At 08:23 PM 7/24/96 -0400, Duncan Frissell wrote:

At 10:26 AM 7/24/96 -0800, jim bell wrote:

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Isn't it odd that when music is sold, CD's are MORE expensive than cassette tapes, even though you _know_ that the manufacturing cost of CD's is less?

CDs sell for more because buyers decided that they wanted a wider range of titles with shallower sales (hence higher unit costs) rather than a narrower range of titles with lower sales prices. The number of CD titles available is far greater (in general distribution) than the number of vinyl titles that were available during vinyl's peak year. This greater availability of short run pressings raises average unit sales costs justifying the higher prices. Had the market decided (when physical production costs fell) that it was satisfied with a Top-40 CD stock, average CD prices would have fallen to vinyl levels.

I'm afraid that quantitatively, this is utter nonsense. A relevant data point is the fact that for about $1000, anybody can have 1000 copies of a custom CDROM manufactured. That, by music industry standards, is an EXCEEDINGLY low production run. The difference in cost between such a CD, and one made in quantities of 100K to 1 million can't possibly exceed 90 cents or so. While the early days of CD's were marked by lack of capacity, it is obvious that if the pressing plants are now accepting orders for pressing runs of 1K or less, there is plenty of capacity left in the industry. The extra manufacturing cost for those extra titles certainly can't be found in the cost of production. So how about record stores? Are you suggesting that the fact that there are "too many titles" are somehow increasing costs so much that $8 vinyl turned into $13.95 CD's? But how can this be? CD's are physically smaller than vinyl records. Cheaper to transport and store, and cheaper to display. And they are certainly not more expensive to advertise! No, the number of titles available has essentially NOTHING to do with the price. I'm truly astonished that you would think this to be true.

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Another oddity: The price for a blank, standard-quality videocassette is about the same as that of a blank, standard-quality audio cassette tape, despite the fact that the volume of tape included in the former is probably about a factor of 10 higher.

Materials cost is a minor part of total cost.

In both cases, the cost of production is a small part of the cost of goods sold. Almost all of that cost is the cost of marketing (as with all mass-market products in a modern capitalist economy.

Then why is it more expensive to market a cassette audio tape, over a videocassette?!? Jim Bell jimbell@pacifier.com