Universal Announces Plans to Lower Prices to $10 or less

Posted: March 18, 2010 in Artist Management, News Items Comments
Tags: , , , , , , , , , ,

I think the only problem with this idea it maybe too late to make a real difference.

It should have been done years ago and I remember talking to various Record Company Executives about the idea years as I was constantly hearing the complaint that CD’s were too expensive from people.

But the head in the sand attitude continued I’m afraid.

Oh well lets hope it helps but I doubt will revive the CD sales business overall I’m afraid.

I wonder if Downloads will become cheaper respectively that would be interesting as they could be priced around $3 after all there are no hard costs compared with making  an actual CD with packaging costs etc.

Of course one has to consider the costs of producing the recording which easily gets forgotton by the general consumer.

Universal Announces Plans to Lower Prices to $10 or less

Sales of physical albums have steadily decreased over the past half decade, and now one major label is hoping to stem the decline by adopting a daring new strategy: lowering the price of CDs. Universal Music Group has revealed a plan to reduce the wholesale cost of their albums in order to decrease the retail price of single-disc albums to $10 or less, Billboard.biz reports. Under the new plan, sales of CDs will only boast a 25 percent profit margin, but UMG hopes the increase of CD sales volume will help reinvigorate their revenues.

While some may deem UMG’s strategy as “too little, too late,” the move does put the price of physical discs in line with what digital music services like iTunes charge for full album downloads, making physical discs a more attractive option. “We think it will really bring new life into the physical format,” Universal Music Group Distribution president/CEO Jim Urie said. UMG revealed that they plan on selling more deluxe editions of albums, however those discs will carry a higher price tag.

While retailers are applauding the move, Billboard.biz writes that the other major labels aren’t too pleased with UMG’s price shift. “Why does Universal feel the need to get below $10?,” a distributor at a competing major wondered. However, there is precedent for UMG believing their new strategy will work: When Trans World Entertainment, who runs music stores like f.y.e. and Wherehouse Music, tested out a $9.99 price plan, CD sales jumped 100 percent.



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