• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The Price of CD’s.

Extracts from this document...


The Price of CD's Many people believe that CD's are overpriced, but to look at the breakdown in the costs that are involved in producing a CD, the end price at which the CD will be sold to consumers can sometimes be justified. So what are the prices that are involved in producing a CD? Well the record company has to cover all costs not just those involved in the direct manufacturing. These include, the artist advance, the recording costs, the cost of the artists' promotional video's, the marketing of the artist and the CD (including press and PR), tour support and remixes. Although some of these costs are recoupable from the artist, in order for the record company to break-even and make profit, the CD's have to incorporate all of these costs. ...read more.


Twenty-eight states in the US filed suits against the five biggest record companies and two music retailing giants, accusing them of conspiring to fix CD prices. (Cisneros, O. 2000) When issues such as this are raised, it leaves the consumers to wonder whether the CD's are sold at a certain price to include all of the record company's and the retailers costs, or is it that the costs are not as expensive as they make out and they are in fact marking up their prices by a hefty sum to exploit the consumers in order for the companies involved to make excess profit. Piracy is a growing concern for the music industry. Record companies have witnessed a vast drop in their profits due to the downloading of music from the Internet, peer-to-peer file swapping and organised piracy (piracy on a mass produced scale). ...read more.


to rely on for profit. It can be said that the record companies are not selling their CD's at high enough prices in order to make substantial profit, and in many circumstances, any profit at all. Nielsen Media Research shows that CD sales fell by 13%, in the US, from 2001 to 2002. CD sales worldwide have fallen by 14% in the last two years. Share prices in the record companies are also falling. EMI saw their share price halved from �4 in September 2001 to �2 in September 2002. (The EMI Group, 2002) In an effort to get consumers back into the record stores, the music industry is trying an array of new sales strategies. Some new releases can be found for just under $10, while new or "developing artists" can be found for between $6.99 and $13.99. This is in addition to sales, rebates and other methods to lure the consumer back. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. Free essay

    Market Research

    Secondary Objectives: 1. Collect the previous year's accounts and financial reports for Subway, and evaluate the present situation. 2. Investigate whether there is land available to expand its property. 3. To obtain marketing data. 4. Find out the start-up costs and initial investment for the outlet for expansion. 5. To diversify the business.

  2. Sustainability in the Automotive Industry

    a company supplies a supermarket and they want a certain environmentally friendly product, the suppliers has to conform because of the scale of investment involved. Other influences such as this include customers and investors, companies will comply with what these stakeholders want because this is where their cash flow is generated.

  1. What Really Determine the Payment Methodsin M&A Deals.

    management practice since, according to various regulatory rules, an inter-state bank merger requires approval by these regulatory bodies, the announcement of the merger by bidding bank, therefore, indicates that it has met kinds of relevant requirements. In this context, share exchange in bank mergers signals positive information about the bidders.

  2. A case study of the media conglomerate EMI.

    recording system - Gramophone Company establishes Electrola company in Germany 1926 - O, for the wings of a dove by Ernest Lough is the Gramophone Company's first ever million-selling release 1927 - Columbia Graphophone acquires controlling interest in the parent company of the Parlophone label 1930 1930 - Gramophone Company

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work