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.
- A movie arguably has creative staff several orders of magnitude higher from a production stand-point.
- 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.
- 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.
- 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.
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.