Moving through aisles, flipping through discs, you find your prize. You cruise to the counter, CD in one hand, cash in the other. You nod and fork over your money. Most consumers these days feel they pay too much for compact discs. Although distributors recently raised prices 30 cents for retailers, according to Wiseman, record stores can't raise prices any more because consumers already feel like they are being overcharged.
Record companies offer several explanations.
The distributors hike up prices to make themselves more money. All we deal with is the record label's percentage and ours. The consumer really doesn't get that much of a markup because there's so much of a cost for marketing, production, royalties and so forth. Not all record companies deal with independent distributors, so distribution is hardly the lone culprit for high-priced CDs. Interscope marketing guru Staci Yamano says that her company's product, along with Geffen's and MCA's, is distributed by Universal.