The under-$10 CD is on its way

[The Penguin]

From MSN

The under-$10 CD is on its way

A major music label battles file-sharing, piracy and online services with a cut in the wholesale and list prices of big-name CDs.

By Reuters

Universal Music Group, the world's largest record company, said it will cut list prices on compact discs by as much as 30% in an effort to boost sales that have been stymied by free online music-sharing services such as Kazaa.

Starting in October, Universal, the home to such artists as Mary J. Blige, U2 and Elton John, will trim its prices on most of its CDs to $12.98 from its current $16.98-$18.98 range of prices.

Wholesale prices for CDs would decline to $9.09 from $12.02. For a handful of bigger name artists, wholesale prices would be $10.10 for a short period of time.

"We expect this will invigorate the music market in North America," said Doug Morris, the label's chief executive. "This will allow retailers to sell for $10 or less if they so choose."

Historically, large retailers have sold new CDs at considerably less than the so-called "manufacturer suggested retail price."

"Our research shows that the sweet spot is to sell our records below $12.98," said Universal Music President Zach Horowitz. "We're confident that when we implement this we will get a dramatic and sustained increase."

Fighting file-sharing, online rivals, piracy
The price cut comes as the company has endured the enormous popularity of free music sharing services, which the labels blame for music piracy.

Universal, which is owned by Vivendi Universal, sees the price cuts as part of a larger strategy to discourage people from downloading music from the free services.

The record industry has already begun suing individual users of these services for copyright infringement. The labels have also begun offering their music to online music services that charge for each song downloaded, one of the most popular of which is Apple Computer's iTunes.

"As people will begin to migrate from illegitimate services, they're going to be exploring a host of options -- some online and some through retail," Horowitz said. "We felt that the most important thing we can do to encourage people to go back into stores is to reduce our prices dramatically ."

Rivals are mum
Universal also said it would stop "cooperative" advertising, in which the label subsidized advertising by retailers in local markets and instead advertise directly to consumers. It will also withdraw other discounts to retailers.

"(Our buyers) haven't had a chance to talk with Universal at this point to get details on how it might affect the business," said a spokesman from Circuit City Stores. A spokeswoman from Best Buy declined to comment.

Amazon.com, Tower Records and Trans World Entertainment did not immediately return phone calls requesting comment.

The other major labels -- AOL Time Warner's Warner Music, Bertelsmann's BMG, EMI Group and Sony Music Group -- declined to comment.

Some music executives questioned how much impact the price cuts will have.

"This doesn't have as much impact as it looks," one record executive said. "The labels were offering some discount programs to the retailers that would now end. So it's not entirely clear how much of a change there is for retailers' margins."

I'm still thinking so...

Comments?

[Zoddman]

This is DEFINITELY good news. I was recently at Borders, and I was thinking about picking up Gorillaz first album, which came out two years ago, and the price is STILL $16! At least the music industry now realizes that instead of using threats against music sharing and its users, they need to become competitive.

[atf487]

Newbury comics sells cds for 12.88 new...This doesn't really affect me.

[Mynd Hed]

Well, this is definitely good news for most everybody else on the boards-- except for the file-sharers who are braving the RIAA's wrath, that is.

But, as for me? Employee discount + buying lots of used CDs = getting buttloads o' CDs for five, six bucks tops. So this doesn't affect me too too much. I only buy brand-new CDs when a band I REALLY like comes out with something new, and I can count on the fingers of one hand the number of bands I like that much.

[RZetlin]

It's too late and too little.

This price decrease should have been done when Napster showed up.

And only a four dollar decrease? Not enough.

This price decrease is only a desperate attempt by the record industry to save itself from doom.

[SonGoku V3]

This price decrease is only a desperate attempt by the record industry to save itself from doom.

DUH! Honestly, full albums should be less than 10 bucks. Also, bring back that little thing called the single! Sure, some people download full albums(those with fast connections), but others are busy downloading what they hear on the radio! It's hard finding rare stuff on Kazaa these days, but it's insanely easy finding top 40 stuff.

Anyway, this'll go into effect October 1st, and by that time, I'll either forget, won't care, or both.

[All-Star 1.5]

It's too late and too little.

This price decrease should have been done when Napster showed up.

And only a four dollar decrease? Not enough.

This price decrease is only a desperate attempt by the record industry to save itself from doom.

It's never too late because people will buy albums no matter what the cost unless it reaches past $30 anyway.

The 4 dollar decrease is enough when your working and can't really afford anything, besides the record labels need some form of income. I mean when you think of all the palces that money from Record Sales,To cuttin LPS and tours go then you would see why the prices were so high in the first place.

[RZetlin]

It's never too late because people will buy albums no matter what the cost unless it reaches past $30 anyway.

The 4 dollar decrease is enough when your working and can't really afford anything, besides the record labels need some form of income. I mean when you think of all the palces that money from Record Sales,To cuttin LPS and tours go then you would see why the prices were so high in the first place.

Maybe the fans will continue to buy the CDs, but not me.

I haven't bought a CD in a few years now because the music hasn't been that great.

I also don't like the hardline tactics the music industry is doing to their own fans.

Since you brought up the issue of money, which would you rather spend your hard earn cash on--2 $15 CDs or internet connection which allows you to download hundreads of selective music tracks.

[rodney]

Since you brought up the issue of money, which would you rather spend your hard earn cash on--2 $15 CDs or internet connection which allows you to download hundreads of selective music tracks.

If I had to think about the fact that I was essentially stealing money from the pocket of the bands that I claimed to like and admire, I'd rather spend the money, thanks.

[Dirtlosey]

If I had to think about the fact that I was essentially stealing money from the pocket of the bands that I claimed to like and admire, I'd rather spend the money, thanks.

Sad thing that the bands get a VERY SMALL percentage of what the actual profiits are. I wish there was a way I could give the artists my money directly. Bands could distribute their own music if they were willing to take the risk and could benefit greatly from it, I think Pearl Jam is going to do it with their next album...no record label, just them and their website, and their own means of retail distribution. I feel a lot better giving them my money for their music than having a record company pocket the money for the distribution and marketing of the product.

On another note, I think its sad that the music industry is one of the only markets where older products dont decrease in prize as they get older. You know its all going to hell when you have to pay over $20 for a crappy cd that is over 10 years old...

Please support the artists you like. Buy the music because you enjoy their albums. I still think the way the industry works is a rip off but buy your fav artists stuff!!!

[Hurricane V1]

If I had to think about the fact that I was essentially stealing money from the pocket of the bands that I claimed to like and admire, I'd rather spend the money, thanks.

Same thought here. Having a lot of music downloaded and burned for free is easy. Owning $5000 worth of CDs collected over twenty years, that's something to be proud of.

Plus my friend works in the music industry through advertisment. He gets like a couple cents for every album sold that he worked on. I'd hate to rip him off by downloading instead of buying an album.

[Dr Kain]

I'll believe it when I see it.

Anyway, it will be nice. I stopped buying a lot of cds because I couldn't afford it, but now I will be able to afford them again. yeah.

[supermonkey]

$10 bucks won't make a difference, they need to make the product more desirable. It's simple to get all the Mickey Mouse cartoons in great quality over the net. People don't waste their time b/c the Treasures kit is so cool. These bands today just don't get they are not artists, they are products.

People read books at the library and never buy from the authors they love, and yet authors don't get their panties in a bunch over it. If anything it helps them. That's b/c unlike bands today, they are real artists, have a message and want to spread it however they ca. For them the work itself is actually more important than the cash

Over-the-air these crappy greedy bands have raised the price (Internet radio) so I have very little sympathy for these bands (ie it's not just a concern over free perfect copies, it's pretty much greed overall).

These bands will have to deal with life the way it is just like the rest of us, and even the RIAA will make little difference with friends copying each other's CDs, or other closed network solutions.

Creating a useless legal net under themselves really looks rediculous to me, and illustrates their 'music' is really just a crappy marketing product nowadays.

[atf487]

Music today isn't bad, but the top 40 is...Lets note that difference.

The indie scene is thriving with great bands, but people are too lazy to find anything good. Just reading pitchfork occasionally can open your eyes.

[Hurricane V1]

Music today isn't bad, but the top 40 is...Lets note that difference.

The indie scene is thriving with great bands, but people are too lazy to find anything good. Just reading pitchfork occasionally can open your eyes.

True dat. Gimme Eyedea and Juice over Eminem and P. Diddy anyday.

Although I think Evanesence and White Stripes, while popular, are pretty damn good themselves.

[Jin Kazama]

From the articles I've read on this, as well as reports and CNN and the likes (but, as each is different in explanation, I may be wrong), from what I gathered this is only the possibility of being good.

The price cut is on what they charge retailers to get them, as well as the suggested retail price. The actual price cut depends on the retailers. They could keep prices the same and profit the extra 2 or 3 dollars for themselves. Sure, the backlash would be huge, but the option is still there, and I'm sure some places will probably do so still.

[The Penguin]

The price cut is on what they charge retailers to get them, as well as the suggested retail price. The actual price cut depends on the retailers. They could keep prices the same and profit the extra 2 or 3 dollars for themselves. Sure, the backlash would be huge, but the option is still there, and I'm sure some places will probably do so still.

This will no doubt also garner some sort of a marketing campaign. Stores that keep things between $16 and $18 would lose out big time as you mentioned. Since they will not lose money on the price drop I see little logic for keeping things at the same price. This is designed to increase sales—sales won't go up if prices aren't lower.

[ZorBrak]

If I had to think about the fact that I was essentially stealing money from the pocket of the bands that I claimed to like and admire

Don't the RIAA and labels already do that? Indie shall rise, dinosaurs shall die. WHOO.

[Mynd Hed]

The price cut is on what they charge retailers to get them, as well as the suggested retail price. The actual price cut depends on the retailers. They could keep prices the same and profit the extra 2 or 3 dollars for themselves. Sure, the backlash would be huge, but the option is still there, and I'm sure some places will probably do so still.

Very true, but the thing is, if just one store in a given market slashes prices significantly, the other stores in that same market will be forced to follow suit or else they'll take a hit in sales. Case in point: here in Flagstaff, besides places like Target, Wal-Mart, and the like, there are two big dedicated music stores: Hastings and Wherehouse. Wherehouse charges list price (or very close to it) for just about everything that isn't enjoying some kind of special sale or promotion. By contrast, Hastings' prices tend to be at least three or four bucks under list price in most cases. Despite the current sagging economy, Hastings is doing good business, and is going to be getting a storewide remodel very soon. Wherehouse, on the other hand, has recently slashed their prices by 50-75%... but only because they're having a "going out of business" sale.

There are some other factors to take into account, of course-- Hastings has a better location closer to the university and the employees are generally friendlier and more helpful than the Wherehouse employees, who are surly and uncooperative. But the point remains.

(Okay, that's enough of my shameless Hastings plug-- guess which store *I* work at? (-: )

[David Lucas]

My roommate once said, "At $18 a CD, I refuse to pay for music when I can download it for free."

And while I feel for the artists, who I personally love, I'm a college student who's car just broke the week I went out looking for a job for the semester. Cell phone bills, Tuition, Books, Rent, etc have drained my pocket completely to the point where there is no way I can afford to buy a CD.

I am aware of the RIAA's current plans to sue individuals, but I can name people in my apartment complex (We get free ethernet hooked up to 3 T1's) that download entire record labels worth of music so as soon as I hear if anyone gets sued, Ares and Kazaa will be off my computer miiigty fast.

However, now that they're lowering CD prices so that it's actually accessible to poor people, or college students, there's not much of a difference, I'll definitely save up $10 to buy a CD as soon as the price drop occurs.

So maybe the music industry is finally getting wiser.