Universal pricing CDs below $10 to prop up dying format
updated 10:50 am EDT, Thu March 18, 2010
UMG wants to undercut iTunes with CD pricing
Universal Music Group on Thursday said it would cut the prices on most CDs to $10 or less. Known as the Velocity program, it would see album prices range between $6 and $10. The label would count on sales volume, as well as costlier deluxe versions, to make up for the lower 25 percent profit margin.
The company characterized it for Billboard as a way of reversing years of declining CD sales by competing more closely with digital, where $10 has been the most common price for several years.
"We think it will really bring new life into the physical format," the company's distribution CEO Jim Urie said.
Controversially, however, it doesn't expect to do the same for online sales and could lead to a situation where albums at Amazon, iTunes and other major Internet music stores are actually more expensive than their physical counterparts. Some albums have sold in digital form $8 in recent months but could see little to no cost advantage over Velocity, which doesn't have a set starting date.
Critics have warned that price cuts have typically been ineffective. Universal was one of the first to get closer to the $10 mark for CDs but has had little success in reversing the overall tide of music. Agencies representing music labels have often blamed it on piracy, but the music itself and a shift towards buying single tracks over whole albums has also been considered a factor by outsiders.
a step in the right direction
03/18, 12:26pm reply
10 years too late... of course.
climacs
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Joined: Sep 2001
awful nice of them...
03/18, 01:28pm reply
but too bad that they won't be able to afford the solid gold bullets for shooting themselves in the foot anymore.
darkelf
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Joined: Nov 2003
one edition, one price
03/18, 01:59pm reply
In the UK most older albums are already the same or cheaper than downloads - CDs cost £5 to £7 and the iTunes price is £8.
The releasing of "deluxe" versions will be counter-productive. This will hurt and disadvantage the few of us remaining who prefer buying hard-copies. It does not work for new releases - if I see a new release that also has a version with a bonus DVD I will not spend the extra money on the deluxe version - instead I buy neither for ages and wait until the deluxe version is remaindered.
And the last batch (or it could have been a couple of batches ago) of redesigned Universal jazz budget albums were given a hideous makeover - no-one would want to buy them. Just stick the whole original album cover on the front of the case and stop with all these stupid shrunken insets and garish borders. If they put out a grotty cheap version and increase the price of the decent version then they will not sell either.
miawj
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Joined: Mar 2005
Might Work
03/18, 02:02pm reply
If I see an album I've been wanting in a store that is cheaper than the high quality iTMS version, I'd go for it. Not only do you get the product for cheaper, but I can encode it at a higher quality than iTMS allows. However, it's only at the lower price that I'd go for it.
Anyone else thinking along those lines?
danviento
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Joined: Dec 2005
I remember
03/19, 12:48am reply
I remember when CD's first came out, the Standard price for cassette tapes was $10 and CDs were $15. This was because CDs were more costly to produce, so they justified a higher price. This rapidly changed and now CDs are made for fractions of a penny, yet, the higher cost has always remained. people have been lobbying for years for lower cost. Glad to hear a change has finally started!
byRyan
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Joined: Jun 2007