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Path: utzoo!watmath!clyde!cbosgd!ihnp4!houxm!homxb!rabbit
From: rabbit@homxb.UUCP (P.REED)
Newsgroups: net.audio,net.micro
Subject: Re: CD-ROMs
Message-ID: <841@homxb.UUCP>
Date: Thu, 26-Sep-85 10:30:24 EDT
Article-I.D.: homxb.841
Posted: Thu Sep 26 10:30:24 1985
Date-Received: Sat, 28-Sep-85 05:36:07 EDT
References: <830@homxb.UUCP>, <512@moncol.UUCP>
Organization: AT&T Bell Labs, Holmdel NJ
Lines: 24
Xref: watmath net.audio:5912 net.micro:12112

In a previous article the price of a CD was compared to the price of
computer software, LOTUS 1-2-3.
.P
I was discussing the audio business not computer software.  I want
to understand why an EMI CD costs $14 while the same recording on
an EMI LP costs $7.  The same copy right fee should apply equally to the same
recording, the same distribution system should not cost more for a
CD versus an LP, and the same over-head charge (percentage) for management and
support services should be applied equally to a LP and CD.  What
that leaves is the start-up cost for capital equipment for a
CD factory and the difference in cost of manufacture (materials,labor, ...).
As was stated in the article referenced, the cost of manufacture for a CD, which
should have amortized into it the administration and service charges, is
under $1. Thus the difference in cost of manufacture for a CD versus an LP
cannot be more than $1.  Right?  Since a CD is about twice the cost of an
LP at the retail level it should be concluded that the cost of manufacturing
an LP is under $.50.  My question was aimed at verifing that a CD should cost
twice, $7, that of an LP.  Certainly the cost of materials for an LP will
be much less than the cost of CD materials and manufacturing equipment more
expensive for a CD, but considering the large quantities involved I think that
I as a non-audiophile am in fact caught in an audiophile pricing
structure.  As more of my putrid, sniveling type continue to invade
the CD world the price of CDs will come down to a mass market level of $7
per CD.  I hope!


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