the way the whole digital movement is going. Publishers tend to blame it on "extra features" etc that they give you with your purchase.

A lot of the music I purchase actually tends to be cheaper to buy the downloadable version, but maybe that's just because I only buy music when it's cheap.

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Plus, it's illegal (and unethical) to buy the CD, put the songs on your computer, then sell the CD again. Customers buy the right to the music, not the music itself.

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@viper2544: Did you know Amazon lets you upload your own music to the cloud player? Say you have a CD at home...rip it to MP3 and then load it to the Amazon cloud. Sure it seems like an extra step, but you have to burn a digital copy to cd or put it on your MP3 player anyway. So it might be the same number of steps, just different steps to accomplish the same thing; having a physical copy, local MP3, and cloud MP3.

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I think it's about the convenience of having your music at hand anywhere in the world, as long as it's uploaded to the cloud.

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The MP3 price will go down soon. For a little bit after release it is more expensive because you don't have to wait 2+ days for shipping. At least this was the case for the new Muse album, $11.99 at release, $9.99 a week later. Also remember that not everyone has Prime and usually basic shipping is $3.99.
Another factor is that there is a pretty low number of songs that you can upload to the free cloud player but purchases from Amazon are unlimited or at least have a much higher allowance. I know this doesn't really apply to your kids but I'm guessing the pricing works the same on all new CD/MP3s.

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The last CD I purchased was an Eminem album, I remember it was 1999 and I was using a Best Buy gift certificate that someone had just given me for my 21st birthday.

I haven't stepped foot in a Best Buy since

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Perceived value.
They can and will charge whatever the market will bear.

j5 j5
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@apocello42: The price of the MP3 will not go down. It has been determined that the market will accept $1 per song and that is the bare minimum that the market will go down to for somewhat popular music. If the market can get more, it will try to get more. My guess is that the digital version is priced higher so they can lower the price at a later date and people will think it is a cost savings. Soon we will be paying well over $16 for a digital copy of a CD that we got before for $10 with liner notes and cover art that we could hold in our hands.

vote-for1vote-against

Amazon is a marketplace, similar to eBay (without the auctions). Different sellers can sell the same CDs through Amazon. As of today, this same physical CD album is being sold new from $7.38 (plus $2.98 shipping) to $24.91 (plus $2.98 shipping). When you search for and find this physical CD album, Amazon will show you the least expensive option. The seller that lands in this coveted spot can vary from day to day. Currently, with 24 sellers of this physical CD album, there's a lot of competition, resulting in a decent price at the low end.

On Amazon, when it comes to digital downloads, there is no competition. You wouldn't have 24 different retailers trying to sell the same digital download, trying to gain your attention by competing on price. When it's the digital download on Amazon, Amazon is the only retailer. So, with lack of competition on price, there is no force driving the price down.

So, some days the physical CD album will be more expensive but many times it will be cheaper.