From the NY Times
March 18, 2010
Universal’s Strategy Tests Lower Price on New CDs
By JOSEPH PLAMBECK
The Universal Music Group, the world’s largest music company, announced plans on Thursday to test broadly whether lower prices — $10 or less — on new CDs will attract consumers who have cut back on buying CDs in recent years.

The trial, which is to start in the next few months and extend through most of 2010, will include a sample of the label’s new releases and involve most of the country’s major retailers, including Best Buy and Wal-Mart, the company said.

Deluxe versions of albums, which have extra songs or features, will continue to sell at a higher price.

Jim Urie, the head of distribution at Universal, said CD sales had doubled at stores involved in a much more limited test of the pricing strategy. For the last nine months, Universal has worked with Trans World Entertainment, which set the lower prices at as many as 100 of its F.Y.E. stores.

Some of the details of the plan were first reported on Thursday by Billboard.

“It seems pretty obvious to us that a dedicated fan will gladly pay for extra content, for deluxe versions,” Mr. Urie said. “But the casual fan isn’t willing to pay $15 dollars for a regular CD.”

John H. Marmaduke, the chief executive of Hastings Entertainment, which sells music, books and movies in 153 retail outlets and is participating in the expanded test, said he expected the new price to increase sales volume by 30 percent or more.

“I think that 10 dollars and below is the magic price,” Mr. Marmaduke said. “Lower prices are something that consumers and retailers have been asking for years.”

Still, not everyone in the industry welcomed the news of lower prices, doubting that $10 CDs would drive enough sales to offset the smaller profit margins on each unit sold.

“The price needs to be either dramatically lower than $10 or you have to go north of that to maintain the margin and live with lower volume,” said one executive at a rival record label, who requested anonymity because he was not authorized to talk openly about pricing strategy.

CD sales have dropped by more than half since 2000, according to Nielsen SoundScan. And while many record executives say they believe that CDs and downloads appeal to different consumers, placing new CDs at $10 or less would bring the price closer to the going rate for many albums available on the iTunes Store or for download on Amazon.

The country’s top-selling album in the last week, Ludacris’s “Battle of the Sexes,” can be downloaded on Amazon’s MP3 site for $7.99, and a deluxe version for $9.99. The CD version of the album is sold on Amazon for $11.99.
[Edited 3/20/10 15:30pm]

When are they going to realize that CD's/Pop music today has NO value.

When was the last classic album, i.e. "Pink Floyd - "Dark Side Of The Moon," Marvin Gaye - "What's Going On," Nirvana - "Nevermind," just name a few. You can't tell me Susan Boyle is a classic album, just because it sold a million copies!

Unfortunately the older catalog is getting lost is the mix. They're are younger folks working at these majors who never heard of the MEGA artists from the 80's, 70's, 60's.....nor do they care. They will never treat the artists that made the music industry with the respect they deserve, unless they are told to do so.

What was once a creative art form, is now a mere novelty. Pop CD's now are just souvenirs, like a Ringling Bros. circus program. The true musicians and business savvy musicians know this, and that's why they are walking away from the majors. The majors go after young folks that are just interested in the fame, star status and trying to live the life of the rich and famous. The give them bum deals and "hope" the music flies. All you need is a mic, auto-tune and a PC or Mac.
Slap on a costume and some make up, create a scandal and boom...you're a star! That's pretty much the most creative thing about these young artist.

If they go as low as $5.99, will it really make a difference? It's all about the content and the quality of the product. I understand the need for profit, but please, this is not the break we need.

The CD saved the industry from the crash of 1979 - 1981. The industry hit an all time low at during that period. The CD came along and literally saved the industry from going way under. Thank goodness for an enormous back catalog of titles for consumers to replace their worn out LP' and Tapes. Now the CD is killing it faster than it came in. In the late 80', if you just asked for a record deal, they would hand you one without hearing a note because CD's were selling like crazy.

Music today just burns out way too quickly.

Micheal Jackson shot a bullet is his career when he dubbed himself the King of Pop. Who would want to be King looking at the Pop charts today.

tricky2 said:

I've got to think about that.

they're about ten years too late

SoulAlive said:

Like I said, fifteen.

Timmy84 said:

oops, sorry for the dupe thread, i didn't see the first one. Please delete.