RIAA: Out To Lunch <em>And</em> Bad At Math

Tucked inside the Recording Industry Association of America’s Web site is a defense of CD pricing that proclaims how people who still pay for music are getting a good deal for their money. But a commentator on a Kentucky TV station isn’t so sure:

The biggest argument appears to be the fact that the Consumer Price Index rose nearly 60 percent between 1983 and 1996, even though the price of a CD actually went down. While this might be a true statement, this is virtually worthless in determining how much a CD should cost.

Let’s examine this statement, directly from the website:If CD prices had risen at the same rate as consumer prices over this period, the average retail price of a CD in 1996 would have been $33.86 instead of $12.75.

I know that the CPI has risen, but these numbers don’t seem to translate properly. So I visited the Bureau of Labor Statistics Data site u>, which contains a CPI Inflation Calculator. Unfortunately, I needed the initial value (of a CD in 1983), instead of the theoretical value in 1996. Since I didn’t have that, I just guessed until I came up with $33.86 in 1996. I finally found that value: $21.50.

This means that the RIAA is claiming that the average cost of a CD in 1983 was $21.50.

Which means they’re engaging in some mathematical sleight-of-hand: According to this Frontline article, CDs cost around $15 when they were first brought to the market–twice the price of LPs and cassettes at the time, but nowhere near the $20 mark. And those of you who were around at the time may remember that when CDs were first introduced, record companies swore up and down that prices would eventually fall after the manufacturing technology improved. Remember those days? We do, although we’ll probably get another cease-and-desist from the RIAA for saying so.

The cost of a CD should be exponentially higher, according to the RIAA [whas11.com] the way the music died : inside the music business : faqs [pbs.org] Earlier: More Proof That The RIAA Is Out To Lunch