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In Reply to: RE: HJ Lim Complete Beethoven Piano Sonatas $9.99 at iTunes posted by Thornhill on June 05, 2012 at 09:35:04
To me, this is the future of classical music recording. EMI wants to establish Ms. Lim as a major star, and selling her Beethoven set is a good way to do that. I don't need any more Beethoven piano sonata recordings, but I might pay a minimal price for a complete set, and if I like it, I might go see her in concert and buy her recordings of contemporary or unusual repertoire.
After all, Schnabel and Backhaus aren't about to return to the stage or record any contemporary music.
Again, short term it works, I agree, but I'm thinking about the long term implications of constantly pushing prices down. Eventually you go to a point where you cannot make any profit. If there is no profit in recordings, no one is going to make them.
When the price goes too low to make a profit, it stops going down and starts going back up. It's called the market.
Eventually people will expect and believe that low prices are fair prices.
Further, there is such a huge back catalogue that demand can be satiated with releasing those recordings at increasing lower prices. That's what we're seeing right now. It's cheaper for the major labels to release heavily discounted budget boxes, e.g. the new Toscanini set, than actually make a new recording.
"Eventually people will expect and believe that low prices are fair prices."
If low prices are all that people are willing to pay, then the market has spoken.
Prices rise due to demand increases. Then it's time to invest (or get out) to get back in equilibrium.
However, this market is hardly competitive and this is a pure pricing strategy on the part of an oligopolost.
On the other hand, as the OP correctly pointed out, while the cost of making and marketing information may be high, transmitting that information (per unit) costs almost nothing. Given this problem (pointed out by Arrow), there tends to be under-investment by producers in information, and it is optimal. Hence, copywrite laws.
Observe, don't think
And now that anyone, including the musicians themselves, can produce recordings and sell them on the internet, the few remaining "major" labels like EMI add less value and accordingly must charge less to keep any market share at all. I suppose there is still some prestige in being with the EMI label, but I wonder how long that will last.
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