[JKCalhoun]

Record companies have always held the strings though — they have the artists. A long time ago, when I worked for minimum wage, a record was about two hours of my wages. So when the industry introduced CD's at twice the price of vinyl records that was a pretty significant price hike for me.

"Don't worry, the price of CD's will come down," they said. Over the following years, vinyl faded and CD's maintained the same price point.

Perhaps, an optimist might point out, the price of the CD did drop — relative to inflation over those following years. I don't know. But when AOL saw fit to flood our mailboxes with CDs to get online, it was clear that the cost to manufacture the compact disc certainly wasn't a factor in dropping the price of the music CD.

I'm too old fashioned in my understanding of business, capitalism. I always assumed that you priced a good based on what it cost to produce plus some reasonable amount of profit that would allow you a nice home and car. I assumed therefore that a downloadable eBook would be significantly cheaper than the same "pulp" book from the publisher that had to be manufactured from raw materials, printed, shipped....

[pocketarc]

> I always assumed that you priced a good based on what it cost to produce plus some reasonable amount of profit that would allow you a nice home and car.

That is completely reasonable if you own and run your own business.

But most businesses aren't owned by the people running them. The owner doesn't care what happens, they just have $X and want that money to grow a small % every year. The way that's gonna happen is if the business they bought with that money grows a small % every year.

The board, the CEO, the managers, the VPs, they all work to make that % increase happen, whatever it takes. If they can't make it happen, they get fired. If they need to increase prices for that, that's what's going to happen. If they need to milk people, cut corners, move manufacturing overseas, whatever it takes, they will do it. If they don't, someone else will.

The owner's money must grow. And "owner" doesn't have to be some fat cat evil billionaire. It's also the retiree living off their 401K savings. It's the 20-year-old starting their contributions. It's the employee pension fund that is there to protect employees.

P.S. I'm positive none of this is news to you or anyone reading it, but I love talking about this sort of thing.

[h2odragon]

I resisted CD's for a long time, because I had great turntables collected up from yard sales.

What broke my reserve, back when, was the "cheap rack classical CD". They'd churn out cheap "collection" box sets that didn't sell, and then recycle them into $2 to $10 single CD issues for the cheap bin. Some of those were mastered off wire still, I'll swear it.