Sunday, March 21, 2010

Buy Your New Audio CDs for $6-$10

This is what we will all be able to do starting in April, when Universal Music Group (UMG) starts a major new price test for its CD sales. Almost all CDs will be priced at $6, $7, $8, $9, and $10, with deluxe collectors' albums being priced somewhat higher. UMG's expectation is that the price drop will stimulate sales to the degree that overall profits will increase: "we think [the new pricing program] will really bring new life into the physical format," UMG Distribution president/CEO Jim Urie says to Billboard.

Trans World Entertainment, a media distribution and retail company, has been testing the $9.99 price point for several months, in collaboration with most of the major studios, and has seen volume increases of over 100%. Its CEO's reaction to Universal's move: "We are happy to see that a major music vendor has made a decision to lower his price substantially, because it's what the customer wants today if we are going to see a viable CD business."

Ars Technica quotes Forrester analyst  Mark Mulligan as thinking that prices need to go as low as $5. Billboard quotes other sources in the industry as "annoyed" by Universal's move. Where do they have their head? This is one industry that needs to lower the average age of its executives... In the mean time, we at are planning some serious music buying sprees in April.

No comments:

Post a Comment