Digital Audio Insider -- the economics of music and other digital content

home

about/contact
Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

My personal website has links to my LinkedIn and Google+ pages and you can send e-mail to david [at] thelayaways [dot] com.

Support
If you enjoy this site, please consider downloading a Layaways track or album from iTunes, Amazon MP3, Bandcamp, or eMusic. CDs are available from CD Baby and Amazon.

links

music/media/tech:
Analog Industries
Ars Technica
AppleInsider
Brad Sucks Blog
Broken Record
Digital Music News
Duke Listens
Future of Music Coalition Blog
Hypebot
LA Times Technology Blog
The ListeNerd
Medialoper
Mediashift
MP3 Insider
Music Ally
Music Machinery
Music Think Tank
MusicTank
The Music Void
New Music Strategies
Online Fandom
Pakman's Blog
RAIN
Rough Type
RoughlyDrafted
Swindleeeee
TuneTuzer
Virtual Economics

economics/markets:
The Big Picture
Core Economics
Freakonomics
The Long Tail
Marginal Revolution
The Undercover Economist

mp3/music:
17 Dots
3hive
Fingertips
Shake Your Fist
Sounds Like the 80s
Unleash the Love

archives
January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
May 2010
June 2010
July 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
June 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
April 2012
May 2012
June 2012
August 2012
October 2012
November 2012
December 2012
January 2013
February 2013
March 2013
June 2013
August 2013
February 2014
March 2014
September 2014
December 2014
March 2015
October 2015
November 2015
December 2015
October 2016
May 2017

April 27, 2012

Diving Into Amazon's Music Trade-In Service
by David Harrell

The prices of used CDs might seem somewhat tangential to the price of music purchased as digital downloads. Yet I've long maintained that the amount consumers can receive for their used CDs is extremely relevant to any discussion of the prices of digital content relative to physical products. Even if you never choose to sell a purchased CD, the potential value of such a sale can be factored into the purchase price. Purchasers of digital music, however, don't have that option, unless ReDigi is able withstand the legal challenges from record labels and establish a thriving market for "used" digital content.

Amazon's trade-in service, which was recently expanded to include music CDs, provides an extremely efficient (though not particularly lucrative) way for music consumers to extract value from their unwanted CDs. Given that the quoted trade-in offers are probably based on an algorithm that considers the current prices for used copies of individual CDs and the number of copies available to buy, you could argue that the new service doesn't provide any additional insight into prices for used CDs.

Yet it's still fascinating to see how much Amazon (or its third-party buyer, to be precise) is offering for a disc. And unlike the prices for new music, here you'll see a great deal of variation, based on the supply and demand for each individual release.

If you're looking to sell your discs, the prices Amazon offers are all less than the prices set by individual sellers. In other words, you'd probably do better selling any individual CD directly to an Amazon.com customer. That method is also preferable if want cash for your discs -- the trade-in service only gives you an Amazon store credit. But selling to Amazon eliminates most of the hassle factor -- instead of listing your discs individually, waiting for someone to buy them, and then having to mail them off to each buyer, you can put them all in a box and print a pre-paid shipping label. (There's also the option of trying your luck at a local record store that buys used discs, though it's difficult to make large-scale pricing comparisons, as an individual store's inventory needs will affect the prices offered for specific discs.)

I did a quick survey last week of the current top-selling CDs on Amazon.com, which I had to expand to the top-13 discs, as three of the top-10 sellers hadn't been released yet, so there was no trade-in option for them. And, somewhat surprisingly, Amazon wasn't making a trade-in offer for four of the other top-selling releases.

prices Amazon.com is paying for CD trade-ins

prices Amazon.com is paying for CD trade-ins

all prices as of 4/18/2012

Of the remaining six CDs, Amazon's current price for the new CD ranged from $7.99 to $11.99, with an average of $10.24. The trade-in offers ranged from $2.00 (Adele's "21") to $3.70 (Lionel Richie's "Tuskegee"), with an average of $2.83. These numbers are all "up to" amounts, however, and assume that the disc and the jewel case are in "like new" condition.

The interface also makes it easy to see the range of prices Amazon's third-party buyer is willing to pay for different releases in an artist's catalog. Again, unlike the prices for new music, here you'll see a great deal of variation. In general, Amazon offers the largest trade-in amount for an artist's most-recent release. And an act's earliest albums, even if they're considered classics, often have the lowest trade-in value. For example, Amazon is offering up to $3.95 for Van Halen's comeback album "A Different Kind of Truth," but just 65 and 95 cents respectively for the band's first and second releases. But that variation just reflects the supply and demand of existing CDs -- the fan base of any given artist is both more likely to already own the act's earliest releases and have more copies of those CDs to sell, depressing the price.

Another obvious trend is that the release of new re-mastered CD decimates the trade-in value of the previous version. Amazon is offering up to $4.80 for the 2009 version of the Beatles "Blue" collection but only $1.50 for the original CD release.

As for those one-cent used CDs you see on Amazon (the sellers actually make their money on a cut of the shipping charges), don't bother -- Amazon doesn't want them. But just because a portion of the artist's catalog is in the one-cent category, it doesn't mean that Amazon won't purchase other releases -- it's offering up to $4.05 for a live Hootie & the Blowfish album, even though it won't purchase the band's best-selling studio albums.

Finally, on a relative basis, Amazon's quoted trade-in amount is the least generous for out-of-print CDs that are commanding high prices in the used market. For example, when checking the trade-in value of Lionel Richie's current best-selling disc, I discovered that Amazon is will to pay up to $5.50 for the soundtrack to the 1981 film Endless Love, featuring Lionel Richie. But the lowest price for the used CD from individual sellers is a whopping $69.39, though who knows how long it'd take to sell the disc at that price!

Labels: Amazon, used CDs

link 0 comments e-mail listen to the Layaways on Spotify

Follow @digitalaudio

More Digital Audio Insider: Newer Posts Older Posts

Subscribe:

RSS Feed

Add this blog to Del.icio.us, Digg, or Furl. Follow David Harrell on Google+.

The Digital Audio Insider Twitter feed:

Apple stock analysis

Digital music jobs: Looking to hire? Looking for a job? Check out the digital audio insider job board.

THE LAYAWAYS

Out Now -- "Maybe Next Year" -- The New Holiday Album:

"This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

"Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs

O Christmas Tree - free mp3 lyrics and song details
Away In A Manger - free mp3

Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at Last.fm.

"...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

"Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

"...melodic, garage-influenced shoegaze." -- RCRD LBL

Where The Conversation Ends - free mp3
January - free mp3
Keep It To Yourself - free mp3

Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at Last.fm or Napster.

"The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

"Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

Silence - free mp3 lyrics and song details
The Long Night - free mp3

Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.

"These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

Let Me In - free mp3
Ocean Blue - free mp3

Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.

More Layaways downloads:

the layaways website