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Question about AJ's article on main site

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Active Member
Joined: 19 years ago
Posts: 4
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AJ's article "Piecing the Puzzle" covered alot of great topics, including Sony's illegal inflation of CD prices. I was just wondering if somebody on the forum could provide me with a little more information:
A couple of years later, a company in Toronto came up with a way to burn CDs at a fraction of the cost.

What company was this?
Meaning that if you buy a $20 CD off HMV's website, in MP3 format, your giving the artist about $1 and the record company about $12. HMV are making a bit more money than if you bought the real CD in their store, but not much more.

So $1 to the artist, $12 to the record company...where's the other $7?
A few years ago, some American guy decided to sue these major labels in a collective suit. If he had won his case, CD prices would have had to go down, and actually be sold at a loss for these companies for a while, until they got to the point where they would have lost as much as their last 15 years of profit.

There was no way the record companies could win this case. It would be impossible for them to prove that they never inflated their prices. So they bought the guy out. That simple. And we're still paying highly exaggerated prices.

Who's this guy, and what are the details surrounding the case?

Any help would be appreciated as this is a topic for a school presentation.

(Note: If I've got this in the wrong forum, my apologies.)

Estimable Member
Joined: 22 years ago
Posts: 173

the other $7 probably goes to the store that sells the CD

currently number 60 in total posts... and shooting for number 1!!

Estimable Member
Joined: 16 years ago
Posts: 121

The other $7 is distributed between the label and the distributor, with the label picking up between $5 and $6 of that. HMV make typically about 50 cents off a sale. However, they pay for only 85% of the stock they get, the other 15% is freebies; that's how they can offer sale prices. The 15% they don't pay for is taken out of the artist's share.

Read this article I wrote on the subject:

It's called "Where Does all the Money Go?" It's based on facts, some of them from Mark Makoway (Moist) and other places. You can research the facts; some people will come up with a few differences, but the bottom line is the same. Want to make money? Start a label. Want to make money making music? Sell a lot of T-Shirts...