question about CD prices

[9000]

not really a matador-specific question, but i know there was conversation about CD prices on a recent thread and it made me curious: do matador artists have the ability to set wholesale/suggested retail prices? as an extreme example, could an artist suggest setting prices at lower price point (say $4-5 a disc) in an effort to spur sales?

9000

[tinobeat]

but I'll do it anyway...

I don't know if its ever up to the artist, but I know that labels will often temporarily drop the price on a CD in a big way to spur sales. The first time I remember seeing it (probably not the first time it was done, just my first experience) was when the Eels "Beautiful Freak" CD came out many years ago and was priced at $4 at HMV. I wsa young, I thought that it might be the beginning of a revolution of cheap CDs, but it was just a marketing thing.

I know matador did a price drop whatever its called on the Interpol CD, and I remember that the Andrew WK CD was $6 when I got it. I wouldn't have gotten it otherwise...

I'm rambling...

so in short, yes, labels sometimes attempt to spur sales by lowering CD prices, but I don't know how much it ever has to do with the artists making that decision. I'd guess not that much because I have a feeling most artists would want that sort of publicity push...

[evil_speakers]

tinobeat? Andrew WK? Say it ain't so! You don't like that clap trap do you? I can't beleive it... I'm so disillusioned....

[9000]

i think another quesiton i was trying to ask, although i didn't articulate it, is why are all CDs relatively the same price (commoditized), when the quality of art varies from artist to artist and from release to release?

[pabost]

We'd all be broke if CD's were priced based on the artistic merit encoded within them. Well, broke or rocking out to the new Jewel.

[Patrick]

We set the initial price on Interpol to 9.98 list (prices in stores are usually below list, unless you only shop at Wal-Mart) to spur sales.

Patrick

[tinobeat]

Originally posted by evil_speakers
tinobeat? Andrew WK? Say it ain't so! You don't like that clap trap do you? I can't beleive it... I'm so disillusioned....

oh come on! I don't love the guy, I bought it cos it was $6 and its fun as hell! do I think he's "important" or "has something to say" or is "genius?" not at all. do I think the cover art is tremendous and the songs make me get all twitchy in a good way? yes yes yes!

not to drop the "I heard it long ago" card, but I will... my roommate had his old EP on Bulb and I thought it was hilarious, so when I saw the LP for cheap, I couldn't help but get it for laughs. I listen to it maybe once every few months, but its a hoot when I do.

hey, not to go off-topic, but what did you think of the songs you DLed? you can private message me or email me to not derail the thread too much...

[tinobeat]

and to bring it back to the thread, sort of:

Patrick (or anyone else who knows, for that matter), this is a more general question about American commerce, but why $9.98 and not just $10? I could pose the same query about any business that sets prices at pennies less than a full dollar amount instead of just an even one. My microscopic label sells CDs for $5, $9 etc. and I wonder what would make me change that to $4.99, $9.99, etc? the question isn't a challenge so much as a sincere curiosity as to why pennies come into play like that. at a store, with tax, that turns into something like $10.54 or something awkward like that, and you get all this mess of pennies instead of 2 quarters. I've always been fascinated by what the logic is that goes into that. Obviously this is a much bigger issue than the commerce involved in running a label, but maybe you might know why Matador retailed the Interpol for $9.98 initially instead of an even ten dollar bill. I'm guessing it has to do with the retailers and not matador, but do you know why they would do that? Newbury Comics did that with our latest CD too... its so bizarre to me...

[spurious_dander]

tinobeat:

armed only with the ame's version of Ms. GED, I'm fairly confident $9.98 looks a mighty bit finer than ye olde 'Hamilton'. seeing as you're the entrepreneur and I'm the unemployed misanthrope (pardon m'shameless plug), you probably already knew that several thousand copies sold @ even the most insignificant amount could differentiate your eating at Wimpy's from Julien. now that's bizarre! caveat emptor(!)...cripes, shadowing jt.r., the bees knees.


np.fleshtones/popgoesunderground

[9000]

tinobeat,

as silly as this may seem, studies indicate that people perceive items to be significantly cheaper, and hence are more willing to purchase them, when prices are a few cents below the next higest dollar (i.e. $9.99 vs. $10).

9000

[tinobeat]

that's sort of what I figured, but man, what a waste of time.

Is it just me or is it kind of insulting to your intelligence that people will price something at $3.99 because it'll make you think of three dollars more than four? I'm sorry, if you think that's anything other than $4 then you should be charged double.

I know that over several thousand transactions, those two cents add up, but its still a pain in the ass.

maybe I'm the only one who gets frustrated when I go to the store and it comes to $5.76 and they give me two dimes and 4 pennies as change, when with MA's nice round 5% sales tax, rounded prices would always come out in zeroes and fives... A store I used to work at always did that so we wouldn't deal with pennies at all. It always came out to quarters and dimes in change..

it all made so much sense!

[winterwooskie]

i always thought they did that because people don't care about change so when they would normally sell something for like eight dollars, they could add 98 cents because people don't see change as that important and will give that little extra. and they raise it to 98 because it's the almost the highest you can make the change value go up before getting next to a whole dollar.

[Funk]

Originally posted by 9000
i think another quesiton i was trying to ask, although i didn't articulate it, is why are all CDs relatively the same price (commoditized), when the quality of art varies from artist to artist and from release to release?

If you go to a movie, the price is the same for all the films playing in the same theatre despite different running times, budgets, quality, etc. It just is.

I always thought the $X.98 price was so stores that sold used recordings could sell used stuff on the dollar and you'd know you were getting something used. Or that's why I've always thought stores did that, I mean. Cuz that's how it works out when I go shopping (did I channel tinobeat for this answer?)

[tinobeat]

I know some stores do the "whole dollar amount = used / __.98 = new" thing, but not always. my unrealistic and never-realizable wish is that everything (books, CD's food, etc.) all just sold for whole or half dollar amounts.. at the smallest increment a quarter. it would make everything so much easier!

but there's probably good reasons that'll never happen. like how there's a good reason somewhere that mosquitos exist, though I wish they didn't.

[evil_speakers]

When the penny (and sadly today, even the nickel) had actual value, I'm sure it was VERY important to people that something was 5.83 vs. 5.98. That could mean the difference between being able to afford it and not. Sure, it would be great if everything was round, and taxes making things $8.54 is annoying because you have to dig for change, or get a bunch of change in return. This is annoying only because the change has so little value. If movies were a nickel and candy cost a penny, then you'd be darn happy something was 5.98, so you could maybe take those pennies to the five and dime to buy some peppermint sticks. Maybe it's all a conspiracy to keep the essentially valueless penny in circulation. If everything came to a whole dollar or fifty cents, why would we need pennies or even nickels and dimes?

[pabost]

Tinobeat's last post was simply the most beautiful, innocent post I've ever read on this bulletin board.

And by the way: I used to work in a yogurt shop that only sold items at quarter increments. Easy change, baby.

[Patrick]

I always thought the .98 and .99 price thing was to make things look cheaper than they really are. I still fall prey to this - thinking 7.99 is more like 7 bucks than 8 bucks, even though I know it's really 8 bucks.

With list prices, the .98 thing is pretty standardized.

Patrick

[Joseph]

Originally posted by evil_speakers
When the penny (and sadly today, even the nickel) had actual value, I'm sure it was VERY important to people that something was 5.83 vs. 5.98. That could mean the difference between being able to afford it and not. Sure, it would be great if everything was round, and taxes making things $8.54 is annoying because you have to dig for change, or get a bunch of change in return. This is annoying only because the change has so little value. If movies were a nickel and candy cost a penny, then you'd be darn happy something was 5.98, so you could maybe take those pennies to the five and dime to buy some peppermint sticks. Maybe it's all a conspiracy to keep the essentially valueless penny in circulation. If everything came to a whole dollar or fifty cents, why would we need pennies or even nickels and dimes?

I got two words for you, my young friend: Debit card. It's the solution to all of yer change-related problems!

[CFL]

To respond to the original enquiry...

Most major label artists have little or no say in what thier CD will sell at. Companies like Universal, Warner, BMG, EMI & Sony have only one interest in mind and you know what that is. Price point deals are discussed between the labels and the retailers and have everything to do with how much quantity is being purchased, what kind of promo is being put together for the release, blah blah...

Now, you will notice those occasional crazy-low price points (The Mars Volta is $9.99 @ HMV, on Universal, The Music is $10.99, on EMI), but as previously stated, it's just a marketing scheme (granted a good one)...in a couple of months, The Mars Volta & The Music will be $24.99 @ HMV and nobody will be buying it. This tactic has become more prominent lately...it's one of the industry's ways of "fighting" file sharing...it's also all about exposing quality new acts, which helps.

I would say that the average cost that a cd is sold to a retailer at is $13.99. Anything on top of that is straight into the retailer's pocket. So on something like (god forbid) Metallica, where Future Shop is selling St. Anger at $14.99, they're actually losing $2 every sale cuz cost on it is $16.99. Total lost leader.

Either way, the industry is fucked. I think it's days are numbered, unfortunately. I say this because I think I'll always crave something tangible to accompany my listening experience, I'm not too fond of living online for my musical input.

What about y'alls?

Piece.

[CFL]

Indie labels are obviously different. They can do whatever they want (within thier own budget of course)...I generally find indie releases to be more expensive, since the artists and label are pretty much trying to live off of the $$ kickback. They also don't have the pull ($$) to really deal with the retailers...So I don't mind paying extra.

Piece.

[Funk]

Originally posted by CFL

I would say that the average cost that a cd is sold to a retailer at is $13.99. Anything on top of that is straight into the retailer's pocket. So on something like (god forbid) Metallica, where Future Shop is selling St. Anger at $14.99, they're actually losing $2 every sale cuz cost on it is $16.99. Total lost leader.

Given that you appear to be Canadian, I'll point out that the usual wholesale price here is $13.10 (although it can rise as high as $17), so Future Shop could possibly be making a small profit on albums that they sell that cheap.

[9000]

CFL, thanks for the insight.

I was always under the impression that wholesale CDs are usually priced around $10.30...

Also, maybe pricing is somewhat regional, as I typically find that indie releases are cheaper than the majors over here in NYC. You'd think the web would even out these sort of discrepancies.

8999.98