” ‘You want to stop piracy?’ asks Jack Scalfani, CEO of independent music site FightCloud.com. ‘Make your CDs affordable. I’m not going to spend three hours turning and burning a CD … if it’s an $8 CD. I’m going to walk across the street to Tower Records and go, ‘Here’s my $8, thanks for the new Madonna.’ My time is worth more to me than the money, so I will put the money out if it’s a good price.’
At FightCloud.com, the price is right. Scalfani sells CDs for free. That is, if you don’t count the $4.95 ‘shipping’ charge. Of course, that would be a mistake. Buried in the shipping charge is the secret ingredient: a modest profit. Less costs of $2.31, the company nets $2.64 on each ‘free’ disc, half of which goes to the artist. But with only 1,000 or so CDs shipped to date, no one’s getting rich. Yet.
In 2000, the average suggested list price of a CD was $14.02, according to the Recording Industry Association of American (RIAA). The CD itself costs about 32 cents in a large production run, according to Michael Pardo, V.P. of sales for CD duplicator Greenwood Solutions. Add packaging and the price goes to 54 cents. Add the cut for a new artist, somewhere between 10 and 50 cents, and your cost nears a buck. Add $28 million to cancel your estimated $80 to $100 million contract with Mariah Carey, as EMI recently did, and adjust your costs accordingly.” [Salon.com]
Finally, a record label gets it! You can even preview the songs. Scalfani is spot on when he notes that my time is valuable and that I’m willing to pay a reasonable price for convenience. NetFlix is one of the best examples of this, which is why they had a pretty good IPO today.
I think I might be “buying” my first CD of the year!
Thought: FightCloud, meet Emergent Music. Emergent Music, this is FightCloud.
For you and me, the muddle of MP3s downloaded on to hard disk, collected and burned on to CD (or transferred into an MP3 personal) makes it unattractive.
But what about the cost of the average teenager’s (or student’s) time? CDs are going to have to get soooo cheap.
I think the horse has bolted, folks!
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