Tuesday, March 25, 2008

Ten Dollar CDs

Walmart is at it again.


They want the Music cartel to lower their prices so they can move more product and not lose money on the products on the shelves. Normally I have a hard time with some of the high-pressure tactics that big businesses take pushing each other around -- but in this case, I gotta ask a few questions that have rather difficult answers. Maybe I just don't understand.

If I walk into about a half dozen retail shops, I can usually find a decent DVD for 10 bucks or less (no, we're not talking a recent release here -- but we're not talking old Andy Griffith Show re-runs either). In other words, I can find a Movie, on DVD, for 10 bucks easily.

But go for a similar vintage CD and it's going to be 12-14 bucks -- sometimes higher.


  1. A movie arguably has creative staff several orders of magnitude higher from a production stand-point.
  2. The soundtrack -- the derivative work from the Movie for the background noise to accompany the moving pictures, has to take similar effort to the production of most CDs.
  3. The format: DVDs have to have higher production costs. The amount of data from a binary perspective on a DVD is typically 4 gigabytes, versus the theoretical 700 megabytes or so on a typical CD.
  4. The editing: Editing video chapters and movie scenes, the work to create the DVD package and so on for a movie -- all of this from my perspective is a lot harder than the sound divisions found on a typical CD.
So the bottom line from my perspective is clear -- why, if every indicator from my perspective shows that the movie production houses are not losing money shipping a CD at 10 bucks, can the record industry not do something at least at a similar rate? Maybe they need to have a movie produced about every album that an artist puts out, showing live footage as the artist performs the work. Then have the movie houses ship the product and pay the artist similar to movie stars (something I hear isn't really happening these days).

Someone out there has to have some idea why this is all out of kilter -- or, like I said, maybe there's some hidden production cost for a CD or some huge donation facility for the movie houses that's funding their DVDs on the shelf today.

Walmart is arguably the 900 lb gorilla in this game -- but maybe they're on to something with this one. And I do agree with the gist of the article -- Apple makes money with the i-Tunes store because consumers sense value paying a buck a song. The value equation seems really tilted when you compare movies versus CDs. Consumers are pushing back and saying "I don't see 14 bucks a CD as a value."

One thing for sure, though, Walmart, the 900lb Gorilla is shoving another 900lb gorilla around. Look for some serious stomping here in the days to come.

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