This was from yesterday, but I only now got around to reading it: Orin Kerr quotes Terry Fisher as saying that record companies only make $0.19 per $20.00 CD sold, to which I thought "well, that's crap." My reply was this (sent via e-mail, since they don't have comments on their blog):

I apologize for the lateness of my response, but I only today read your posting on The Volokh Conspiracy about CD prices. I'm not in the music industry, so perhaps I'm missing some important facts from elsewhere. Allow me to question one aspect of your posting: the $1.50 per CD for manufacturing. I can go to Best Buy, Media Play, or Circuit City and buy 100 CD-Rs for $10 nearly anytime. With only a slight bit of preparation (buying the Sunday paper for a week or two), I can find a coupon/rebate combo that results in CD-Rs being free after all the paperwork is filed.

CD-Rs: between $0.00 and $0.10 per
CDs: $1.50

Hmmm ... my "Hollywood accounting" detector is ringing madly. I suspect that most of the cost (beyond what the retail store gets) is inflated tremendously. As I said before, I'm no industry maven, but I can certainly question the accounting practices that cause Toni Braxton to file bankruptcy simultaneous with having a multi-platinum selling CD, the Dixie Chicks telling Dan Rather that their 17-million-selling CD didn't make them millionaires in spite of that representing $200M in revenue, and Courtney Love does the math for us.

All in all, I think somebody's leg is (or legs are) being pulled quite mightily.

Professor Hatch already responded; he said to read the paper because he's just repeating the numbers. I read the paper, and it did absolutely nothing to dispell my unease. I also suspect that these numbers might very well be correct at exactly the same time that Courtney Love's numbers are correct. It's all about where you decide to put the numbers in which column, and where you are when you put them there. I still believe that the record companies are playing fast-n-loose here, although I can't prove it.

And another thing ... if these CDs are created as works-for-hire (which the music industry claims is the case), how come the artist has to bear the cost of the creation? Am I to understand that "40 Grit" gets to pay to create the music, gets to pay for the producer, gets to pay for the studio time, gets to pay for the marketing, gets to pay for damned near everything related to the generation of the content, but the record company owns the result? The record company gets the profits? How exactly do you explain that away without terms like "indentured servitude"?