UNIVERSAL TO DROP CD PRICES
Found this Billboard article interesting. Universal Music Group will be testing a lower price scheme for physical CDs to try to help sales and prolong the life of the physical format.
From the article:
"Beginning in the second quarter and continuing through most of the year, the company's Velocity program will test lower CD prices. Single CDs will have the suggested list prices of $10, $9, $8, $7 and $6."
Will it help? Will any of the other Bigs follow the same path?
Labels: Misc
posted by Eric Luecking @ 10:33 PM
1 Comments:
This is another deceptive pricing structure from Universal, which has never been anything short of a dictatorship when it comes to the music industry.
They tried this several years ago, saying that they were going to have $9.99 & 12.99 suggested priced CDs. This was another effort to stop the decline of CD sales. Here were the problems with that system.
The titles that were chosen were only at those price levels until they sold an undisclosed amount of copies, then they were raised to $13.99, $15.99 and eventually higher. Alright for the consumer who is actively looking for music but not for the masses purchasing music.
The REAL problem lay in the actual wholesale pricing that Universal gave for each of these titles. The prices only allowed the retailer to make 20% off of "suggested retail", while they made 80% of their previous wholesale price. So guess who looks like the bad guy? Yup, the indie retailers who can't support a record store with that kind of business model.
Until companies like Universal learn to function off of reasonable business models, then they are going to be perpetually doomed. Another reason to support indie artists and labels.
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