I used to think the film industry was smart and fair, relatively speaking, compared with the music industry (and I emphasize the word relatively). I based this mainly on a comparison of the cost and value of a mainstream film, released on DVD, and a mainstream album on CD.

A Hollywood film typically has a budget upwards of $USD 20 million, and requires hundreds of people to make. Everyone knows this.

The recording budget for a major label album is around.. well, no one has a clue. The RIAA wants us to believe it’s expensive, but they’re not even hinting at actual numbers. It might take dozens of people to make, if you count the lawyers.

The best figures I can find suggest major label studio recording budgets probably average somewhere in the $USD hundreds of thousands per album for established, popular artists. The big names might spend USD 100,000 on a song, maybe a million or so on an album. Only the rarest exceptions approach the budget of a minor Hollywood film, and most of that is spent on advertising.

At the time of its release, the Hollywood DVD will probably retail for a list price of around $USD 25-35 (typically $AUD 35-45 here in Australia). There will usually be two versions, a bare-bones budget release and a two (or three or four) disc “collectors’” edition. It’s not uncommon to find DVDs retailing for less than $AUD 20 (around $USD 15) just a few months later. Even the budget edition probably includes some bonus deleted scenes and a behind-the-scenes documentary.

The major label album will have a list price of about $USD 17-19 (usually around $AUD 32 in the full-price stores here). You might get a bonus disc with some live tracks or a music video at that price, but don’t count on it. If you’re lucky, the price will drop by about a third.. several years after its initial release.

It’s not uncommon for the DVD movie ($AUD 20.96) to be significantly cheaper than its own CD soundtrack ($AUD 27.21), even in the same store. The cheaper product has better sound quality, runs twice as long, and is a movie fer cryin’ out loud.

The production budget for the cheaper, superior product was probably at least 20 times that of the more expensive, inferior one. It may have been 100 times greater, or more.

Both will likely have ineffective copy protection mechanisms. The more expensive product is more likely to damage your computer.

When it comes to producing and shipping physical products, Hollywood beats Tin Pan Alley hands down.

On the internet, it’s a different story.

The recording industry hasn’t exactly embraced music downloading, but its beatings are administered with declining enthusiasm. Apple managed to convince a few record labels, to much protest, that they ought to just shut up and start accepting bags of cash in exchange for doing absolutely nothing¹. They launched with 200,000 songs available, and sold a billion at $0.99 apiece.

A new release music album sells for $US 9.99 in the iTunes store. In the Australian version, it’s $AUD 17.99 (about $USD 12.80). That’s significantly less than the physical CD – just over half the price. It’s copy protected, just like the CD, and doesn’t come with the flimsy booklet or fragile case, but it’s a good enough compromise to be enormously popular. You can copy songs onto an iPod for portable listening, or burn them onto a CD.

Three years late to the party, and what does Hollywood bring? Downloadable movies that you can only watch on a Windows PC, can only copy once, and cost more than the DVD.

There’ll be “more than 100” of these crippled, overpriced movies available for your enjoyment. Never mind the thousands of unreleased and out-of-print classics decaying slowly in studio basements.

The MPAA could stand to learn something about customer service from the RIAA. Relatively speaking.

One day I’ll download a good, legal, useful copy of Double Indemnity for the price of a few beers. But it’ll be a tech company, not Hollywood, who sells it to me.

¹ Right on cue, the music industry wants to screw this up anyway.