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If a CD sells for $20 and costs, say $2 to make, the markup is $18 or 900%, nine times what it cost. In any real market this is insane. If a retailer were to sell using 40% as a markup the price would be $3.34 per CD.

The Apple iTunes store sells and entire album for less then $10. Of that $10, Apple get's 40% and the rest goes to the label (and presumably a little of it goes to the artist).

As you point out, it probably costs $2 or even less to manufacture and ship that CD to a store. So even at $12, everybody is making lot's of money. So why do they sell for $18.99, or $20.99 or higher? A double CD for $40? It's an insane model and enough for any reasonably intelligent person, to know that they are being ripped off -- so they don't buy. It's also known as the 6 CD sales model. Consumers can only afford, on average, to buy 6 CD's a year. And the cartel has the audacity to say that they don't buy because they download. Please.

Now, if these lawyers could only lay off their coke habit and Hilldabeast worship long enough to study some economics, maybe they would get ahead.

Not only are the labels pricing themselves out of the market, they are going after the fans and not the real pirates, such as those operations that make entirely COUNTERFEIT CD's which you can buy all over the place in NYC for $5. Then again, being that they are organized crime lords, they probably get a cut from the gangs that produce those products too.

It's also known as the 6 CD sales model. Consumers can only afford, on average, to buy 6 CD's a year.

Hadn't heard of this but it describes my buying habit pretty well. While browsing a CD rack I'll often find two or three that I'd like to buy but usually decide on one as the combined amount seems way too high. I usually find other ways to maximize my utility with the unspent $40.(Like gas to drive the rest of the week)