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Universal cuts cd prices

Today’s WSJ featured a front-page article in the Marketplace section that described how Universal is taking a bold step to cut cd prices. Instead of the usual 14$-18$, they’ll be 9$-12$. The industry is understandably pissed. Universal has a 30% market share of the US’s recorded music industry. With such a huge chunk of the pie, they could effect change throughout the system, forcing the other behemoth record companies to follow like lemmings. (Remember lemmings?)

Funny thing is, how can the RIAA complain? Universal is making it easier to buy cds instead of downloading them for free. I say bravo to Universal. I still might not buy their artists’ music, but at least they’re taking steps in the right direction.

The question is how this price cut will affect independent record stores. Prices may be falling, but record stores won’t see an increase in margins because they will adjust prices accordingly. They might, however, see an increase in volume, but this assumes they move a lot of Universal music. Given the average independent record store mostly carries music released by independent record labels, I don’t see how the price cut will help them. It looks like the chains will see most of the benefit.

Regardless, it will stimulate the music industry and aggravate the RIAA (doesn’t everything?) so I think it’s a good move.

Comments (3)

p-man:

URL:
yup. i convert special chars ;o). if you want a new line, hit enter. it's either let people hit enter for a new line (which was an explicit request) or let them use html. I agree that indie records are less price-sensitive than mainstream, but there's something to be said for cheaper records. if it's too expensive, broke ass college students and teenie boppers will go to ebay and buy used. if the price comes down, they might be motivated to buy new. at least from personal experience, i (nor my friends) was not always willing to shell out mucho dinero for the flavor-of-the-month indie garage band.

joey jo-jo:

wow - you convert special characters. so long html. so long.

joey jo-jo:

URL:

Regardless, it will stimulate the music industry and aggravate the RIAA (doesn’t everything?) so I think it’s a good move.
Indie shops won't see a difference either way. Indie records are less price sensitive and more label-shy. Once a band has a major-label release it's indie street value plummets - up to that point fans will pay virtually any price for the latest vinyl release by the skippy-skippies or another flavor-of-the-second Labels have shot themselves in the foot by adopting unnecessarily risk-averse business practices. You might call it laziness, but you can find parallels in other industries. If an eleven year-old in a mall in fresno curls her lip the wrong way, otherwise good products are run through the de-flavorizer or dropped altogether. Look at the movies this past summer - there have been some of the most-anticipated movies released and yet almost none have had more than two weeks in the top five grossing lists. The Matrix reloaded sequel earned far less than expected, the Hulk was stillborn, and that's not to mention the biggest star-facial of them all - Gigli. The studio buys concepts that the public already recognizes (think, 'it tested off the charts!'), removes any element that deviates from the focus-group cards (think, 'i would have liked it if it had been faster, shorter, funnier and stupider.') spends more to mass-market the movie than they spent to make it and then act suprised when large segments of the audience fail to recommend it to friends. The studio made an tired, unoriginal movie; marketed it beyond the audience that would respond to it and end up alienating a huge segment of the population - and they're surprised when it doesn't even recoup the ad budget????? It's the same stuff with pop music - watch for a crop of Timberlake clones, watch for the clones to play half-time shows in NFL games and watch the record do nothing more than cannibalize sales from Timberlake. The industry is eating itself and in the process it's getting a lot smaller.

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