Now that’s innovative. Universal Music Group recently unveiled a plan to test CD sales at $10 or less per unit. It’s a price point that music fans have been demanding for years. Decades, actually. So have retailers, some of whom have done their own testing to find… Surprise! Lower CD prices promote higher-volume sales! Trans World Entertainment, owner of F.Y.E., recently tried the $10-per-CD concept at 100 stores to find unit sales jump by more than 100 percent.
The UMG plan, however, comes with an important caveat: the label aims for a 25 percent profit margin, meaning a $10 CD would wholesale for $7.50. That’s not likely to entice retailers, says Billboard.
Still, plenty of folks are excited by the prospect of lower physical CD prices. Considering digital albums have sold online for years for $10 or less – not to mention the fact that manufacturing a single CD costs just pennies (fewer pennies the more units are replicated) — it’s high time. There’s nothing quite like the feeling of walking out of a record store with a fistful of shiny, shrinkwrapped compact discs (much like it was in the 1980s, when I walked out of my neighborhood Kmart with an armful of shiny, shrinkwrapped vinyl records).
Unsurprisingly (at least to me), other major labels are hesitant to try the $10 pricing test. Their reasons are hard to discern, and a random poll suggests some label execs are even annoyed at the possibility. Not that they have any better ideas for stopping the continuing decline in record sales.
“The definition of idiocy is doing the same thing over and over and expecting a different result,” one industry observer told Billboard. ”Things are not going to get better for CD sales unless the price point is addressed. One thing that the Trans World test shows for sure, $10 will drive sales and traffic.”
If other labels agree with that assessment, then I might just darken the doors of a record store more often.
~
You can leave a response, or trackback from your own site. Follow the comments via RSS.