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Article #74184

CD-ROM costs

#74184
From: David Robinson
Date: Wed, 19 Jun 1991 21:03
38 lines
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I keep hearing about the cost of a CD-ROM being $2-4 in small quantity
and complaints of people charging higher costs or trying to determine
the appropriate cost.

I think one point people keep missing is that you don't just show up
at a CD publishers (manufacturer?) door with a tar tape and say, "here's
$2000, give me 1000 CD-ROMs".  There is a significant startup cost that
needs to be amortized into the price as well.  For starters, Unix CD-ROM
mastering software cost ~$5K these days. (Anyone want to write a free version?).
Then there is human costs of laying out the disk, cost of computer hardware
and disk space, and finally human costs of packaging, accounting and shipping.

Now these are not HUGE costs but they tend to dwarf the actual CD-ROM 
media costs.  The last issue is trying to predict demand, with tapes
you can buy the media one at a time and "manufacture" one at a time.
With CDs you are stuck buying hundreds at a time, you have to take
into account expected market demand and amortize over the expected sales
and not the manufacturing run size because you may be stuck with surplus
inventory.  Given the realtively rapid changes in GNU software you might
not be able to sell a single run worth.  If you go into the GNU CD of
the month club, could you sell 1000 copies a month?

The bottom line is that CD-ROM technology is very appealing but the
startup costs and the incremental costs make it a difficult and
risky business for small scale publishing.  Just looking at the flap
over the Sun User's Group software CD-ROM, it will sell on the order
of $300 per copy which initially seems high.  When the books are examined
and the actual costs are spread over expected sales $300 is very realistic.

If someone is willing to donate time and resources necessary to publish
cheap and timely FSF software I would love it, but I am not holding my
breath.

	-David
-- 
David Robinson	david@elroy.jpl.nasa.gov 	{decwrl,usc,ames}!elroy!david
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From: david@elroy.jpl.nasa.gov (David Robinson)
Newsgroups: gnu.misc.discuss
Subject: CD-ROM costs
Message-ID: <1991Jun19.210340.23523@elroy.jpl.nasa.gov>
Date: 19 Jun 91 21:03:40 GMT
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Organization: Image Analysis Systems Group, JPL
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