Path: utzoo!utgpu!jarvis.csri.toronto.edu!cs.utexas.edu!tut.cis.ohio-state.edu!att!cbnewsl!arny
From: arny@cbnewsl.ATT.COM (arny.b.engelson)
Newsgroups: comp.edu
Subject: Re: Why are CD-ROMs so expensive?
Message-ID: <3430@cbnewsl.ATT.COM>
Date: 28 Dec 89 13:56:07 GMT
References: <829@tijc02.UUCP>
Reply-To: arny@cbnewsl.ATT.COM (arny.b.engelson,wh,)
Distribution: na
Organization: AT&T Bell Laboratories
Lines: 44

In article <829@tijc02.UUCP> pjs269@tijc02.UUCP (Paul Schmidt) writes:
>In doing some research on my Master's Thesis I turned to
>Mathematic Review.  Unfortunately, my thesis does not fit
>into one of the categories that they have listed.  I was
>relieved to find out that they produced a CD-ROM with the
>information called MathSci.  I went to the librarian to
>find out if they had this disk.  No they didn't.  Why?
>Because it cost $3000!

>This is an outrageous price for the disk.  A CD-ROM costs
>about $10,000 to master and $2/disk to reproduce.  If you
>would assume that it cost another $10,000 in manpower to
>create these disks (about one man month) then they are
>making a killing on these disks!  (Especially when you
>examine the costs of shipping and printing which will be
>MUCH higher for the book format, which, by the way, costs
>much less than $3000.)

So?  What gave you the idea that selling price has anything to do
with production cost?  It doesn't.  You should take a few more
Economics/business classes.  Selling price depends on what people
will pay.  The object is to make the most money, not to sell the
most CDs.  (Note: I'm no expert, and a lot is left out here, but
you get the idea.)

>Since it costs less to procude the disks, why aren't they
>less?  The small technical schools and state schools can't
>afford these prices, and are depriving the students with
>one of the best breakthroughs in research.  (It would be
>quicker for me to drive to the nearest school that does
>have the disk than to do the research using the books,
>and that school may be 6 hours away!)

Bingo!  Now you've told us (part of the reason) why the CDs are
more expensive.  If you're willing to drive 6 hours to use the
CD instead of the books, that CD is worth a lot more than the
books.  Therefore, (some) people are willing to pay more for it.
(There's also probably little or no competition; it's a new/sexy
technology; probably a limited market; etc.)

The sad part is: you are right.  Students (and others) are losing
out because of the high price.  It's a shame.  Hey, I got an idea:
why don't you start a competing firm, raise some money, master the
CD, and sell it cheap!