Music Albums
An artist I enjoy has a new album I would like to buy. I thought it would be the most expensive in the store and cheaper as a download online since there are no physical production costs, no shipping, and no stocking required to download the album. The numbers surprised me.
The artist sells the CD online for $16.99
Best Buy sells the CD for $13.99
MSN's Zune.net sells the mp3 download for $10.00
Rhapsody sells the mp3 download for $9.99
Amazon.com sells the the mp3 download for $8.99 and the CD $9.99 new and $9.00 used.
eBay had numerous auctions in the price range of $5-6. This is the same week as the album was released, as more people list copies for sales online the auction prices will rapidly decrease.
It is apparent the mp3 services choose to compete with CD prices rather than undercut the resale market. Unfortunately the resale market emerges immediately because users can download tracks onto their computers and sell off the CD. I am not sure if it is legal to purchase the CD that someone else ripped, rip it yourself, then sell the CD online to someone else who does the same thing - certainly this happens and I am not sure how anyone could possibly prevent it. This method reduces the costs to a couple of dollars for the transaction expenses. I realize no matter what the price for an original CD or download that the resale market will be less, however because the difference between CD and download cost is so slight I think it encourages comparison shopping and invites people to reach this conclusion.
Depending on the postage, packaging, and fees, a CD sold at $5-6 on eBay generally runs costs around $3. If the mp3 downloads were $2 cheaper and the $3 discount for the resale market held that might make reselling negligible or not profitable at all. I am sure many people would dispute these numbers, but I know one thing for sure: I am waiting for my new CD in the mail from the resale market and it is because the downloads were more expensive.
The artist sells the CD online for $16.99
Best Buy sells the CD for $13.99
MSN's Zune.net sells the mp3 download for $10.00
Rhapsody sells the mp3 download for $9.99
Amazon.com sells the the mp3 download for $8.99 and the CD $9.99 new and $9.00 used.
eBay had numerous auctions in the price range of $5-6. This is the same week as the album was released, as more people list copies for sales online the auction prices will rapidly decrease.
It is apparent the mp3 services choose to compete with CD prices rather than undercut the resale market. Unfortunately the resale market emerges immediately because users can download tracks onto their computers and sell off the CD. I am not sure if it is legal to purchase the CD that someone else ripped, rip it yourself, then sell the CD online to someone else who does the same thing - certainly this happens and I am not sure how anyone could possibly prevent it. This method reduces the costs to a couple of dollars for the transaction expenses. I realize no matter what the price for an original CD or download that the resale market will be less, however because the difference between CD and download cost is so slight I think it encourages comparison shopping and invites people to reach this conclusion.
Depending on the postage, packaging, and fees, a CD sold at $5-6 on eBay generally runs costs around $3. If the mp3 downloads were $2 cheaper and the $3 discount for the resale market held that might make reselling negligible or not profitable at all. I am sure many people would dispute these numbers, but I know one thing for sure: I am waiting for my new CD in the mail from the resale market and it is because the downloads were more expensive.
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