What should music CDs cost? - What should music CDs cost?

2006-04-03 11:30

"Bruce Springsteen's not short of cash," a friend of mine would say. "He can afford it if I burn this CD and listen for free."

Problem is, Bruce's record company would say that it's not Bruce who's losing out (he makes big money from live tours), but rather the smaller artists who stand a reduced chance of being signed because record company profits are down and the bosses can't afford to risk investing in less known artists who might not make them any money.

Record companies might also add that ripping CDs, whether you like it or not, is copyright infringement. It's stealing. Stealing is illegal. Duh.

Since everyone knows this, why does everyone keep doing it?

Well, people say, because CDs are far too expensive. Many international titles cost under R15 to manufacture in South Africa, but are sold based on the exchange rate, not on their relative value (if a loaf of bread costs x, a CD should cost y). Based on the inland buying power of respective currencies, CDs are currently about 700% more expensive in SA than in the USA, the UK or Europe.

And many musicians and small record company people agree that CDs are a rip off. You see, it's not just the big record companies that push up CD prices, it's the retailers - the music stores.

The music stores (or so we've heard) buy CDs from the record companies from as little as R39 per CD for a local pressing, and not usually more than about R60 for an import. They mark them up by between 100% and 200%, with the more obscure CDs by struggling new bands, which they buy in smaller quantities, costing the most! Sure, CDs by South African bands might only cost about R90 but that's more than double what the record company is getting, after recording and marketing costs.

Some SA Bands, like hip hop icons Brasse Vannie Kaap, have refused to sell their CDs via stores like Musica because of the markup. Other players, like record company The Mothermix Group, who distribute hip hop sensation Kallitz, have simply found somewhere else to sell their wares. They've picked Cash Crusaders, who will stock their range of CDs in their 112 stores countrywide, growing the potential market by 20%.

Cash Crusaders also agreed to market the new CDs as part of their R 18 million per annum print campaign and they'll play the music on their new instore radio station "Cruse Radio".

Alexander Gregori, the CEO of the small company has worked with Cash Crusaders to price the CDs at R59 instore: "Independent market research, done both in SA and internationally, indicates that people would buy three to five times more CDs at R60 to R70. This would instantly almost double turnover in the SA music industry."

So here's the question: Do YOU think CDs are too expensive? Would you buy three to five times more CDs if they were half or a third of their current price? And would you be happy to buy your CDs at Cash Crusaders?

- Jean Barker

We all know everyone's pirating their CDs. Sure, now and again consumers will go out and buy a CD by their favourite artist, or give one as a gift. But though the music is spreading, the wealth is not.

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