CD price cut

I still wouldnt buy CD's. I can buy 50 CD's for $10 and burn them myself. Why would I spend $10 for 1 CD then? You can buy DVD's for $15 - $20 so you should be able to get a CD for $5. I guarantee that people would be much more eager to buy a CD if it were $5 vs $10.

 

13 dollars is still too much dumbasses.

I would start buying again if they went down to 8. I'd start buying a lot if they went down to 5.

Correct me if I'm wrong, but shouldn't cds be cheaper than cassettes?

 

why?? sure, they may cost less to make (i don't know if that's true or not)...but demand for CD's is way higher than it is for cassettes at this point.

 

Actually...that's the point. Cheaper to make (they are), and bigger production runs.

Supply and demand only drives the price up if there's a limited supply.

 

no it doesn't...demand can drive a price up no matter what the supply. it's all about what the market will bear. if people are willing to pay more for CD's than they are for cassettes, then the price will be higher.

 

But obviously people are not willing to buy CD's or they wouldnt be dropping the price. Why would anyone still be buying cassettes anyway?

 

Max, we'll disagree. What the market will bear works for a monopoly or if there's collusion. In a free market prices should be less if production costs are less.

Either that TJ's been misleading me about tax cuts for corporations and reduced cost of capital being good for the consumer.

As an aside...good move by the record companies. I'm somewhat surprised that cassettes are cheaper (haven't bought one in years) because of their limited production runs. I would think they would charge a premium for those who still wanted them, and just stop producing them if there were no buyers. Cassettes should only be cheaper if they need to dispose of already produced inventory.

 

totally agreed!!

but the assertion was made that they should be cheaper than cassettes...it was that assertion that i disagreed with.

 

i don't think there's any thing to agree or disagree on...price is a function of supply and demand...when demand is super high, prices go up...when demand goes down, for the most part, prices go down...that's what's happening here. the free market at work, and it has zero zilch nada to do with production costs.

 

right...but that doesn't necessarily mean greater revenues...the company's job is to maximize revenue...not maximize demand.

 

I would buy more of them. I've never gotten close to buying as much music as I did when records sold for 4 and 5 dollars.

I will buy more when they are less expensive. I think around $10 is much more reasonable.

 

Max, you're not getting my point! (and i'm sitting here waiting for an appointment, so i got time to kill -- bear with me on this trivial matter).

CD's for popular acts generally sell for less than those for obscure acts. Yet the demand is higher. This is generally because of volume, production and inventory costs. If I can move a lot more of a product and it costs less to produce, I don't need to make as much of a markup. And since I could produce as many CD's as I want, I can set my pricing at the level that maximizes number of units and markup.

Cassettes and CD's are two different formats for the same music. I should think that if packaging the music in Box A costs more than packaging that same music in Box B, I would charge more for the Box A. If people didn't want to pay more, they could buy the music in Box B. I found it curious that the companies continue to produce cassettes (are there still 'cassette-files' out there hell-bent on collecting taped music?) when they aren't making as much on them. To buy a record (remember those?) costs a fair bit more than a cd. I figured this would also apply to cassettes.

Just food for thought. And also fuel for those who alleged the music companies were gouging. (an allegation that led to a settlement not too long ago).

 

ok

i'm waiting on a meeting to start...i have some time to kill, too. like my thoughtful response??

 

I always like your thoughtful responses, Max. Sometimes I even agree with them.

 

i figure with over 9,000 posts here, even glynch could find something he agrees with me on!

 

Max, you are wrong on this issue. You are not taking into account the behavior of suppliers when demand and prices go up. Suppliers will increase supply at higher prices. This increased supply does impact price. In a perfectly competive environment (or an approximation, as is the US economy), marginal cost will equal marginal revenue. bnb is correct.

 

fair enough...i really didn't intend to say that supply had zero effect on price...in fact, i specifically said price was a function of both supply and demand.

my contention was that CD's should not necessarily be less expensive than cassettes merely because they're cheaper to produce.

 

I think it's great that they're going to push back the prices of cd's to the point where they're merely overpriced.

If I'm not too mistaken, 13 is roughly the price point cd's had when they were introduced and all the talk was about how they would go down from there.

CD's will continue to die as a format in an age where there are so many other options that are so much cheaper. Whether you download or not, the music industry has screwed themselfs in innumerable ways and will need a huge overhaul to remain (become again?) relevant.