Cheap CDs? Not likely!
CDWOW have settled two weeks before the court case that the BPI brought against them for selling parallel imported music CDs - which means higher prices for consumers.
CDWOW have settled two weeks before the court case that the BPI brought against them for selling parallel imported music CD�s. Without going into the legalities of who is allowed to sell what to who and where, it means hike from £8.99 to £10.99 for CD Albums in the Top 75 of the Chart (Which is not really representitive of what we actually like to listen to (but that's for another time...). Result: more illegal downloading of files probably, oh but the BPI are threatening to be after your rear for that soon as well.
The British music business industry fleeced the public when it changed formats from vinyl to CD, for the younger readers vinyl was more expensive to produce than CDs but the price was nearly double for the new format. The reason given was that the manufacturers had to recoup their initial outlay but the prices never dropped and vinyl was phased out for mass consumption.
So why are CD's so expensive in the first place?
Well I found an article on a bbc.co.uk page and these figures are stated:
Typical CD Cost �15
17.5% VAT = £2.63
Retailer about 1/3rd =£3.71
Distribution = £1
Copyright holder = 70p
Which means that the BPI's clients, the major record labels, get £6.96.
CDWOW Cost £8.99
17.5% VAT = £1.57
Retailer about 1/3rd =£2.22 (and they don't charge for postage)
Distribution = £1
Copyright holder = 70p
BPI Client = £3.50
Post settlement CDWOW Cost £10.99
17.5% VAT = £1.92
Retailer about 1/3rd =�2.72 (assuming that the £2 hike isn't just for BPI members)
Distribution = £1
Copyright holder = 70p
BPI Client = £4.65
That�s an increase of £1.15 per CD sold that's a huge percentage increase. I expect we will see BPI chairman Peter Jamieson get a very nice little bonus this year.
Quote from BPI
"Britain is a nation of music lovers and we buy more music than any other country - four units per capita each year. (IFPI Recording Industry in Numbers 2002). According to independent research album prices have continued their downward trend over recent years.
Latest figures show that on average a CD costs £10 in the UK - 2% less than a year ago. (Taylor Nelson Sofres)"
If you were to take out the cheap internet sales you would find the prices have in fact risen. I don't recall the top 75 albums being £15.30 less than a year ago. I recall then being £13.50. If we also are buying four CDs a year, that's approx. 250million CD's, then people will be buying less - three albums perhaps - especially if the price has gone up over 20% as at CDWOW, which means 195 million CD's which means a loss of £302.25 million to the British music business.
Hopefully that means less manufactured pop bands.
I see this move as a reactionary protectionist stance by the recording industry, who are yet again addressing the wrong problems and ignoring the reality.
For those interested the BPI surprisingly does not stand for:
Bastards Protectionist Inquisition.
References:
CDWow and BPI settle landmark case Owen Gibson, Guardian New Media, 22 Wednesday January 21, 2004
BPI release statement on CDWOW!
Next short: The Darkness Lees Cliffe Hall 8th Feb 2004
Previous short: millionVALVE
