There is simply NO justification for the prices upwards from 8-10 €/$ for a CD. No way in hell. A raw CD costs what, 10 cents? Add another 20 for the inlay and packaging, another 50 for the artist (and his/hers management). The rest is just for the greedy record company. The amount going into ads, promo etc. is maybe 1-2€ per album, about as much for the salaries and expenses.
So that leaves us with huge earnings of about at least 15€ for a CD costing 20€. This is sick and I'd rather die than support that blatant ripoff.
Also, I don't pirate music. I mostly buy used CD's or from abroad where the prices are still somewhat acceptable.
And to the big record companies: suck my balls, you greedy f'in idiots!
Records label don't earn all the much per CD. A large share of the final CD price ends up in the hands of the distributor and the retailer. Big record companies aren't as affected by this because they run their own distribution channels but nevertheless, retail takes a huge cut.
Smaller record labels have to either pay a distributor to get the CDs into the major retail channel or they have to directly deal with the questionable business practices of Amazon, Apple etc., who do their best to rip off smaller volume publishers and individual recording artists who try to publish their music themselves.
If a smaller volume publisher (who used to sell CD through the traditional specialized music mail order retailers) tries to sell CDs on Amazon, they often end up losing money. Amazon pays them significantly less and combined with the fact that some of the sales, that could have been made through other retailers, switch to Amazon often results in record labels earning less money while selling more CDs.
A few months ago, I asked a friend of mine, who runs a small Black Metal label, why none of the CDs are available on Amazon and he essentially told me that he'd go bancrupt within 3 months if the started to sell CDs through Amazon.
From what I've heard, the situation with iTunes is even more dire. For many small labels, selling music on iTunes means losing money because of lower sales in retail channels that actually offer a profit margin for the record label. And the "offline" retail market is utterly dominated by retail chains like Media Markt in Germany or Wal Mart in the USA, who aren't that much better than their eCommerce counterparts.
The only labels that can realistically survive under these conditions are those that can employ the economics of scale, i.e. exactly those labels who make their money by churning out inane shit for the masses - a business model that is rapidly failing.
So that's the current situation. Specialized reocrd stores have died a long time ago. The business model of large retailers (Amazon, Media Markt in Germany, Wal Mart in the US) favours large labels. The record labels' business model cannot be changed because you need to employ the economics of scale in order to earn any money under these conditions. So the music business is locked into a business model that is failing (i.e. produce high volume products for the masses instead of music as a cultural good).
Frankly, right now, I think the available retail channels are a HUGE part of the problem, and yes, that includes iTunes. They're as much of a problem as the major labels that have been devaluating music by producing inane shit. Also, the big record labels aren't all that bad. AT LEAST THEY PAY THE ARTISTS. Ripping off recording artists is much, much more common with small labels.
The problem is complex, there are shades of grey and it's not just TEH EBIL RECORD LABELS. I mean, look at the recent escalation of CD prices at Amazon.de. Many new CDs now have a price tag of €19.95. And I KNOW that it's not the labels doing this because you can buy the same CDs elsewhere for €15.
The heavyweight retailers are constantly driving up prices, they have blocked ALL attempts by labels to lower the retail prices of CDs (and there have been numerous attempts), which, realistically, can only be done when labels, distributors and retailers work together. As long as the retailers don't play along (and they never will), CDs won't get any cheaper. In fact, the retailers escalate CD prices whenever they can get away with, while milking the labels and artists for what they're worth.
