"Blair P. Houghton" > wrote in message
oups.com...
>
> D.Currie wrote:
>> It always amuses me when someone looks at a CD (music or software) and
>> wonders why it costs so much when it's just a couple pennies worth of
>> plastic. But everyone from the CEO to the guy who cleans the offices at
>> night has to be paid from the "profit" on the CD.
>
> Er, no.
>
> In the corporate world, "profit" is what you have left after the help
> are paid.
>

Note the quote marks around "profit." The right word wasn't coming to mind.
It still isn't.


> It costs about a buck to produce each CD, including labor and
> management and advertising and distribution. And royalties are about
> another dollar.
>
> The other $13.99 is pure cash profit in the record company's bank
> account. Which is why it's so valuable to them to continue to be
> absolutely draconian about intellectual property.
>

I've heard so many different numbers on what it really costs...and it's
going to be different depending on whether we're talking about a
self-pressed CD, a small software company, a big record label, bought direct
from the source, marked up at a retail store, and whether it's software,
music or video on the disk...and frankly I don't care what it is exactly.

My point was that people tend to look at material costs alone and ignore the
fact that even though what you're buying is the tangible product, there's
all sorts of other stuff that has to be paid for. And that's true whether
it's a dime's worth of plastic in a CD or a quarter's worth of ingredients
in a cookie. There's going to be significant markup to cover expenses and
profit, or the business isn't going to be around for long.

Donna