Since the first CDs hit store shelves in 1983, the average price of a CD between then and 1996 has dropped more than 40%. Consumer prices have risen nearly 60% since then. If CD prices had risen at the same rate as consumer prices, a CD would cost the consumer an average of about $33.86 instead of $12.75. Add to this the fact that CD quality has increased, the amount of music on one cd has increased, and also the fact that today many CDs come with special multimedia features like music videos, interviews, and discographies. (RIAA)
Most people also assume if record companies used less plastic for the CD cases they would be a great deal cheaper. This isn't true. I've bought many CD singles with very small plastic cases and they've cost me nearly $10. Although, they are imported from other countries, there still expensive for a single.
According to the RIAA, there are four main factors that go into the price of a cd.
1. The artist needs paid for their creativity and time spent on the recording. In order for the artists, the songwriters, and the record companies to be paid their fees and royalties, there needs to be a some sort of cost.
2. The costs of recording can get very expensive. There are recording studio fees, studio musicians, sound engineers, producers, mixers, and other people working hard behind the scenes to ensure everything sounds good. These people must be paid and the costs need to be recovered by the record labels by the cost of a cd.
3. In order for consumers to know about an album there must be marketing and promotion. Within the marketing and promotion realm of things include: expensive video clips, public relations, costly tours and tour support, marketing campaigns, and radio promotion.
Also included in marketing and promotion is the artwork on the CD box, posters, displays, and music videos.
4. The final factor in the cost of a CD is the fact that record companies have to be able to cover up the losses from the unsuccessful releases--nearly 10% of the 27,000 new releases each year.
