Why Do We Keep Complaining Music Is Too Expensive?

We’re paying less for recorded music than we were two decades ago, but we’re still inclined to complain about it. Is there any truly rational basis for saying that music is too expensive in Australia?

When I first started purchasing albums in the (very) early 1980s, they typically cost around $8 or so. Over the course of that decade, I bought a lot of cassettes and some vinyl, and prices rose. I used to hunt down stuff on special whenever possible, but even so I’d often pay full price: $3 for a new release single (that is, $1.50 a track), $6 for a 12″, and between $12 and $15 for an entire album, which might well only consist of eight songs.

As the 1990s arrived, a new release now cost around $20. Having entered the workforce, I spent much of that decade buying CDs in ridiculous numbers, and when the new millennium arrived I was quite comfortable paying $30 or so for a new album, and up to $10 for a CD single if it had enough tracks on it or I was hunting down a rare B-side.

If this pattern had continued, I’d have expected to be paying $40 an album by now. But I’m not. For new releases which are major chart performers, I don’t usually expect to pay more than $20, and even then that’s only because I like physical releases. It’s only when I’m buying something obscure that I might pay $28 or so. And while these prices are absolute, what I earn has gone up, reflecting inflation.

Even so, it turns out I’m possibly still overpaying. According to the Australian Recording Industry Association (ARIA), roughly 23 million CDs were sold in Australia last year, with a total wholesale value of $252 million. That means a wholesale price of around $11, which could translate to a sale price of anywhere between $12 and $20, depending on how desperate the retailer is for business.

I mention all this because in last week’s discussion of the circumstances under which digital piracy might be condoned, one argument that came up was that content is too expensive — the “I’d pay if it was more reasonable” argument. Here’s trk arguing that point in terms of music:

A little while ago I got a Bigpond Music voucher for $15.00 so I thought I’d give this ‘legal music’ thing a whirl. I decided to buy Powderfinger’s album “Fingerprints”… which $15.00 just covers (the first ‘wtf?’ of legal music acquisition – why the high cost?)

In terms of music retailing history that doesn’t stack up. Given the average price of a CD is now lower than what I was typically paying a decade and a half ago, I can’t quite see where the sense of outrage is coming from. Similarly, the price of a digital track might well be a relative rip-off in Australia, but per-song cost has still barely shifted in a quarter of a century, between the $1.50 a side I paid for singles back in the day and the $1.69 many tracks shift on iTunes for now.

Yes, I know: a digital release doesn’t involve physical manufacturing, so the price shouldn’t necessarily be the same. But the last time I checked, inflation was still a reality when it came to the cost of most goods. Music, it seems, is an interesting exception.

Change is a constant when it comes to entertainment, so we shouldn’t expect the patterns to be constant, and we shouldn’t be surprised that selling tracks and albums is not the cash bonanza it used to be. No doubt the unit price and sales of sheet music are very different now to the first half of the twentieth century, where generating your own music at the piano was a much more reliable means of entertainment for the well-off, and publishing rights to popular tunes were what mattered.

The music industry shifted from that approach to selling recorded music, and it will shift — with much complaining, no doubt — to whatever model works when protecting recorded music is all but impossible. In the meantime, I’m off to hunt down some cheap CDs.

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  • I look at it like this.

    How much does it COST to make a CD? Not sure on an exact figure, however I’m pretty sure that they don’t cost more than about $2 a disc (including printed sleeve covers, etc). So where does the rest of the money go? The Artists? Hmm, not sure they get much of the sales either. Thats right, most of the money goes to the record company execs who need to keep up the champanne and coke lifestyles they acquired.

    I have found recent years there are a lot of indie labels starting up, and they tend to have their prices at a lower point (normally between $12 and $18), however the major labels just don’t seem to understand pricing.

    On digital copies, I think the whole same price as physical media is a horrible assestment of value. Want to get people to stop downloading music? two options. 1. Charge a lot less for online downloads (at least a third of current prices per track), or 2. Introduce subscription based sales model worldwide (e.g. Spotify) (This is my favorite).

    It’s strange, but I would have thought that the record exec’s would like a nice reliable revenue stream from subscription than trying to spruk the latest stuff.

    • In regards to companies getting the biggest slice of the pie. . .
      When a record company signs a new artist the new artist is given a multimillion dollar loan by the company (so to speak).
      The record company also spends millions on promoting the artist, food, wine, drugs, planes, cars, instruments, studios. . . the list goes on.
      Its all an investment by the studio on the potential success of the artist.
      The studio needs to recoup those costs AND the artist needs to repay his loan.

      It is only after a few platinum albums and smart saving and investment by the artist are they able to break away from the studio and take control of their own career.

      So yeah, there is a reason why studios get so much of the album sales.
      What, you think they let the artist work for free, take advantage of everything the studio has to offer, then walk away with millions? I dont think so.
      The artist is no better than a checkout chick selling you an item at the register which the supermarket has packaged and sold.

      As for why we think we music is still too expensive?
      Its because we are so use to getting it for free.

      • warcroft – Your use of the word “millions” appears very far-fetched. Million-dollar signings, million-dollar budgets – these are rare in the scheme of things. Sure, you might see a few, but they are not the norm for an artist-signing.

        Do a little more research on the workings of the industry, and you will see that the actual numbers don’t match whatever your source of information is.

          • The whole argument falls apart, so to speak, when you use totally made-up numbers.

            Plus, you used the same numbers twice. The advance almost always covers the cost of promotion, recording and touring, and as such, means the band doesn’t earn a cent from the label until the advance is paid back. There is no “million dollar advance” and then a “million dollar promotion/costs loan”.

            Your $2 million is more likely going to be $200,000. Or less. And none of it is free.

            Look up and read Steve Albini’s ‘The Problem With Music’ – Nothing much has really changed since then, apart from some artists (the TV Idol types) getting shafted even more since they don’t write their own music.

          • My first issue is that Hollywood accounting extends to the music industry. No matter how large your sales are – all you ever do as a musician signed with a major label is pay for your lifestyle. Which is fine if you’re a major rockstar playing stadiums – and you’re content to work for the experience and come away from the whole thing owing the label money.

            If you’re a working musician… Well it’s a bit rough to work for minimum wage, owe the label a fortune and get very little if anything of value.

            As a consumer who spends on music because it’s a passion and as a huge fan of the artist who feels that labels are kind of pointless bottom feeders – it’s hard to rationalize the cost of recorded media when the artist who I love gets stuff all from it. If I have $XXX to spend on Music per year – I could spend it on that recorded media and see the artist I appreciate get something between nothing and stuff all, or I could download that music and spend the tickets on gigs and merch – where the artist gets a much better take.

            I mean end of the year, I’m still only going to spend $XXX on music. I only have so much disposable income to throw in that direction. I know it’s not the most ethical decision in the world – but it’s the one where I get the most enjoyment for my dollars and the musicians I enjoy get the largest chunk of my dollars. I don’t have any real ethical issues with screwing the Labels – since I’ve seen how their own accounting works and how they screw everyone they do business with (including the public coffers)and I see their own practices as only marginally more legal and substantially less ethical than file sharing.

        • artists can expect to earn less than a low paying job for their first couple of years after they’re signed, record companies gouge them for overpriced “expenses” to get back their advance back as quickly as possible too. google courtney love’s rant on major labels or pretty much any other story on getting a record deal.

  • When a mate of mine worked at Sanity he was saying they were buying in CD’s for 10 bucks each then, and whatever else on top of that was pure profit.

    I also find 20 bucks at JB HiFi a pretty damn good price for an album when on iTunes it’s only about 5 bucks cheaper usually.

    Also it’s only another 5 bucks on top for limited/bonus editions of said album which usually include 3-5 more tracks & a bonus dvd.

    • Pure profit? You mean ‘takings’ – which you subtract the rent, wages, advertising and other overhead costs from.

      Even with 100% markup, retailers can struggle hard to make little profit. They are not raking in as much cash as might seem.

  • There’s also the problem when you’re listening to a podcast prompting the available album priced as “for a fiver”, and you check the iTunes link, and in the UK it’s five pound, in the US it’s $5 and then it’s $11.99 here. That doesn’t help the perception that we’re getting good value for money per track.

    Plus the whole “99 cents a track!” = AU$1.19 when you’d be expecting AU.973 for USD.99 with the current exchange rate doesn’t help.

    I think the other problem with the price/track equation is that whilst the music has become cheaper, it’s not becoming more valued by the market because we’re also getting into surplus economics territory – why does paying $50 for an import album of 17 tracks seem like a great idea when that $50 iTunes card buys you 40 tracks? Sure, it may be the rare album from the band you love, but your price per track sensitivity is set much lower these days.

    TW, the CD single was one of those areas where at the start, it was an amazingly flexible format of mini-ep, albums and ranges of different options, and progressively dried up to one song, one b-side, and four remixes. Rumour at the time was some form of regulation capping the number of different tracks on a CD before it stopped qualifying as a CD single and became an album (possibly some taxation/import issue)

  • I liked your article Robert but I think it might also be valuable to note that Music is cheaper because it is now competing in a much more competitive market segment than it was 20 or so years ago.

    In the 80’s you would purchase a Vinyl in a dedicated music shop where your only choice was what record or band you wanted to listen to. Now when you walk into a JB your choice is between Games, DVD’s, Apps, Devices, etc, etc. The total time spent listening to music has gone down and so inevitably to combat this the price of CD’s is going to fall.

    Online this is even more prevalent as “Music” (by Music I mean a record produced and distributed by a major label) competes with so much free content. Rather than buying a song from Amazon or ITunes you can in fewer clicks be on YouTube being entertained for free.

    Music is too costly and new business models are needed.

  • I think the government removed parallel import restrictions on CD’s in the late 90s/early 00s. This prob accounted for about a 30% reduction in the price of albums at the time.

  • I think, first off, one of the big factors that causes people to think that music is over-priced is lack of a physical item being sold. In the case of CDs, LPs, tapes – yes you’re purchasing an physical medium, however this is only a container for the product you’re actually purchasing.

    This is also similarly true for movies, however to a lesser extent as 2 senses are stimulated, not just your hearing.

    Its human nature to put more trust into something you can touch and feel, so I think its likely many people believe the bulk of the cost in CDs vs digital music, is due to producing a physical disc and getting it to them.

    If you’re purchasing a phone, clothes or other consumables, there is physical evidence to show the effort that has gone into producing that product. You can see and feel the effort involved in manipulating the meterials used to create an end result.

    This is clearly not the case with music, where the audible result is the only evidence of the process. People are generally ignorant of the fact that writers use royalties to live off while creating music, recording studios and equipment needs to be hired, performers and musicians need to be paid for their services, along with producers and mixers to create an end result. This also doesn’t take into account staff required to actually run and support the business of a record label – however management, promotions, admin etc is a constant of business through any sector.

    Another factor which tends to be overlooked, is that in production of many consumables, the cheapest labour is sought (look the the sheer number of production plants in China).

    This is quite the opposite with music. Typically, high profile staff are sought, bringing with them higher staffing costs, to ensure a high standard of quality in the performing, recording, and producing process.

    I don’t have any inside information on how the industry works – other than looking at the bigger picture and puting various pieces together, nor am I defending or advocating the prices charged for music – but I would acusing music prices to be overtly exorbitant would be somewhat naive.

      • this.

        Books are priced seriously high.

        That’s why I eventually caved and bought a Kindle.

        I can understand that the costs associated with distribution and production are high compared to other media but when you compare the physical media price to the digital download price it is quite incredible.

        Kindle books are in my experience always at most a third of the price for the equivalent at Dymocks. In the case of books over a couple of years old you are looking at cheaper than a second hand bargain bin.

        If only Amazon can just convince publishers to open all their works up to the Kindle store and maintain parity between the US store and the Australian store.

  • Given that non-one really seems to know what costs are involved in making an album, it’s interesting that everyone has such strong ideas on how much is too much to pay for one.

    Given that you’d easily pay $100 for a 2-3 hour live performance by your favourite band, and that you’d pay $10-$20 to see a 2 hour movie in a cinema, why is $15 too much for a recording that will potentially give you pleasure for years to come?

    My only complaint is with the regional pricing differences and usage restrictions. I’m yet to pick a digital audio service to buy from because none of them seem really fair and reasonable in these areas.

  • I have recently changed and decided to do away with my illegal music and movie downloads. The reasons for this being that I believe I am pretty blessed in what I earn these days, and should be paying something.
    Although I am young and listen to most of my music on the computer or mp3 player, I suppose I am quite old fashioned in that I still prefer to buy CDs and rip them (which is perfectly legal when you own the cd) rather than purchase an download. Why?
    a) Because a CD is tangible, and I can see that my money has gone somewhere, rather than just a couple of zeros and ones on my hard drive.
    b) Because CDs are still far superior quality to mp3, m4a, wma etc. available for purchase online (with the exception of some artists now providing lossless flac or wav files). IF I am going to purchase a piece of entertainment, I want to know I am getting the best possible quality I can, not some subpar highly compressed and lossy data.
    c) CDs are not much more than digital downloads, and in some cases can be cheaper especially if you want the whole album.

    This is where I think the music industry needs to provide more options on digital downloads as far as high quality file formats, so it is less of a subpar product and a more quality product.

    • My case also.

      I pirated a lot of music in the early Napster days and then into Limewire but in the last couple of years I have stuck to physical purchases.

      I have to say though that this would be a lot easier to justify if there were better options to purchase digital media in Australia.

      For reasons I won’t go into I refuse to use iTunes. in the US this would be no issue – I could just use Amazon from my Android or one of a number of other options on my PC.

      Not so in Australia.

      the same is mirrored with the lack of Netflix or Hulu etc.

      I try my best not to pirate but it still feels like it is not made easy.

  • The problem I have with buying CD’s, is that if they break, then im stuffed, not to mention that through the years, the tracklisting has gotten smaller and smaller, i remmember buying a mayor artist CD and it only had 6 songs, LIKE WTF???

    • I haven’t had a professionally produced CD break on me yet, Mario, but you can always back up your CD collection to a hard drive if it worries you. As for a CD having only 6 songs on it, that would surely depend on the length of the songs. If they are only about 2½ minutes then I would agree with you that you are inexcusably being short-changed. I seldom find myself buying a CD with under 60 minutes of music on it these days. Often there is as much as 75 minutes. I mostly buy my CDs from a London on-line business, but even so a full priced one can cost me NZ$22, plus postage. Still much better than paying $32-36 from a New Zealand source! I’m not averse to buying second-hand either, but I find amazon.com’s delivery charges too expensive these days. Sometimes buying second-hand from amazon.co.uk works out cheaper than buying new. I enjoy shopping around for the best price. 🙂

  • I think it’s also worth considering that production costs and distributions costs have lowered considerably and that this has opened up the market to far more diverse forms of music and a larger number or artists than was ever previously possible. People also expect to be able to own far more music than they used to. Compare owning 5 or 6 treasured vinyls to someone who picks up and fills say a 160gig iPod at 128kbps. The former might be 350 minutes of music while the latter could be 180,000 minutes. Expectations of how much music we’re able to own and listen to have changed drastically but the total amount we’re willing to invest in music per year hasn’t.

  • People will always try justify their actions to themselves. It is human nature. Killers do it so why wouldn’t lowly thieves. Everyone gives themselves that self assurance and price and labels and all that are an easy scapegoat to justify stealing to themselves.

    This obviously doesn’t apply to just music but to pretty much every action we as people do.

    Apologies for any weird errors. Sent from my phone.

  • My two cents.
    I use to work for a record publisher, label and distributor in the mid 90’s. at the time CDs were around $29 at jb and around 32-33 at places like sanity.
    We would sell around 17 wholesale, record shops would take above that to pay for freight, staff and store running costs plus profit.
    From the $17 we would pay around 6 for manufacture of cd, case and artwork. From the remaining 11 the marketing costs, office staff costs, warehouse staff, travel costs, office running costs, liscencing costs, profits and the artists royalty. I can take out about $9 related to physical distribution. That takes you down to aroun iTunes pricing give or take.

  • The internet is making record label promotion more and more irrelevant these days. I can only hope that more artists take Radiohead’s lead. Worldwide (cheap) price, and the money is actually going to the artist.

    Also, the price difference between both physical and digital music in Australia vs US/UK is just not justifiable.

  • Oh look, I’m famous on the internet… Hi mom! *waves*

    Also Angus, I’m not entirely sure why you quoted me just now and then went on about physical CDs…. My complaint was purely in regard to the cost of digital downloads. At ~$1.50 a pop, that is physical medium territory.

    When its a digital download I would expect to see significant savings since the cost of shifting 3MB of 1’s and 0’s is literally nothing compared to producing a physical CD, printed sleeves, jewel case, transport, stocking, etc. Especially once you take the labour costs into account. Clearly the music production costs are the same but whats with digital download prices being essentially on par with physical media purchases…. I find it hard to believe it costs the same to create, transport and sell a physical copy of a CD around the world as it cost to initiate a download. I move ~2TB/month of data from a shared hosting account that only costs me $8USD/month. If the record companies need some cheaper bandwidth I’ll sling them some referrals 😉

    Give me something like Steam for music (no, not iTunes…. ) with its repeatedly downloadable content, frequent specials which make purchases feel so great and community (achievements! for music! Now theres a winning idea) and we’ll talk about doing things legit. Until then I’ll download 99% of my music, and purchase the other 1% from Australian bands I want to support (like LORD … lord.net.au) knowing full well I am basically making a donation more so than getting any particular value for money.

    • Physical media were the dominant form of consumption until recently, so that’s the only way to compare prices over time, which is what I was doing. And FWIW, you’d have to work hard to get a full new release CD for $15 — it happens, but it’s certainly not standard with new stuff.

      I should do some more specific research into this, but if CDs are produced locally, then the physical costs of production aren’t particularly high — much higher than digital, sure, but not a huge component of the overall price.

      • I’m not really down with what a new release costs, so I just headed to sanity.com.au and checked out the list that appears in the “Music” section. The typical price seems to be between $21.99 and $24.99, for between 12 to 16 songs (lots of double CDs for the same price and/or “2 for $40” releases that will influence that, so I dont claim any particular scientific method beyond randomly clicking on new looking albums). Thats not far off $1.50 a pop (~$1.75 by my rough guesstimation), which is what Bigpond Music charged per track for Powderfinger’s album that I purchased.

        In fact, if you check out Bigpond Music’s current top 40 tracks, the vast majority are actually at $2.05 per track… which actually makes digital media _MORE_ expensive than physical media.

        This is more than a little ridiculous.

        Also, produced locally or overseas, I can guarantee that producing a physical CD costs more than receiving a ‘GET’ command from a web browser. Thats without even thinking about the labour costs to package it up, the transport fees, the labour costs the other end to unpack it and then the retail costs of displaying and selling that product. These are costs that are incurred for EVERY SINGLE CD/DVD SOLD. A digital download requires a single setup and can sell literally millions of copies without being touched again (though for the sake of marketing, a bit of maintainence and a design crew giving the website a lick of paint every so often wouldnt hurt any).

        Why arent digital downloads sold at a greatly reduced rate? Theres the argument that it devalues the music I suppose, but we’re selling COPIES here. I download a copy and you’ve still got the original – its like printing money, without even having to pay for the counterfeit materials! Drop the price, increase the sales, reduce the “market” for piracy.

        • Argument doesn’t entirely stack up. Most albums on BigPond (or iTunes or most other retailers) aren’t charged on a ‘number of tracks x price’ basis — it’s almost always cheaper to buy a whole album. (This was true of physical music as well for much of its dominant period). And Top 40 tracks are generally more expensive than album tracks. That variation reflects the music industry charging what customers are willing to pay, which is not exactly a revolutionary approach to business.

          Also, if I’m being finicky, hosting tracks for download isn’t free. Much cheaper, yes, but not free.

          And the basic point is that, once you factor in inflation, music now (digital and physical) is cheaper than it was, reflecting both changing markets and more efficient production. On that level, arguing it should be even cheaper still often smacks of self-justification.

          • You are partly correct – taking a single example (Rihanna – Loud) for the sake of throwing some numbers on things, the entire physical album is $21.99. The entire digital download album is $15.65. The individual digital downloads combined add up to $20.19 (and miss out on one of the tracks which is classed as “album only”?). So yes – it IS cheaper to buy an entire album digitally than a physical CD, though the ‘cost per track’ of digital downloads is actually MORE expensive than physical media on this particular album. But its only a saving of ~$6.00 (~20%) which to me simply isnt enough of a saving considering the stupidly cheap costs of digital content reproduction.

            Also, I dont THINK anyone is trying to justify their piracy by claiming the physical media is too expensive compared to “back in the day”? From most comments, the people who still buy phyiscal media are quite happy with the pricing. Its people like me who arent interested in a physical CD – we just want the tunes. And paying close to physical media price for something that was reproduced by an automated script executing the ‘cp’ command doesnt sit real well. Especially when its a PITA to pay for and download anyway compared to torrents.

            Lets compare here: A torrent can download an entire discogrpahy for free with a single click. A legal download requires (imo, large) payment, navigating a web interface to compile your ‘cart’, then a convuluted download process. Wheres the incentive to do it right? Relying on someones moral fibre to do all that is crazy. Make it easy. Make it cheap. Get people like me on board who happily spend lots of money on Steam games they never play and Android apps they hardly use just because its so easy and cheap (by comparison) to do so.

          • The ease of use argument rather falls down if you use iTunes, where you can indeed click once and download an album with no further steps needed. Even on BigPond, you wouldn’t go through the same number of steps if you’d used the service before. Exactly how do you propose to operate a one-click service that doesn’t need any information to process a payment?

  • Short answer yes. Online music from Amazon for australia costs more than online music from Amazon for america after conversion. Same product, same company, different country, so crazy australian jacked up prices.

  • Lots of the music I listen to can not be bought in digital version.
    If I import it I have to pay lots for postage, wait 6 weeks to find that the cases have been smashed.
    If I manage to find it in a place like JB, then it often costs $40.
    The cost of music is down only when you want popular artists.
    iTunes is useless for anything that is more obscure. This is the same with movies also. It’s like iTunes and digital services in Australia are scared of anything with subtitles.

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