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From: lauren@RAND-UNIX.ARPA
Newsgroups: net.micro
Subject: CD pricing
Message-ID: <1823@brl-tgr.ARPA>
Date: Tue, 1-Oct-85 14:26:50 EDT
Article-I.D.: brl-tgr.1823
Posted: Tue Oct  1 14:26:50 1985
Date-Received: Sat, 5-Oct-85 03:01:39 EDT
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This is starting to get into the realm of INFO-AUDIO, but I think I
can answer the question.  First note again that the typical cost for
a CD is actually about $1.60, not less than a dollar.  Of course, this
is not where the main price difference between CD's and vinyl appears.
First of all, in major metro areas, the more typical cost for CD's is
not $14 but is rather in the range of $10.95 to $12.95. 
$11.95 is a very common price around L.A., for example.  When looking
at pricing, it must be realized that worldwide CD manufacturing
capacity is very, very low, at least when compared with vinyl.
About 90% of CD's are manufactured outside the U.S. (there is only one
CD plant currently operational in this country), so most discs are
by definition imported.  Lead times for audio CD production can be very
long, since there is massive competition for pressing time.  This
leads to a form of scarcity in a market where CD player sales are growing
very rapidly.  Many record stores are unable to keep enough CURRENT releases
on the shelves at any given time, due to the long lead times for production
and distribution of popular CD's.  These factors all combine to bump the
price up well beyond that for vinyl, which is generally produced "locally"
and in GREAT quantity with very little lead time for production or
distribution.  I believe we'll see that CD pricing will continue to fall
as production capacity (especially domestic capacity) increases.

--Lauren--