Originally Posted by Alan
But the costs for producing the actual CD is the smaller if not the smallest part of all costs. Artist, manager, producer, publisher, advertiser ... they all want a piece of the cake. And because of inflation, prices are easily 40-50 % higher than they were 10 or 15 years ago. Taking this into account, the inflation adjusted price of a CD will hardly be much higher than some 15 years ago. At least I doubt this very much.
The problem with this argument is that prices are determined by demand and offer not by production costs. This is a very important reason for the failure or low market share of many products otherwise arguably superior or at least useful in a different way than the market dominant products (think Betamax, Apple computers, video phones, e-books)
Right now for various reasons the market price of music is coming down big time, so it's irrelevant to talk about those costs. Either music producers will survive at those lower prices (for example doing more concerts) or they will go out of business.
Incidentally, the market price of books is NOT
(at least yet) coming down.