| Artists and producers put a lot of hard work into an album, and when we download music we screw them over financially. This seems wrong to me, but I won't go into ethics; I will talk numbers. It's true that a compact disc costs the consumer $17, but it only costs the manufacturer $2 to produce it... sort of. But not really. While the actual factory manufacturing expenses are very low, we must take into consideration the other costs of producing a CD for consumer sales.
This is the cost and profit breakdown for a typical CD:
Manufacturer's Costs:
Recording expense: $.065
Manufacturing expense: $1.25
Packaging: $1.30
Advertising and promotion: $2.00
Artist's royalty: $1.60
Freight: $0.09
Payment to musician's trust fund: $0.65
Manufacturer's Profit: $2.94
Distributor's expenses and profit: $1.50
Retailer's expenses and profit: $5.00
TOTAL: $16.98
Producing a CD involves many more people than just the artist and record executives. It also involves the owners of the recording studios, people who package the product, advertising companies, owners of the media in which the album is advertised, shipping companies, distributors, and retailers. As you can see, the largest chunk of money is not made by the record company, but is made by the the retailer from whom the CD is bought.
People who download music should also understand that listening to mp3s hurts the artist much, much more than it hurts the record companies. Before the artist gets a cent, the record company must make back what they spent on the artist's album. If people download mp3s rather then buy CDs, then the record company doesn't break even, and the artist is out of luck, as is the artist's family. The advent of mp3s has cost record companies and artists dearly. Record companies are now much more cautious about who they sign, and good talent that isn't neccesarily "a sure thing" never makes it to the store shelves. Thus, we're stuck with Britney and Justin.
How do I know? 1. Dear ones who are hurting. 2. I interviewed a woman from Capitol records who came to my school to talk to the mass comunications department. She's the one that told me about the reluctance to sign new talent.
I say we're getting what we pay for. | 
