Tom Connor responds to Roger Hecht:

>>What does puzzle me is the full-price labels that record performers
>>no better known than those Naxos uses.  Why are those CDs so expensive.
>
>I think the above is well put, but we should not underestimate another
>side, cost is not the whole thing.  People are willing to pay more.

Tom is correct that both supply and demand factors are critical in
determining price levels.  And, it's also true that the major record
companies "expected" that people would keep paying full-price for lesser
known performers.  However, this expectation has already "bit the dust"
as the majors have cut way down on new releases.  EMI has even initiated
a series, at relatively low price, of recordings from new artists.  Ditto
for Harmonia Mundi as well.

These trends, which are good for the consumer, will continue well into the
future.  The majors were hoping that they could sell relatively unknown
performers into our homes at full price with some good marketing ploys and
justifications involving supply-side economics (such as the "overhead" Dave
mentioned).  But, no matter what the costs of production, there has to be
sufficient demand.  In this case, it was not sufficient, and the companies
have been forced to change their ways.

Given the above, I think that the most significant impact of Naxos has not
been to provide consumers quality music at low cost, but the impacts that
it has had and will continue to have on the operations and strategies of
other record companies.  A company really knows it's on the right track
when other companies within its market are "responding" to it.

Don Satz
[log in to unmask]