Hello, Googlians.

This is certainly pissing me off. In the bad old days, TV ads offered
music recordings in LP, cassette, or 8-track tape. LP's were the
cheapest to buy, which seemed reasonable as there were no moving parts
on a simple plastic disk.
 
Now I see ads for movies and music that say DVD's/CD's cost more than
video tapes and cassettes ($21 vs $19). What the hell is this? I've
been at this Internet thing since before Google existed, but I haven't been able
to Google-up an answer to this one. (My guess is that we are being
hosed)

Thank you for your time.

---

Clarification of Question by calaboss-ga on 28 Apr 2003 10:36 PDT

A fine response, tisme. I'd like to see some others, but I'll pay you
(with tip) if this question does not get a better answer. I think that
current technology permits banks of DVD burners to copy CD's/DVD's
faster and cheaper than tape recorders. If I'm mistaken about this,
it's only because I haven't found data indicating otherwise.

Hello calaboss, 

I was pleased that you liked my comment so I decided to research the
question for you properly. :)

I found a fascinating article dated May 11, 2000 on CNN with this
excerpt: "The music biz's Big Five -- Sony, Bertelsmann, EMI,
Universal and Time Warner (corporate cousin to this web site) -- which
control 85 percent of the $15 billion CD market, settled with the FTC
Wednesday on charges that they've been leaning for years on music
retailers to fix CD prices by threatening to withhold promotional
budgets from stores that don't adhere to a so-called "minimum
advertised price" (MAP). The three-year price-fixing binge, according
to FTC chairman Robert Pitofsky, cost consumers a total of $480
million."
Source: 
http://www.cnn.com/2000/SHOWBIZ/Music/05/11/music5_11.a.tm/index.html
Usenet article claiming DVD cost of production is higher (although
estimates): http://groups.google.ca/groups?q=cost+difference+DVD+VHS+media&hl=en&lr=&ie=UTF-8&oe=UTF-8&selm=4af99304.0301230216.7537714c%40posting.google.com&rnum=1

Here is the usenet post where the above article came from which I
highly recommend that you read:
http://groups.google.ca/groups?q=cost+difference+DVD+VHS+media&hl=en&lr=&ie=UTF-8&oe=UTF-8&selm=393C1C2A.99AA27DE%40zenera.com&rnum=2

You can take a look at the entire thread here:
http://groups.google.ca/groups?hl=en&lr=&ie=UTF-8&oe=UTF-8&threadm=393C1C2A.99AA27DE%40zenera.com&rnum=2&prev=/groups%3Fq%3Dcost%2Bdifference%2BDVD%2BVHS%2Bmedia%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26selm%3D393C1C2A.99AA27DE%2540zenera.com%26rnum%3D2

Another interesting discussion can be found here:
http://groups.google.ca/groups?hl=en&lr=&ie=UTF-8&oe=UTF-8&threadm=4af99304.0301230216.7537714c%40posting.google.com&rnum=1&prev=/groups%3Fq%3Dcost%2Bdifference%2BDVD%2BVHS%2Bmedia%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26selm%3D4af99304.0301230216.7537714c%2540posting.google.com%26rnum%3D1

Yet another usenet article:
http://groups.google.ca/groups?q=cost+difference+DVD+VHS+media&start=10&hl=en&lr=&ie=UTF-8&oe=UTF-8&selm=1dob92a.1czbc8sog62gcN%40odonohoe.demon.co.uk&rnum=17

This article documents one of the reasons I had listed in my earlier
comment: http://www.dvdadept.com/DVDvsVHS.asp "Unlike a tape playing
on a VCR player, the DVD disc is not touched by any mechanical part.
Only a beam of laser light touches the disc. So even after 100"s of
plays, the DVD disc has no wear characteristics."

Finally, it does appear that at least with some companies, the price
for DVD is lower than the same VHS counterpart, even if the VHS has
less features. On Amazon.com for example, the list price for Harry
Potter and the Chamber of Secrets DVD is $29.95, but they are selling
it for $17.86. This is the widescreen edition with tons of special
features: http://www.amazon.com/exec/obidos/tg/detail/-/B00008DDXC/qid=/br=1-2/ref=br_lf__2//002-1807958-5591253?v=glance&n=909656
The VHS on the other hand, has a list price of $24.99 but they are
selling it for $20.99, without the extra features, and it is not
widescreen either! See here:
http://www.amazon.com/exec/obidos/ASIN/B00008DDXB/ref=ed_oe_vhs/002-1807958-5591253

Here is the opinion of one person: "It's a known fact, DVD's cost much
less than VHS tapes to mass produce. These savings are not being
passed on to the customer. Obviously, like it's sister format the CD,
the industry behind it is setting a price far above the real cost, a
price calculated to achieve maximum profit margins. Instead of being
ripped off, ask yourself: do I really need to own that DVD?" Source
(takes awhile to load):
://www.google.ca/search?q=cache:Owf0shDbGp0C:guymcarthur.com/resources/articles/dvd.xml+%22dvd+cost%22+vhs&hl=en&ie=UTF-8

Perhaps part of this is a volume thing... as more people are buying
dvds, the cost will go down as well. It certainly seems that the
"official" prices are not yet being touched though, and Amazon.com is
probably making a lot let per dvd sold vs. a vhs sold. It certainly is
the case too that most DVDs are still more expensive than VHS.

Onwards to CD vs. cassette

The first website that I want to point out is this one:
http://homepage.tinet.ie/~kerrymusic/pats04.htm This demonstrates very
clearly why smaller artists price their cds much higher than their
cassettes. "Cassettes are a direct duplication medium in that there is
little trouble going from the master to cassette. Mass produced CD's
are a very different matter. A glass master has to be made from which
moulded stampers are then made. They are then stamped much the same
way as the old vinyl record was. This initial stage however is costly
and has to be done regardless of the numbers."

This of course does not give an excuse to the record labels who price
cds way above cassettes and I found a wealth of links for you on this:

Excerpt: "The truth is that the music industry is greedy. They can
charge us anything they want for music because they have enough money
to buy the rights to an artist. The price of CDs should have been
drastically reduced by now, to at least the cost of a tape if not
less, but it hasn't." http://maddox.xmission.com/musicindustry.html

Another rant can be found here showing that the cost of CDs have
actually INCREASED since they first came out:
http://www.randyrants.com/archives/000112.asp

This person suggests that the cost of production is fixed:
http://groups.google.ca/groups?q=%22cd+cost%22+cassette+%22cost+of+production%22&hl=en&lr=&ie=UTF-8&oe=UTF-8&selm=4shk76%2477o%40mtinsc01-mgt.ops.worldnet.att.net&rnum=1

Another interesting Usenet post:
http://groups.google.ca/groups?q=%22cd+cost%22+cassette&hl=en&lr=&ie=UTF-8&oe=UTF-8&selm=38CB0207.79ED0CEE%40pitt.edu&rnum=2

Take a look at this thread as well, specifically 17, 18 and 19:
http://groups.google.ca/groups?hl=en&lr=&ie=UTF-8&oe=UTF-8&threadm=ps.792249489%40EL&rnum=6&prev=/groups%3Fq%3D%2522cd%2Bcost%2522%2Bcassette%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26selm%3Dps.792249489%2540EL%26rnum%3D6

In conclusion, I guess you are right and we are being ripped off...
but ONLY if we are willing to pay more money. Personally, I only get
DVDs when the DVD is really worth it... and then I justify the extra
money because of the extras that are included and the premium video
and sound. I would probably buy a lot more DVDs and CDs though if the
price was more similar to cassette/vhs. Then again, listening to the
radio is better IMO when driving and when I am at the computer I can
stream music videos from http://launch.yahoo.com I noticed that on
USENET, whenever someone claimed that the higher price was justified,
they were easily taken down by someone who knew what the actual costs
were like and the person was usually unsuccessful in making a comeback
(if they even tried).

Finally, while this link is not really on topic, you might still find
it an interesting read:
http://slashdot.org/articles/01/02/26/1812213.shtml

Search Strategy (on Google):

cost difference DVD VHS media
dvd costs
"dvd cost" vhs
"cd cost" cassette

Well done, tisme. For two bucks, I was expecting an answer more along
the lines of, "Yup, your being hosed." After checking the links you
provided, it seems that "Yup, we're being hosed." But I liked seeing
it printed in a well thought out manner.

Thanks to the others that commented too. (although you folks don't get
a dime)

I found that generally it costs more to make CDs than it does to make
cassettes. Here is just one example:
http://www.double-edge.com/duplication/cd-cassette.html

I also recommend that you read this article on CD cost:
http://www.outsideshore.com/cadenza/cd_costs.htm

Here is a breakdown of where the money goes from CNN:
http://www.cnn.com/interactive/entertainment/0101/cd.price/frameset.exclude.html

I understand that this does not answer your question, but perhaps you
might find it somewhat interesting. As for the reason that CDs are
more expensive than cassettes, I think it could be the fact that
because it is a newer technology, the price for such media is higher.
There are probably so many commercial cassette duplicators and VHS
duplicators that it is much cheaper to make copies. Also, another
guess is that cassettes are a way to get extra money for selling a
"lower end" product. Finally, I think the cost of DVDs over VHS can be
understood in that they are usually much better quality with tons of
extras. Why do studios not release dvds with vhs quality video/audio
for a lower price? Finally, CDs and DVDs generally LAST longer meaning
that the person will not have to purchase another copy if they watch
it more often.

Hope this answer is useful. I do agree that DVDs and CDs are
overpriced and I would be purchasing many more of them if the prices
were lower. For me to buy a CD or DVD versus listening to the radio...
it has to be really worth the price for the entire cd. Then again, the
music/video industry no doubt has people who "know what they are
doing". :-P

The real anwer to this although it would be hard to 'prove' is simple
supply and demand. They charge more because they can! -shiva777

Just wanted to add to the informative answer that there are a couple
of other issues that affect the prices of cds.  You can also find more
info on the price fixing and outcome of the class action at the
following link.  I am part of the class action, and have been for many
months, but really have not received any updates on the situation as
of yet. www.musiccdsettlement.com/english/default.htm
Also, originally, the high prices of CD's were, at least somewhat,
attributed to the fact that artists were making much more flamboyant
videos that cost millions to produce...The new technology offered in
cds was seen as a way to raise these funds.  Obviously, though, the
"technology is better" argument doesn't really hold much water, as the
price surely would have dropped over time, as with all technology. 
Once this higher pricing structure "stuck" you can see why the music
industry decided not to lower the prices, ever.  The links in your
formal answer all look to have good info, as well.
Thank Michael Jackson and P. Diddy for their conpicuous consumption
music videos for the high prices you're paying.
Hope this helps.