Over 1m Xbox Live users' consoles BARRED

[Mellotron]

But it's the same logic. The marginal cost of producing the CD may only be 5p, but the sunk costs involved in paying the artist (if they get an upfront fee), buying the equipment for the recording studio, hiring staff to man the recording studio, hiring a producer, etc.

Not to mention that alongside the marginal production cost of 5p, there is a cost associated with shipping it to a location, and staff costs to contend with.

I accept that this doesn't come to anywhere near £18, but it's a little bit more complicated than saying the CD costs 5p to produce.

I know. Having worked for a record label for about 3 years and been in two signed bands I'm well tooled up on this stuff.

I was over-simplifying it of course but needless to say CD prices were ridiculous for a long time and a backlash was always going to come.

 

[sten_super]

OK well say it does (I believe it would be 7 figure, but agree to disagree)

15million total cost (at absolute most)

divided by sales of 5million (I reckon MW2 could easily smash this, will be one of the biggest selling games ever.

That's 3 quid. Explain £54.99.

I know it's a little sad to post twice consecutively, but I couldn't resist this.

The firm are profit maximising. That's all. They obviously don't believe that by cutting price by £5 (say) they will increase their sales by 9% (which is what would be required to increase profits). What's the problem with them making as much money as they can from THEIR innovation, design and effort?

 

[8ace]

OK well say it does (I believe it would be 7 figure, but agree to disagree)

15million total cost (at absolute most)

divided by sales of 5million (I reckon MW2 could easily smash this, will be one of the biggest selling games ever.

That's 3 quid. Explain £54.99.

That cost is almost entirely met by the developer - they only get about 20% of the sale price at most.
- Not all games sell 5 million units.
- Not all the copies will sell at that price (it's £32 on amazon).

This game will undoubtly make Activision/Infinity Ward a healthy profit but there's a lot of expensively produced games that don't.

 

[Mellotron]

I know it's a little sad to post twice consecutively, but I couldn't resist this.

The firm are profit maximising. That's all. They obviously don't believe that by cutting price by £5 (say) they will increase their sales by 9% (which is what would be required to increase profits). What's the problem with them making as much money as they can from THEIR innovation, design and effort?

Which firm is that? Sainsburys? Tesco? HMV? All sold the game at wildly varying prices.

My point is if they do want to wring every last penny from already broke 15 year olds, they're only going to contribute to the piracy market. So they are thinking short term and losing money long term due to increased piracy.

 

[beorhthelm]

OK well say it does (I believe it would be 7 figure, but agree to disagree)

15million total cost (at absolute most)

divided by sales of 5million (I reckon MW2 could easily smash this, will be one of the biggest selling games ever.

That's 3 quid. Explain £54.99.

lets try that. for a start, its £35-40 for most, and CoD MW2 is £45. from that comes Staff costs, research & development, company overheads, marketing and advertising, material and production costs, packaging (done manually only a few years ago fyi), licencing fees, shipping to retailer, some profit margin, retailer's markup.

the last one is one reason why prices differ widely, and licencing (to MS/Sony/Nintendo) is iirc £5-10 ($?) each unit. Now i dont believe for a minute the cost of producing one game in isolation is £15million, theres some creative accounting and spin in there, but the cost to produce a game and put it on the shelf is far more than £3.

Nothing in this world is priced what it cost to produce, you think a box of Persil costs Unilever £3 to make or closer to 30p? yet we only here about how terrible the markup is on CD,DVD and games... either because its used to justify the copying or those crying are 15yo who dont have a clue about the real world. i'd have thought someone in the creative industry would understand things: can i have your bands album for 50p (cost to produce and post a CD)?

And since when is the target audience 15yo kids, its been about 20-30yo ever since the Playstation 1 came out.

 

[Mellotron]

can i have your bands album for 50p (cost to produce and post a CD)?

Of course you could. No bands at this level make money from CD sales. Even the big bands make their money from touring, not CD sales.

 

[beorhthelm]

Of course you could. No bands at this level make money from CD sales. Even the big bands make their money from touring, not CD sales.

fair point. at your level, as you put it, you are using the CD as marketing for your live act. there is no live act to see for many music artists, DVDs (cinema for a few weeks) and certainly none for games so its not really the same thing is it? im sure you'll change your tune (as 90% of artists do) if you hit the big time.

nice one if you can make a living gigging though.

 

[Mellotron]

fair point. at your level, as you put it, you are using the CD as marketing for your live act. there is no live act to see for many music artists, DVDs (cinema for a few weeks) and certainly none for games so its not really the same thing is it? im sure you'll change your tune (as 90% of artists do) if you hit the big time.

I wouldn't say 90%. Plenty of musicians have come out in support of file sharing.

Only t*ssers like Lily Allen and Metallica have badmouthed it.

The artists who are downloaded the most are the ones who are the most popular (ie they've got more than enough money already). Name me ONE artist who has been bankrupted because of piracy. They don't exist. It only harms those who already have tonnes and tonnes of money.

At the end of the day you should (in my opinion) be making music to create art, not as a commodity. If you can make enough to live on then that is IDEAL, and you are very very lucky.

 

[Leicester Seagull]

I wouldn't say 90%. Plenty of musicians have come out in support of file sharing.

Only t*ssers like Lily Allen and Metallica have badmouthed it.

The artists who are downloaded the most are the ones who are the most popular (ie they've got more than enough money already). Name me ONE artist who has been bankrupted because of piracy. They don't exist. It only harms those who already have tonnes and tonnes of money.

At the end of the day you should (in my opinion) be making music to create art, not as a commodity. If you can make enough to live on then that is IDEAL, and you are very very lucky.

Whilst agree with some of what you say, I think it IS the smaller artists who are affected the most by piracy, and the studio's, and the small labels; they're closing down all over the country because unlike the larger acts and their major labels, they are not in a position to rely on touring for their finances. The proof is everywhere- just look at how few studios there are now left in this country compared to just 10 years ago.

What makes you think that artists/workers in the industry should be 'very, very lucky' to be paid after dedicating their lives to honing their craft and skills in order to produce brilliant music for everyone to enjoy?

people in the music industry deserve to be paid for their work just as much as anyone else.

 

[auschr]

I don't have this problem on my Super Nintendo

 

[Mellotron]

What makes you think that artists/workers in the industry should be 'very, very lucky' to be paid after dedicating their lives to honing their craft and skills in order to produce brilliant music for everyone to enjoy?

people in the music industry deserve to be paid for their work just as much as anyone else.

Because there are MILLIONS of people who do this, and only 2% or so make the cut. That's what I'm saying there.

 

[Spider]

Woolworths were selling single disc albums for up to £17.99 at points. Guess how much it costs to make a CD. (Clue - it's between 1 and 5 PENCE).

I know this is going back in the thread some way, and has sort of been answered. I kind of agree with this - the music industry was particularly short sighted and didn't see a backlash coming in the form of illegal downloading. They should have been reducing the price of LPs and singles way before the average person started getting it all free on the internet. However, I still believe that even if they'd reduced them to £5 (surely about as low as possible to make albums viable) people would still eventually turn to the internet.

Also, quoting the price of a blank CD is entirely spurious as clearly you're not really paying for the basc product.