CD Prices to drop up to $6
 

Article can be found here: http://www.usatoday.com/money/media/...cdprices_x.htm

NEW YORK — In a move that could lower music CD prices across the board, Universal Music Group (UMG), the world's largest music company, will cut the suggested retail price for its top-line CDs to $12.98 from the current $16.98 to $18.98, effective Sept. 29.
The cut by the company, which has contracts with artists such as Eminem, 50 Cent, Mary J. Blige and Shania Twain, is an effort to revive sales, which have dropped 30% industrywide over the past three years. U.S. sales in 2002 dropped 8% to $12.6 billion, according to the Recording Industry Association of America (RIAA).

"We expect this will invigorate the music market in North America," said Doug Morris, UMG chairman and CEO. "This will allow retailers (to sell) for $10 or less if they so choose."

The wholesale price on most CDs will drop to $9.09 from $12.02, with some top artists, such as Eminem, at $10.10. UMG expects retailers, who set final prices, to start selling CDs for about $12 on Oct. 1 and hopes they will go as low as $10.

"We've tracked this carefully. There's no question: The consumer responds when we get to that sweet spot of $11 to $12 per CD," says Jim Urie, president of Universal Music & Video Distribution. Executives at the other four major music companies — Warner, EMI, BMG and Sony — declined to comment.

In addition to the price cuts, UMG will replace ad subsidies for retailers with more ads for its own products to lure music fans back into stores. The company also is cutting the suggested retail for cassettes to $8.98.

The price cuts are also the music industry's latest attempt to slow illegal file sharing by consumers. The RIAA has served more than 1,300 subpoenas to identify traders and expects to file lawsuits as early as this week. Record companies are losing $700 million a year to piracy, says Josh Bernoff, media and entertainment analyst at Forrester Research.

Forrester released a study Tuesday predicting an even bigger drop in CD sales as Internet music file-sharing keeps gaining ground on the flagging CD, CNN.com said.

"It's disgraceful that people are losing their jobs and stores are closing," Morris says. "As the leader in the industry, we feel we should pave the way with a plan that, if it's successful, will become permanent."

It remains to be seen whether the cuts will be enough to persuade young consumers to buy CDs. Discounters such as Wal-Mart already discount CDs to about $13.

Michael Goodman, an analyst with Yankee Group, warned that if retailers refuse to pass on their full savings to consumers, "They could exacerbate a bad situation."

And Bernoff warns that lowering prices will not solve the long-term problem of file sharing: "This price reduction may stem the tide of losses in the short term. But in the long run, the only solution is to provide music online for people who want music online. That's the future, not CDs."

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Excellent. It's about time....

Works for me.... although I rarely buy a CD anymore. Its just too easy to d/l new music.

If CDs cost that little, Jinya and I would be at Best Buy daily. We always browse the cheapy rack when we're there, and that would bring most CDs from that company into cheapy range.

GO OUT AND BUY CDs from UMG to prove that this policy works. :p

The plan sounds good, if this price drop applied to import CD's as well i'd have a box full of new CD's by Xmas.. Yes troit it is easy to download new music, but you do realize.. it's stealing right? It's just as easy to go to a store and listen at a listening station to a new cd first, then buy it... or even go to amazon or someplace online and listen to song samples then purchase it. File sharing is popular because it appeals to people's nature to get something for nothing with minimal effort. Still doesnt mean it's ok to take something for free, just because you can.

I'm sorry but that still doesn't beat free music.

Truthfully, if they dropped the price even more, they would sell a whole lot more. If and when they do, I'll definately be buying more disks.

hmmph... when the movie costs US$19.99 and the soundtrack costs almost the same and there's no picture... people figure something is up.

bah.... i still have to see my money from the CD class action suit

When are they gonna realize that people are too lazy to drive to best buy or Wall Mart, and that they want to have new music now! In their homes.

RIAA had their chance to jump on the MP3 bandwagon a long time ago.

If they just had a site that charges people 50 cents a song or something they would be rolling in cash. They could have embraced Napster and Kazaa but instead they decided to fight them which was a huge mistake.

Now they think that sueing people is the way to do it.

The music industry: The public will probably buy more CDs if we lower the price.

The buying public: DUHHHHHHHHH!!! Ya think?!?!?!?:lol:

Now if they would just give a fair amount to the artists who make the music, I'd be satisfied. I hope that they don't take much out of the miniscule amount that they give artists for each CD sale.

This is a great step in the right direction. I'll start buying CD's again.

My CD player in my car only plays CDs. I have converted all my music to MP3s for the boat and the house, but the original CDs end up in the car.

So, I still buy CDs. I like the way they come complete and in sequence and the little album covers show up in the media player after they are converted to MP3s.

Cheap CDs are good.

hell, if they were cheap. i would buy them too. the silver stamped cd's are way better than burnt ones, tho i would still burn a copy for the car, leaving the original at home.

that makes me happy

Still not cheap enough. They've got to drop below the $10 mark to have a psychological affect.

I am pleased. I only hope they are not cutting into the already ridiculously low royalties paid out to the artist.

Good! Its about time. I still purchase CD's and always will. But I don't like being punished with their prices.

They should have done this a long time ago...

Still think it could be cheaper though....

Ummm.... blank discs are still way cheaper

personally i would rather own the cd than download, the only reason i dont is because of price so with this new policy maybe i can start purchasing cds yet again. oh boy!!

Well, that's gonna kill the downloading buisness.

Where are the $6 CDs--I feel cheated?

yeah, i would buy more CDs if they were cheaper, obviously.

Thanks for the article.

I read the post on how many songs some people have downloaded......WOW!

So is this going to affect the cost of CD's in Canada? Lowest price I've seen in years is maybe 15.99-16.99 for the new releases.

If the CD isn't a new release or the band doesn't have widespread popularity, I can expect the cost of the CD to be anywhere from 19.99 up to 27.99!!!

I must disagree - some people that are anal-retentitive about audio quality tend to avoid the MP3 codec for the lossy formats (yes, that includes me) and prefer files encoded in Ogg-Vorbis -q5/6 or Musepack on the standard or insane setting.

I personally only use lossless codecs - normally Flac now, but still have many GBs of ape files - to encode music that will be archived here. And I always prefer having a clean copy of the master material rather than a frequently shitty encoding job done in a low bitrate (anything below 192 bitrate in my book, or damn near any CBR MP3 file) or done through an atrocity like Xing software.

An update for my fellow Canucks:

I dont know about other areas of the country but here in Wisconsin, behind the Cheddar Curtain I can buy just about any CD I want for under $14 with alot of the new realeases being available under$11 for the first week of release. i hope this price drop will get my everyday prices under $10,

I hope they just don't reduce the number of songs on the CDs now.

Why doesn't the record association sell cds in MP3 format? I mean now days most people have some form of MP3 player. Hell most DVD players will play MP3's. Plus your PC will always play MP3's. By selling discs with MP3's they could give the consumer more songs with each disc, maybe even combining similar artists on one disc. I don't think people would be so hesitant to drop $15 or $20 on a CD if it had 25-30 songs instead of 10-15.

Because MP3 quality is a step backwards.

Me, i wait til they are in the bargain bin.

I could see this happening.

that's awesome!!!!!





but i'm still not buying shit from the RIAA

I like to have albums. An album tends to be a "statement" or "era" of a band. Its nice to hear a certin sound all the way through the cd. Plus, I like having the jackets. In the end, I never download for those reasons, aswell as the fact that p2p networks give hackers a wicked easy backdoor into your computer. I cant tell you how many people I kno who have had their computer fucked up by a virus on Kazzaa

wonder y it took so long?! doesnt matter music cds should be 5$ and cd roms and other video games should be 15$.

I enjoy having the albums as well. $10 is still a bit much, but far better than what they were charging previously. I'll have to see what artists this company produces, and decide if any of them are worth buying.

sweet, in my opinion more people wouldnt mind buying cds if they werent so damn expensive. i know i would cuz it would save me time but then again you couldnt make mixed tapes either so i guess it might work and it might not but its worth a shot and getting 6 or 12 bucks is alot better than not gettin the 18 or 20 . at least they makin some money

Still not cheap enough for me!!! Free is cheap enough for me!!!

I'll definately buy now, $17+ for a CD that has about 4 good songs is just stupid in my opinion. $6 isn't that much of a setback. :P

I have to laugh. They're cutting the MSRP, so the retailer takes the hit while the label goes on like usual.

And at the same time, Morris is concerned about retail employees getting fired and stores closing. How the heck will this help? They'll get more sales--but make the same amount of money.

Guess who benefits, besides the consumer.

This boosts label profits without any additional work and doesn't do anything about the declining retail music industry. Brilliantly misrepresented by the label.

thats STILL too expensive for me. Whats the point in buying CS's when you got things like Kazaa and a burner? What a shitty little cover? FUCK ThAT!

I think I'll stick to my ways.