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This is my attempt to answer a question I am sometimes asked, "What makes certain CDs worth so much money?" The basic answer comes straight out of any basic economics textbook -- in a free market, price is determined by supply (scarcity) and demand. The most valuable compact discs are those with limited supply and high demand. Demand is determined by consumers, supply (usually) by the record label that released the disc. In situations where the supply does not meet the demand, the prices for that CD have risen above "average" values. Generally speaking, these situations occur when a disc is no longer available or "in print," so only a scarce number of copies are available to those who wish to own one. The bulk of this essay will cover a number of such basic situations where this has occurred, resulting in valuable "collectable" compact discs. These are based on my experience as a collector of pop/rock/alternative discs; there are other similar situations regarding other types of discs (i.e. classical, jazz, soundtracks) that I am not familiar with.

Determining Value

A side issue here is how one goes about determining the value of a disc. The strict answer is that a CD is worth what someone is willing to pay for it. Strictly speaking, a disc may not be worth the price for which it is listed in a "set price" situation; finding a CD listed for sale for $100.00 does not make it worth that much; it may well be available elsewhere for less, and the copy may never sell for that price.

Auctions on the Internet have made a big difference in the perceived values of compact discs. Looking at listings of completed sales on such sites as eBay are fairly good indicators of the values of discs (but be aware that not all such listings represent completed sales; someone that bid an excessive price for a disc may well stiff the seller). Also, these values are rather higher than most folks have expected; all it takes is two potential buyers anywhere from around the world with money to burn, and a scarce disc will be bid up to an amazingly high price. If possible, watch over time for the sale of several copies of a disc for which you want to find the value, and then average the sale prices together. This is the method used by most price guidebooks for collectables.

Price Fluctuations

Back again to the issues of supply and demand; these factors will change over time (sometimes slowly, sometimes dramatically fast) causing changes in the values for sought-after CDs. If an artist becomes more popular and gains a larger fan base, early out-of-print recordings will rise in value as the demand increases. However, if the label then decides to reissue these discs, the supply is increased to meet the demand and the price will then drop. If a lawsuit results in a CD being pulled from the market, the supply is shut off and often collector demand increases due to the notoriety, leading to sharp increases in value for these discs. Another trend I've seen is for limited edition discs of various types to sell for high prices soon after they are released, only to see the price settle down once the "hard core" fans and collectors have all gotten a copy and the demand drops from the initial peak.

The potential for a value-destroying reissue does effect the value of compact discs; collectors are willing to pay higher prices for discs when they know that the disc (or perhaps just a certain track on the disc that is not otherwise available) will not be reissued, thereby bringing down the price of the disc. The above example of a disc withdrawn due to legal issues is a classic example of this; labels going out of business without selling the rights to their catalog can also lead to discs which may never be reissued.

Not all discs are in demand because the artist is well-known. Sometimes a relatively small cult audience of collectors can create a high demand for discs by artists that most folks have never heard of. Another collecting phenomenon are "label completists" who are people seeking to own a copy of every disc ever released by a specific record label. Quite often it is the least well known and worst-selling artist on a label that has released the hardest-to-find discs. In an example from record collecting, one of the most valuable 78s is by The Prisonaires, a vocal group of Tennessee State Prison inmates. Very few copies of this flop record exist, but because it is the rarest 78 on the Sun label and because there are many collectors looking to put together a complete set of Sun records, it has become more valuable than the other Sun 78s, including Elvis Presley releases.

 

Discs Withdrawn by Legal Action

There have been several situations where lawsuits or other legal actions have resulted in a CD being withdrawn from sale. Reasons for these lawsuits have included unauthorized use of samples, releasing a parody of a song without permission of the original songwriter, deceptive packaging (making one's disc look like the work of a different artist), or even releasing an unflattering song about a person to which that person took offense. Generally these lawsuits are filed with preliminary injunctions to halt the sales of these discs immediately, and are often settled out-of-court with an agreement that the disc will never again be sold in its original form. Sometimes a "replacement" CD is then released, without the offending music and/or artwork, but the guaranteed continued limited supply and a high demand fed by publicity about the case remain, and the original "illegal" discs often become high-priced sought-after collector's items.

 

True Bootlegs

These are discs that are released in violation of copyright laws by folks unauthorized to sell the recordings. They are most often of live recordings, although other rarities may be included. Bootlegs are usually released in small limited editions; it is too risky legally to manufacture and distribute large batches. It is always possible for someone with a bootleg to make their own copies, so it is common for the same material to be released several times under different titles.

 

Protection Gap Releases

Some countries have (or had in the past) copyright laws that are more lax than those of the United States, allowing for the unauthorized release of recordings. Italy in the early 90's had one of the less stringent copyright laws, allowing for the manufacture and release their of many "copyright protection gap" recordings. Many of these were exported to the United States (against the best efforts of the RIAA) and were fairly well available at premium prices. Italy's laws eventually came into line with the rest of the Western world; the largest of the "protection gap" record companies, Kiss the Stone, has moved to Singapore and continues to operate there.

 

Three Inch Discs

Three inch compact discs never quite caught on here in the United States or in Europe. Most of the releases of the 3" discs happened in the 1980s and were quite limited in number. They continue to be released in Japan and in special editions by independent labels, so not all of the little discs are collector's items, but the vintage 1980s releases have become quite scarce and popular with collectors.

 

1980s Contemporary Christian

During the late 1980s, the Christian music market in the US was dominated by cassette tapes, more so than the general market. Many albums released during the late 1980s had very limited amounts of CDs manufactured and then fell out of print. As fan's cassette tapes started to cease working, this led to an increased demand for CDs of the music. Some of these albums have been reissued to meet this demand, but others have not (sometimes due to the fact that the record label no longer is in business) leading to very high prices for certain titles.

 

Discs Replaced by New Versions

Sometimes discs are revised and released in new versions with changes made to content or packaging. If the new version is not seen as an improvement, this leads to demand for the now out-of-print original version.

 

Limited Editions (Numbered)

Numbered editions fall into two general categories. Sometimes after the numbered edition is all sold, more are manufactured without the numbers. While the numbered version may be worth slightly more than the unnumbered, they are generally not sought after. The valuable ones are those that were both numbered and limited in number.

As with other numbered collectables, low numbers may go for a premium price. Numbering may be done by a mechanical stamp or by hand.

 

Limited Editions (Packaging)

Sometimes discs are released in a limited edition with a deluxe package and are sold for a premium above the price of the regular edition. Another variation is discs that are sold initially with a fancier package, which is eventually replaced by a cheaper, simpler-to-make version of the package. In both cases, the music is the same, but the fancier and limited package will still change hands for a premium price.

 

Limited Editions (Bonus Music)

A limited edition with extra music not found in the common edition will become sought-after by collectors. There may be limited editions where bonus tracks are included on the disc, but the usual method is to include a bonus disc with the extra songs.

 

Limited Editions (Other)

These are discs released in limited editions by the record label on purpose, but do not bear a number or other device to distinguish them. These may be a set size release (i.e. an edition of 10,000) or a release for a limited number of days (i.e. released for one week and all orders filled, and then withdrawn). Also, some early CD singles were only released in limited numbers (due to lack of demand for the new format) and are now quite hard to find.

 

Promotional Use Only Releases

Some discs are not manufactured for retail sale, they are for use only by record stores, radio stations and others who receive them for free. Some of these promo discs are the same as a commercial release with a modified package and are not that sought after. Discs which are only available as promotional items, particularly those that contain music that has never been commercially released, quite often do become collector's items.

Disclaimer

This essay is based upon my experience as a collector of compact discs living in the United States. I am not an appraiser of CDs, and my writings on the values of CDs are strictly my personal observations and opinions. Not all of the examples presented here are all that valuable; some are presented to show that they could possibly be worth quite a bit, but they fall short for some reason. I intend to keep all of the discs in my collection, none of them are for sale. Your mileage may vary.

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Last updated 3 October 2000.