Posted by Mike on February 25, 2000 at 20:55:46:
In Reply to: Re: Good point posted by Bowser on February 25, 2000 at 20:07:08:
Yes this is because the Wholesale prices (Charged by Record companies to Retailers) of CD's are lower there (Better Anti price-fixing legislation)
Also as far as I know the US record industry operates a sale-or-return system which means that if a retailer fails to sell all his copies of a particular CD title within a certain amount of time he/she can send it back to the record company and get a partial refund on the wholesale price minus the physical manufacture cost of the CD (Which is usually less than 50 pence). This enables the Record shop to operate on a smaller profit margin as it doesnt run the risk of being landes with too much unsellable stock (It is a well known fact that In Ireland the Newspaper Industry has a similar system despite the material cost v's cover price ratio of Newspapers being far higher and sales figures being much easier to predict)
Can anyone explain the following though:
1) Cassettes being cheaper than CD's even though the cost of manufacturing a CD is lower.
2) The soundtrack albums of some films being more expensive than the price of buying a Video of the same film. Surely when the production costsof a film runs into millions whereas the production cost of an album amounts to the cost of a few hours of studio time andtherfore the CD should be much cheaper than the Video.
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