Universal to reduce CD prices - U2 Feedback

Go Back   U2 Feedback > Lypton Village > Lemonade Stand > Lemonade Stand Archive
Click Here to Login
 
 
Thread Tools Search this Thread Display Modes
 
Old 09-04-2003, 01:59 PM   #1
ONE
love, blood, life
 
zonelistener's Avatar
 
Join Date: May 2001
Location: six convenient metro locations
Posts: 14,747
Local Time: 02:48 PM
Universal to reduce CD prices

If find this news ironic on the same day we get news that Ticketmaster wants to "auction" the best seats off.

Quote:
World's largest CD company promises cheaper discs
Alex Veiga, AP
Published September 4, 2003

LOS ANGELES -- Universal Music Group, whose roster of artists includes 50 Cent, U2, Elton John and Diana Krall, will cut the price of its wholesale CDs and push for a $12.98 retail cap on its discs in an attempt to woo music fans back into record stores.

The world's largest recording company hopes retailers, who have suffered as industrywide music sales dropped 31 percent the last three years, will follow its lead and pass on the savings to consumers.

Universal hopes the actual retail price of most of its CD will end up about $10 or less, comparable to the $9.99 retail price that music fans enjoyed in the early 1990s, at the height of a price war between the recording companies.

``Our new pricing model will enable U.S. retailers to offer music at a much more appealing price point in comparison to other entertainment products,'' said Jim Urie, president of Universal Music & Video Distribution. ``We are confident this pricing approach will drive music fans back into retail stores.''

If retailers also drop their prices, Universal's move would make CDs more competitive with online services, including Apple Computer Inc.'s popular iTunes Music Store and Buy.com's BuyMusic.com.

It was not immediately clear how retailers would respond to the move. Company officials said they had not discussed the pricing strategy with retailers, who would be notified formally today.

Kevin Milligan, vice president of merchandising at Torrance, Calif.-based record retailer Wherehouse Entertainment Inc., said he had not received notice from Universal, but that in general, the move is good news for consumers.

``Whether it will ultimately be good news for retail? I think it's still up in the air,'' he said.

Officials at the National Association of Recording Merchandisers did not return calls Wednesday. Officials at EMI, BMG and Warner Music Group declined to comment; Sony Music Group officials could not be reached.

Universal's current wholesale price for a CD album is $12.02, with a manufacturer suggested retail price of $18.98. Under the new pricing structure, the wholesale price would be $9.09.

The wholesale price for CDs by a handful of performers, including Eminem and Shania Twain, would be about a dollar more, said Jim Urie, president of Universal Music & Video Distribution.

The company also said it would cut wholesale prices on cassettes and change the suggested retail price to $8.98. Latin recordings and multiple disk packages or CD box sets would not be included in the pricing change.

The price changes would go into effect by Oct. 1.

The decision to cut prices underscores how badly the industry has been hurting, said Josh Bernoff, an analyst with Forrester Research, Inc. ``That's basically saying `we give up','' Bernoff said.

Revenue from album sales has declined from $14.6 billion in 1999 to $12.6 billion in 2002, according to the Recording Industry Association of America, a trade group that represents the largest recording companies.

The recording industry blames its sales slump largely on illegal music swapping over peer-to-peer networks and is expected to take legal action against hundreds of suspected file-swappers this month.

But industry critics say the record companies have, for more than a decade, ignored the effects of soaring CD prices on sales. They also contend the artistic quality of music has deteriorated.

``This is something that the industry has failed to address ... You could make downloading music go away tomorrow and the industry would still face challenges,'' said Sean Baenen, managing director of Odyssey, a consumer marketing research firm in San Francisco.

``All the data suggests that quality and price are major factors to the equation.''
__________________

__________________
zonelistener is offline  
Old 09-04-2003, 02:02 PM   #2
ONE
love, blood, life
 
MrBrau1's Avatar
 
Join Date: Aug 2000
Location: Verplexed in Vermont
Posts: 10,436
Local Time: 02:48 PM
Their must be a new "format" about to be introduced to the market that will make cds go the way of wax. They're just clearing house.
__________________

__________________
"If you needed my autograph, I'd give it to you." Bob Dylan
MrBrau1 is offline  
Old 09-04-2003, 02:18 PM   #3
Blue Meth Addict
 
u2popmofo's Avatar
 
Join Date: Aug 2000
Location: Texas
Posts: 36,961
Local Time: 01:48 PM
Finally, one of the record labels gets a clue.
__________________
u2popmofo is offline  
Old 09-04-2003, 03:11 PM   #4
Blue Crack Addict
 
deep's Avatar
 
Join Date: Apr 2002
Location: A far distance down.
Posts: 28,501
Local Time: 11:48 AM
They are about 10 years too late.




Their unholy alliance with clear channel has made them irrelevant.
__________________
deep is offline  
Old 09-04-2003, 03:19 PM   #5
Rock n' Roll Doggie
VIP PASS
 
cass's Avatar
 
Join Date: Aug 2000
Location: Australia.
Posts: 6,117
Local Time: 05:48 AM
...don't suppose it will effect me, but I just get happy when I see the words reduce prices in the same sentence
The "we shouldn't really be charging this much for CD's debate has been going on in Australia for years, I wish they would bloomin' hurry up and agree. We pay $30 for a new release.....which is why I don't get CD's until a year or two after they are released
__________________
cass is offline  
Old 09-04-2003, 03:21 PM   #6
Blue Crack Supplier
 
IWasBored's Avatar
 
Join Date: Nov 2002
Posts: 36,504
Local Time: 03:48 PM
what's on universal that i'd buy though?
__________________
IWasBored is offline  
Old 09-04-2003, 04:49 PM   #7
Blue Crack Supplier
 
Popmartijn's Avatar
 
Join Date: Jun 2001
Location: Netherlands
Posts: 32,543
Local Time: 08:48 PM
U2?

Just a suggestion...

__________________
Popmartijn is online now  
Old 09-04-2003, 05:20 PM   #8
Blue Crack Addict
 
anitram's Avatar
 
Join Date: Mar 2001
Location: NY
Posts: 16,289
Local Time: 02:48 PM
So we should thank them? Those prices are still expensive.
__________________
anitram is online now  
Old 09-04-2003, 05:22 PM   #9
Blue Meth Addict
 
u2popmofo's Avatar
 
Join Date: Aug 2000
Location: Texas
Posts: 36,961
Local Time: 01:48 PM
Quote:
Originally posted by anitram
So we should thank them? Those prices are still expensive.
They arent too bad actually. $12.99 will be the retail cap, so most likely some places will sell them for cheaper than that.
__________________
u2popmofo is offline  
Old 09-04-2003, 05:31 PM   #10
Blue Crack Supplier
 
IWasBored's Avatar
 
Join Date: Nov 2002
Posts: 36,504
Local Time: 03:48 PM
Quote:
Originally posted by Popmartijn
U2?

Just a suggestion...


oh right...i forgot about them. what songs do they sing again?


that reminds me. S.T.U.N. is on universal. possibly the worst band i've ever seen
__________________
IWasBored is offline  
Old 09-04-2003, 06:16 PM   #11
Rock n' Roll Doggie
FOB
 
Join Date: Oct 2001
Posts: 8,876
Local Time: 07:48 PM
This is the result of file sharing which is essentially stealing. Obviously people bitch and complain about paying 20 dollars for a CD when they can get it for free and at the same quality off the internet. But 20 dollars is not a lot for a CD.

The fact of the matter is that CDs are cheaper than they were 15 years ago. I bought my first CDs at about 15 dollars a pop back in 1988. Add inflation and the price of those CD's today is about 23 dollars. So CD's today are in fact cheaper than they were years ago. The same thing goes for Cassettes. A Cassette 15 years ago was about 10 dollars and today with inflation would cost 15 dollars, but most sale at about 12 or 13 dollars. Fact is that consumers actually have had it good.

The problem is that what most people want is music for free and the internet and file sharing has allowed that to happen. Thats the reason people have suddenly stopped buying large numbers of CDs. Its not the price, because 20 dollars for a CD and 13 dollars for a cassette is cheaper than what people payed 10 and 15 years ago when you adjust the figures for inflation.

Artist are the ones that will be hurt by this. Whether your U2 or an 18 year old in a new rock band, your profit per disk sold just got cut 35%. That might be ok if you have a good royalty rate and sell a million albums, but if you have a low royalty rate and only sell 25,000 albums, your going to be sleeping on someones sofa and using food stamps.
__________________
STING2 is offline  
Old 09-04-2003, 09:39 PM   #12
Blue Meth Addict
 
u2popmofo's Avatar
 
Join Date: Aug 2000
Location: Texas
Posts: 36,961
Local Time: 01:48 PM
Quote:
Originally posted by STING2
This is the result of file sharing which is essentially stealing. Obviously people bitch and complain about paying 20 dollars for a CD when they can get it for free and at the same quality off the internet. But 20 dollars is not a lot for a CD.

The fact of the matter is that CDs are cheaper than they were 15 years ago. I bought my first CDs at about 15 dollars a pop back in 1988. Add inflation and the price of those CD's today is about 23 dollars. So CD's today are in fact cheaper than they were years ago. The same thing goes for Cassettes. A Cassette 15 years ago was about 10 dollars and today with inflation would cost 15 dollars, but most sale at about 12 or 13 dollars. Fact is that consumers actually have had it good.

The problem is that what most people want is music for free and the internet and file sharing has allowed that to happen. Thats the reason people have suddenly stopped buying large numbers of CDs. Its not the price, because 20 dollars for a CD and 13 dollars for a cassette is cheaper than what people payed 10 and 15 years ago when you adjust the figures for inflation.

Artist are the ones that will be hurt by this. Whether your U2 or an 18 year old in a new rock band, your profit per disk sold just got cut 35%. That might be ok if you have a good royalty rate and sell a million albums, but if you have a low royalty rate and only sell 25,000 albums, your going to be sleeping on someones sofa and using food stamps.

Oddly enough, in my own personal experience I've found that all the people I've met who have the largest cd collections seem to download the most music too. Just my 2 cents.
__________________
u2popmofo is offline  
Old 09-05-2003, 12:49 AM   #13
Rock n' Roll Doggie
FOB
 
Join Date: Oct 2001
Posts: 8,876
Local Time: 07:48 PM
"Oddly enough, in my own personal experience I've found that all the people I've met who have the largest cd collections seem to download the most music too. Just my 2 cents."

If that were the case across the board, CD sales would be booming rather than declining. The decline in sales coincides with the start of widespread downloading and file sharing. All this with the price of CD and tapes being cheaper than they were years ago once you adjust for inflation.
__________________
STING2 is offline  
Old 09-05-2003, 02:00 AM   #14
Blue Meth Addict
 
u2popmofo's Avatar
 
Join Date: Aug 2000
Location: Texas
Posts: 36,961
Local Time: 01:48 PM
I dont get the point of them being cheaper than they used to be, that's fairly normal. DVD players used to cost $1000, now they're under $100. Inflation happened in that segment of the industry too. Any item in the technology industry will usually lower in price over time.

Cd's cost next to nothing to produce, and most artists get next to nothing for actual album sales.

There is easily just as much evidence that the decline in sales is related to high prices as there is to file sharing. Saying the internet is the one and only cause seems odd to me.
__________________
u2popmofo is offline  
Old 09-05-2003, 03:15 AM   #15
Blue Crack Supplier
 
Popmartijn's Avatar
 
Join Date: Jun 2001
Location: Netherlands
Posts: 32,543
Local Time: 08:48 PM
Quote:
Originally posted by STING2
"Oddly enough, in my own personal experience I've found that all the people I've met who have the largest cd collections seem to download the most music too. Just my 2 cents."

If that were the case across the board, CD sales would be booming rather than declining. The decline in sales coincides with the start of widespread downloading and file sharing. All this with the price of CD and tapes being cheaper than they were years ago once you adjust for inflation.
CD sales were booming when Napster was booming. At the height of its success the music industry had the highest sales. The decline in sales coincides with the harsh actions the music industry started against Napster, together with a rise in prices (and a drop in quality?).

C ya!

Marty
__________________

__________________
Popmartijn is online now  
 

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off



All times are GMT -5. The time now is 02:48 PM.


Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.
Design, images and all things inclusive copyright © Interference.com