Chad,
the reason why you don't pay $6-7 when buying direct is because the label
can't live without distributors and retailers RIGHT NOW. That means that
they have to be careful not to piss us off :). Selling to you at what we
distributors pay would do that and risk us not carrying the records, ditto
for the stores...for the money they make off you they can't afford that.
Yet. A similar thing happens many times when stores buy direct--they get a
better price, but NOT the same price as a distributor. That's to keep
everybody happy and doing their job.
And the system is never paid for...there's always rent, phone, labor, etc
costs that must be paid. Plus dead stock. Bad debt. You get the idea. The
start up costs are comparatively small. And that's true whether we're
talking about a distributor like me (ESPECIALLY a small distibution company
like Groove Dis) or a record store. And lastly on a philosphical note I'd
like to think a good distributor (or a good store) deserves to make a living
for ADDING some value. We are not a freight company. We don't simply take
records from one place and send them to another (though there are many
so-called distributors who do exactly--and only--that). Ask anyone who buys
from us, store or deejay, if we add some value and I'm sure they'll say we
do. And for that we deserve to make a living (mind you I said living not
"killing").
Hoping I don't sound (too much) like a corporate tool (though I AM on record
on the mailing list for being anti-Napster :)
Dirk van den Heuvel (dirkv@groovedis.com)
Groove Distribution
http://www.groovedis.com
Your Guide To The Underground
-----Original Message-----
From: chad downbeat [mailto:thedownbeat@thedownbeat.org]
Sent: Friday, June 16, 2000 6:01 PM
To: Dirk van den Heuvel
Subject: RE: Labels
dirk,
one question about the following....
"If labels were to sell to you direct with no middlemen needed the cost
could come down to $7-8 tomorrow..."
tell me then why when i buy direct from a label that i still pay the same
price as at the retail store? i realize the cost of the
system/medium/website/whatever in place, and it's maintenance, to connect
with the buyer is money. however that doesnt really explain the same costs
after the system is in place (and payed for).
i guess im just trying to say i realize everyone wants to make a bit more
money. i dont fault any label, distributor, middleman, businessman, or
person on the street for that. i do however find it insulting that it
cannot be spoken for what it is, and that is that it will -never- be
$7-8/cd. unless you are a label that has no other options or are in it for
the excitement of being a label, you are going to use capitalism to it's
advantage.
i do think capitalism has been used, by far, to it's advantage in the music
industry. it's only a matter of time before it deflates. that is all from
my point of view of course, and i will be the first to point out im a
simpleton when it comes to the industries system that is in place. but i
see aol on the rise with time warner communications/time warner music. how
long will it be before we pay a flat rate for music, as we do video.
i also just wanted to say thanks for your insight dirk. it has on several
occasions, after reading your emails, opened my eyes to some of the reasons
why.
cheers folks (it's friday),
chad
-----Original Message-----
From: Dirk van den Heuvel [mailto:dirkv@groovedis.com]
Sent: Friday, June 16, 2000 1:20 PM
To: Elson Trinidad; angedella isafella
Cc: acid-jazz@ucsd.edu
Subject: RE: Labels
Elson,
That's just a little too simplistic. The production costs of a CD are maybe
$1.35 but that doesn't take into account artist royalties (and therefore
advances), recording costs (not including mastering which can is part of
$1.35 or so), mechanical royalties, promotion & marketing, label overhead
and admin costs and many other little assorted bills. And keep in mind the
usual cost of a CD to a distributor (in other words what the label charges)
is between $6.50 on the low end and about $8.00 on the very high end. The
money between that and what you at the store goes to distributors (and their
costs) and a much bigger slice to the retailer (and their costs). If labels
were to sell to you direct with no middlemen needed the cost could come down
to $7-8 tomorrow...
FYI: I am not pro label, pro artist, pro major, or pro indie (I may be pro
distributor, but that's because I like being able to eat and pay my rent
:). I'm just pro good music. Period.
Dirk van den Heuvel (dirkv@groovedis.com)
Groove Distribution
http://www.groovedis.com
Your Guide To The Underground
-----Original Message-----
From: Elson Trinidad [mailto:elson@westworld.com]
Sent: Friday, June 16, 2000 11:51 AM
To: angedella isafella
Cc: acid-jazz@ucsd.edu
Subject: Re: Labels
angedella isafella wrote:
>
> Dear list: I heard that labels rarely ever lose on a cd.
Oh obviously. It costs like, what, $1.35 to produce a CD at cost, and they
sell
for $13-$18 retail?
Plus, record companies who had albums pay for themselves many times over as
LPs
(i.e. any Beatles album, Pink Floyd's "Dark Side of the Moon," "Eagles'
Gretest
Hits" etc get even more profit as releasing them as CDs (and even more when
they
put out "limited edition digitally remastered" versions).
- 30 -
:. elson trinidad, los angeles, california, usa
:. elson@westworld.com
:. www.westworld.com/~elson
[ the futurethnic beats of e:trinity - www.e-trinity.org ]
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