[vox] Micheal's Minutes: Microsoft and Apple Sell Out Music Fans

[Shwaine]

On Thu, 1 May 2003, Bill Kendrick wrote:

> On Thu, May 01, 2003 at 01:59:25PM -0700, Shwaine wrote:
> > My only problem with Apple's store
> > is I think the per song price of $0.99 is too high. Something like $0.25
> > to $0.50 per song would be more appropriate IMO.
>
> Considering that these days it costs $15-20 to get a disc with only 10-15
> songs on it, 99c is actually pretty good.  Esp. considering you're getting
> the whole "pick-and-choose" and "on-demand" service out of it.
>
> IMO, of course.
>

I think in terms of profit margin to the company rather than cost to the
consumer. These days I can find most CDs on sale for $12 or less if I wait
for a sale, $15 or less normal price if I go to Target or the like. So
true the per-song consumer cost is around $1. But, when you consider the
overhead that goes into manufacturing and packaging a CD then shipping it
to the stores then compare that to making a music file and adding it to a
database, the profit margins on the digital song at $1 a pop is going to
be much greater than the CD. Many would argue the profit margin on a CD is
already too high, now the per-song online profit margin is even more. This
is why I have a problem with the buck a song Apple store. It may be the
same consumer cost, but the execs are lining their pockets even more than
with the already overpriced CDs.