On 8 May 2002 at 12:57, [EMAIL PROTECTED] wrote: > Hiya Brenda, > > Glad to see your posts again! Question for you, since you're so > closely involved with the music biz: I read in the RS that the #1 > selling CD sold a lot of its units because the label was offering $2 > rebates to the dealers, and the dealers in turn dropped their pricing > to $8.99 or so, and in turn sold a lot of units. > > Do you see this as a trend? I've been encouraged to see some new > releases (Joe Henry, John Mayer and some others) at a $7.99 or so > price tag. I know the CD business is ailing and just wonder if the > prices for CD's are going to FINALLY start to lower a bit to generate > traffic & sales. Whaddya think? >
In the mid-90's major labels started doing "breaking artist" campaigns. New releases were generally priced in the $8 - $9.99 range. The campaigns were generally executed in specific markets and in indie stores and chains like Tower and Virgin. It was very specific to new artists because no one wanted to open the flood gate that was put up by MAP (minimum advertisted price - a policy that was intended to keep indie retailers from being put out of business by the big box sellers like Best Buy, Circuit City, etc. who were using music as a loss leader.) I think you are seeing the lower prices across the board because MAP doesn't exist anymore. And everyone is fighting for chart position, so the campaigns at retail are getting more competitive. By offering the $2 rebate, the label not only insured a lower, more attractive price, but also got retailers to take more copies, which influenced the positioning of the record in the store. (The retailer will put the CD's in a prime location so they can move the units.) I think the trend is that music is going to sell at a market rate driven by volume and there will be a wider range in prices. Hot pop, hip hop and country artists that ship a lot of units and new artists that gain momentum will be under $10, while evergreens and specialty titles like jazz and blues (which ship fewer units, therefore less marketplace availability) will be priced at $12-14 (although list prices may still be at $16, 17 or $18.98). <rant> It's funny that the myth of the CD business ailing is still carrying water. I know the RIAA released numbers that sales were down for last year, but reports for Warner (and I believe Sony) both had sales up nearly 5% for the first quarter of this year. Also there was a report released by Jupiter that file sharing actually helps CD sales. (Wilco's "Yankee Hotel Foxtrot" has been available on the net for a year and debuted on the chart at #13.) Funny too, that the year that Napster was shut down, the industry actually saw a drop in sales. Now that the Napster alternatives are thriving, sales are up again. I think the story that CD sales are suffering is a ploy to keep the industry's agenda front and center with ongoing proceedings in Washington and Sacramento. My prediction is that ultimately the profit for popular recorded music will be driven to zero and that the price will be "feels free." Although music will still be sold on CD's (particularly and profitably by the indie craftsmen, like Kate and others on this list who are their own cottage industry; God bless 'em!), popular music (that's sold in the millions) will be delivered as a part of a service (like cable) and won't be a per unit transaction. There are those who lament that if labels can't make money off of CD's then music won't get produced. It will, but the funders will be different. They will be the companies that make money in a related way - computer hardware/software manufacturers, electronics companies, disk drive and disk manufacturers. They'll take a similar view of CD's that Walmart and Best Buy does - loss leader to get people in stores or buy gear. More artists are also publicly acknowledging that they take the same view as well - CD's are there to help them sell tickets or earn publishing income. Elvis Costello and Pink (how's that for two ends of the spectrum!) have made similar comments in the last few weeks. Please understand, I don't think the value of music is decreasing; but the value of those shiny, supposedly indestructible disks certainly is. </rant> BTW - I know it's been mentioned once here, but if you listen to internet radio, please visit http://www.saveinternetradio.org/ and if you're in the U.S. and feel so moved, send a letter to your rep. Brenda n.p.: Melanie Doane - "I Can't Take My Eyes Off You" ------------------------------ Coincidence is God's way of remaining anonymous.
