Because they have been stealing from you. The record industry over the last twenty years has lied time and time again to justify the raising of prices on music.
LIE #1 First, we have the advent of the CD. CDs were priced at around $13 when they came on the market, in contrast to record albums and cassette tapes that they charged around $7 for. While the sound quality was “better” and allowed for easy track access, they were much cheaper to produce, and were cheaper to ship than record albums. Less CDs were returned to the manufacturers due to breakage as well. In other words, they charged a lot more for a product that was cheaper to produce.
LIE #2 CDs climbed to $18 retail for no reason at all in the early nineties. After failing to get used record stores closed, the record industry cited used CDs cutting into sales as an excuse for the price raise. Used CDs were a negligible part of the market, as the bulk is made up in new album sales. Catalogue titles were important, but not to the tune of another $5 per purchase.
LIE #3 the industry has no money to discover and develop new talent. Without the profits of the major hit albums to buoy them, they can no longer do quality A&R. This is a load of crap as well. Since the mid nineties, the industry has churned out Britney Spears and her minions, truly the attack of the clones. The labels find a hot trend and copy it ad nauseam, a safe and profitable strategy. Also, it seems much of the A&R work is now done through the American Idol television show.
LIE #4 Now, they are at it again. Legit music downloading from i-tunes is the subject of recent industry saber-rattling. The industry would have you believe that $1 per song is killing their profits and that the rate must be raised. The truth is that via downloading, the industry doesn’t have to pay a dime for storage, distribution, or breakage. They simply have to pay for album production and marketing (which they recoup from the artists anyway). The reality is that downloading offers the consumer flexibility, and the problem for the labels is that no one is going to give them $18 bucks for two good songs and 45 minutes of what is euphemistically called “filler”.
The industry would have been happy to continue charging ridiculous rates for the monopolies it has on the distribution of music, but super-retailers were eventually able to use their retailing power to argue prices down. The real friend of the music purchaser, however, is the free downloader. The industry realizes people will not pay exorbitant prices for a product they can substantially get for free, so the industry dropped new release prices to around $13 again. I currently download from i-tunes, but if the industry gets cute and raises my download prices, I may join the consumer revolt and the wild west of free music. Tommy Mottola will just have to live with one less super mansion to show off on “Cribs”.