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Universal Music To Cut CD Prices
phlack writes "CNN Money has an article about Universal Music Group's plans to slash their CD prices to $12.98 SRP, in an effort to combat piracy and bring consumers back into stores. It makes me hope the other giants will follow suit, and wonder if the music industry is finally listening to some of the consumer's complaints."
It's about time - CDs have been overpriced for years.
But when a large segment of the public is going to be comparing $12.98 with the $0.00 filesharing price, I have to wonder if it will have any effect at all.
I wonder what the artists think of this? This price reduction has to impact their bottom line...
It's Slashdot's evil twin... SlashNOT
So they are finally going to match their competitors (Best Buy, etc.) in CD prices? I still don't understand how those big chain stores, who charge $17.95 for a CD, stay in business. Maybe they should take a survey from their consumers, about what they're actually willing to pay for a CD. $12 is about the tops for me, and it better be darn good for that much money.
Slash?.. I will wait till they have a homicide of the prices.. 2-3 bucks is just a joke.
How generous. Rather than making 90,000% profit on $0.02 worth of plastic, they're
taking it in the shorts with a measly 65,000% profit.
Give me a break. Like $12.98 is going to make me get excited about driving my car to a Brick and Mortar to purchase $0.02 of plastic. This is like Microsoft's strategy of settling lawsuits by selling software at a discount to schools.
Does it hurt to hear them lying? Was this the only world you had?
If you ask me, I think the right price for a CD is about $5. $12.98 is a bit much (and why 98? do they think consumers have gotten wise to the whole $n+.99 thing?) It'll eventualy happen.
autopr0n is like, down and stuff.
Most slashbots are probably familiar with price wars in computer hardware....perhaps we'll see some with regard to CD prices.
Would be an interesting situation where one could get an artist's release from two different labels, so there would be real competition between them.
If you can't see the value in jet powered ants you should turn in your nerd card. - Dunbal (464142)
You have already proven you wish to screw your customers at any given moment. You have been hostile to me, you know the guy that paid for your wares, for far too long.
I left and am not coming back.
Explain why Cassette is still going to be cheaper. No, really. I want to hear it.
Could it possibly be that CDs are way, way overpriced, even at $13?
Belief is the currency of delusion.
Dude, there are a zillion bands that sound good, with CDs and everything. The problem is not getting new bands, the problem is getting their stuff on the airwaves for people to experience. Check out your local independent radio stations. There's a _fantastic_ morning show here in Seattle on KEXP (kexp.org - check out the online stream & playlist). The show is "John in the Morning". Flat out fantastic stuff that you won't hear anywhere else on the airwaves in Seattle. Listen and then buy their CDs from their own websites, whatever you have to do to support them, if you want good music.
(Manufacturer's) Suggested Retail Price. It reflects the price point that the manufacturer suggests the retailer offer to the end consumer, and includes the margin for that retailer.
The MSRP values are based on various fudges and calculations, with a good bit of over-the-thumb thrown in for good measure. In this age of Internet comparison shopping, I can't remember the last time I paid MSRP for any consumer goods (except software like PS2 games, where Sony has a very tight rein on the supply chain).
Come play at the only online poker room with a Mac-native client
We are fighting back. People are boycotting, people are buying used CDs, people are setting up sites like
http://www.downhillbattle.org/
And http://www.boycott-riaa.com/
The fight is just beginning! Its not even close to being over. This should prove that fighting back works more than begging politicians with emails and letters.
If you use Linux, please help development of Autopac
pb Reply or e-mail; don't vaguely moderate.
I've never been to a concert in my life and don't understand why I should care to
Let me help you. You may want to see a concert if you think you'd enjoy:
- the feeling of 'never stepping in the same stream twice' -- go see artist X every year for 5 years, and each performance of any given song will 1) be different than the CD version, 2) be different than the previous year, 3) be different than the previous night!
- hearing unscripted improvisation between artists -- many musicians claim that the set they're most proud of playing was NOT the one recorded in the studio for the CD
- the little live mistakes and recoveries of talented artists -- you'll rarely get that on a CD
- experiencing the energy of dozens or hundreds or thousands of like-minded people simultaneously grooving or interpreting or dancing or just chilling to the same music you love
- to experience the artist -- 16 bit stereo samples @ 44.1kHz captures audio quite well -- but it doesn't capture dance, facial expressions, stage antics, synchronized light/lasers/visual effects, costumes, etc.
Recorded music is here to stay, obviously, but live performance is different. It's not necessarily better. If you like any given artist though, it's enriching. More times than not, if I've appreciated an artist before going to see them live, the live experience made me respect them even more.
Some (not all) artists are multidimensional. CD is great for the car or bus or office, but CD doesn't do many artists the justice that live performance can. And of course, some artists suck live. Explore.
When I worked for a car dealership (doing computer stuff, not sales) Subaru decided that the prices on accessories were too high. To correct this they lowered the list price.
Not the cost mind you, but MSRP.
Now the dealers were force to take a paycut while Subaru kept the same profit margin.
I would not be suprised to find out that the cut in list price on the cds was much greater than the cost the stores pay.
I don't really mind double posts on
I'm talking about the majority here .. there will always be people who steal, but ....
In post-capitalist 17th century UK, people couldn't afford bread. Rather than storm the bakeries and steal the bread, they stormed the bakeries and demanded a fair price.
People are happy to pay a fair price. Thats the very definition of fair value. A value people will pay.
Between overpriced and free, people choose free. But when they sense that a fair price can be obtained, ie, when the bakers (ie, the RIAA) are actually willing to come to the table and discuss the price, people will choose fair price over free because we require our socialeconomic systems to exist in order to benifit from them.
If we can't benifit at all, we might as well get for free. When we can benifit, we're smart enough to support that system rather than torpedo it.
Its the survivalist instinct that makes us choose between not and all and illegally free, and the same instinct that makes us choose fair price over damaging suppliers by aquiring their goods in a way that will put them out of business.
"Old man yells at systemd"
The company, whose artists range from U2 to Reba McIntyre, will also cut wholesale prices on cassettes so its MSRP for top-line releases will be $8.98
Wow! You mean, you can BUY tape archives of CDs in the stores? Here I've been ripping my cds and backing them up to tape like a jerk.
This should save me LOADS of time.
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Here's the reason.
Hypothetical: you purchase a popular mainstream CD at a store such as Best Buy.
You would pay about $12.99-$14.99 for this CD.
This CD almost certainly retails for either $17.98, $17.99, $18.98, $18.99, or $19.99.
Incidentally, Best Buy tends to make less that $0.75 per popular CD sold, and frequently less than $0.50 on the ones in their ad. They sell only items they believe they can make huge volume on, with the hopes of drawing you into their store so that they will buy their other products which have sane profit margins.
MSRP of $12.98 means a Best Buy price around $8.99 -$10.49
Additionally: cost is not $0.02/CD.
Cost works something like this:
Production: $0.03
Royalties to Musicians: $0.05
Royalties to Songwriter: $0.08
Retained by retail store (covers costs like distribution, plus profits) $3.00 - $4.00
And this does not include the cost of producing the very first CD, generally on the order of $10,000 - $100,000 (varies greatly depending on artist and what all is going on) Amortizing this across all copies sold (lets assume 500,000 -- a pretty good amount for one disc) means that cost is between $0.02 and $0.20
Note that the numbers for royalty per album sold were real numbers I got from folks inside the music industry, but that they are about a decade old. IIRC, they have increased slightly lately, so it might be $0.10 / $0.16 instead of $0.05 / $0.08.
Anyhow, the total minimum cost per disc is on the order of
$3.36 / disc.
I have left out many of the costs involved in the production, distribution, and marketing of music because I don't have any decent numbers, so I'd just be guessing.
Even if the other costs are forgotten, $3.36 / disc cost vs. $12.98 MSRP means a profit of:
286%
instead of:
435% for a $17.98 CD
In short, yes the music industry can afford this cut, and it was a good idea, but IT IS SIGNIFICANT
Like I said, expect to spend on the order of $8.99 - $10.49 per new CD you buy at the discount stores (from Universal anyway)
Expect others to follow suit.
In my opinion the "Best Price for an Album" -- as in, the price the CDs should retail for to maximize record label profits is $9.99.
This is because this allows price ranges in discount stores to be on the order of $7.00 - $7.99 and I think that this is the highest price that most people will be willing to spend and still buy every CD from most of the artists they like.
That's just my opinion though. I want to know, really, what do you all think the "Best Price for an Album is" remember, the idea for this number is to maximize RECORD LABEL profit (NOT sell the most music or decrease piracy the most, just make the label the most money)
It is ironic that the top echelon of recording artists could not exist without an industry to support them. Strip away the managers and agents, stylists and coaches, from someone like Justin Timberlake and ask is it possible that he could still make a living from music? Probably not. Ani di Franco, on the other hand, has been making a comfortable income for years without the support of the business she's supposed to be in.
As Douglas Adams pointed out, many companies aren't in the business you think they're in. Fox News is, despite a million conspiracy theories to the contrary, simply in the business of delivering an audience to its advertisers. The ethics and actions of the "Big 5" corporations who control 90% of record sales make rather more sense if they are viewed, not as separate companies, but as one distributed bank.
As anyone with any experience of dealing with banks will know, they are monolithically slow to react to changes in the environment, and are populated with highly intelligent, but narrow-minded, solipsists. They're doing now what every one of us was warning them that they should be doing the instant MP3 was rolled out.
By way of related tangent, here is an article by Steve Albini about his experiences with one of the majors, and his advice to anyone thinking of getting involved. At the bottom of the page is a detailed breakdown of a typical deal in which the "industry" made $973,000 and each of the four band members made $4,031.25.
When the entire system is that fucked, the price of a CD is moot.
too many musicians think that they are artists. The reality is that the vast majority of popular music is performed by those that would be more aptly called artisans than artists. Picasso was an artist, the guy down the street painting lettering and cartoons on a billboard is an artisan.
Sure, most pop stuff is like this; but you've not looked -nearly- hard enough if you believe that. And, with a name containing "punk", you'd think you'd know about some of those indie bands (Or indie-bands-gone-mainstream) that are damn good. AFI, Stutterfly, System of a Down, or Millencolin anyone? How about Dashboard Confessional? Or how about The Offspring? Bright Eyes? Thursday? Glassjaw?
Not paying for -good- musician's music is a crime, both morally and legally. No matter how little of the money goes to that musician, they've worked hard for it. And they deserve to be paid it if you listen to it.
If it's cheap and mass produced, don't listen to it. If it's good, and you like it, then pay for it, enjoy it, and support the artists.
Complaining that it's cheap mass-produced advertising, and then listening to it is pure hypocritical bullshit. Why, may I ask, are you listening to it if it's so bad?
Screw Universal and the rest of the RIAA members: unless they're indie buy used CDs and send the artist $2, go to a concert. Musicians don't make dick from CD sales - all production, promotion, legal, administrative, and other costs are charged against the artist. Once *all* of that is cleared, then they get paid a sliver of what's left over after their producer, manager, and entertainment lawyer snack. As an added injury, only in the music industry do artists not retain copyright to their works. Many musicians are now discovering piece-for-hire, you don't retain the copyright to your works. Concerts: this is where artists make their money, their bread and butter - it's certainly not from CD sales. They go on tour, license t-shirts, ball caps, posters, whatever. Make a chunk of concessions, etc. And now the music industry wants a piece of concerts too. Screw 'em. Screw them in both ears - buy indie. If there's non-indie tunes you dig on, visit your local CD Warehouse or hit eBay and buy albums used - then send the artist a couple of bucks.
Universal Music cuts CD Prices
What's most interesting here is not the price of CD's, (which at $14.95CAD is about $11 US), but that they plan to offer Canadian downloads in October for 99 cents (Canadian) a song!
It's too early to say whether any of the other labels will participate, and what kind of restrictions are going to be put on the media. Still, it looks like the Canadian industry has taken a much more concilaitory approach to the problem of filesharing, by giving up on the price, and offering additional share of downloaded fees to artists as well - so at least they're trying to adress some of the complaints on this and other forums.
I remember back in the day when LPs (aka vinyl) were common, cool stuff was included by the cool bands. The four KISS solos done in the 70's each had poster that were a part a larger one (I had all four). My "Face Dances" album had a cool poster. A band I bought a couple of LPs by called the Feederz, had full jacket sized double sided sheet with cool anarchistic cartoons and sayings. This just a few of the cool things that would come with LPS.
I don't see any of this with today's CDs. Of course I do understand the spatial problems with packaging, but the media companies need to give people an incentive to buy the CD rather than a monetary one. Entice the people into buying the CD so they can get a T-shirt, poster, or something else from the artist. Folks are going to choose free over any price if they can get the same thing.
Wow, somebody at Universal must have taken an introductory Economics course, learned about supply and demand curves, and realized you don't maximize your profits by continuously raising your price -- especially so on non-essential items like music!
"Freedom means freedom for everybody" -- Dick Cheney
What you are seeing is the normal life cycle of a monopoly. When the public gets mad the price goes down, for a while. Then the price goes back up. Usually even higher.
Consider the price of gas. Remember when you thought to yourself that if it went over a buck a gallon you'd stop driving and take a bus? People get upset, the price goes down, and then starts creeping up again.
If you have a capital market, ie not a monopoly, then the price stays down. There are what 7 major lables, and they cooperate on the price. It's a monopoly.
You can claim your tiny victories, but as soon as you buy one CD you've given the victory away. I buy maybe one cd a year (if that). (I don't fileshare either). Basically the whole system has turned me off, I now just play my own music, or listen to the radio.
Oddly enough, many employees think this as well, and I've known more than one person who turned down a small raise because they thought it would actually throw them "into the next tax bracket".
:)
Up here in the great cold north, higher tax brackets only apply to income ABOVE THAT BRACKET. It's not like the rest of your salary gets taxed higher because you got that $500 raise.
YMMV in other countries, of course
Endless arguments over trivial contradictions in books written by ignorant savages to explain thunder in the dark.