HMV Canada Cuts Music CD Prices

umStefa notes a CBC story reporting that the largest music retailer in Canada, HMV, has slashed prices on CDs and is attributing the move to demand by customers for lower prices. The back catalog of popular artists will see price cuts of up to 33%; the cuts average 20% across the board. The Canadian version of the RIAA is spinning the news as being a direct result of music piracy.

Comments

Right...

[PunkOfLinux]

Because, as we all know, customers who want CD's at a decent price are OBVIOUSLY pirates...

Re:Right...

[Otter Escaping North]

Because, as we all know, customers who want CD's at a decent price are OBVIOUSLY pirates...

You know - I'm living in Canada, never used p2p or anything like that to download music...don't consider myself a pirate at all. Happy to pay for the materials I want. Upon hearing HMV is slashing prices - I rejoice and head to the website.

The White Album is still forty-five freakin' dollars!

Piracy causes lower prices then, does it? I guess I just haven't been doing my part.

Re:Right...

[djdavetrouble]

CD's were overpriced from the get-go! The fact of the matter is they were all getting over like fat cats, lower manufacturing costs,
higher retail, win win for the companies. Too bad the party is over now, bitches !!!!!

Re:Right...

[pokerdad]

They are lowering there prices because everybody has caught on that they are really high.

If only this were true. Once upon a time HMV was a music store that screwed people. Then people stopped buying music there so they started selling DVDs. Just last month they added video games to the mix. I was in an HMV last month, perhaps 25% of the shelf space was for music.

This cut isn't because HMV has figured out what they were doing wrong, its because they make all their money off of DVDs and games and the few CDs that are left in the store are stealing valuable shelf space. Despite the fact they continue to market themselves as a music store, I think its just a matter of time before the music is gone.

Re:Right...

[Znork]

"Piracy causes lower prices then, does it?"

Well, that, or the other way around; monopolies will charge what the market will bear. When you have a legal monopoly you maximizie revenue by setting the price at a point where a lot of consumers will not be able to afford the product (ie, 45 dollars).

As piracy is the only actual competition, it is the only thing holding prices back. Without it, you could expect the same White Album to be $60. Or $100. With working mandatory DRM and/or per play charges, you could expect an even higher price... the only limit would be when so many consumers would rather eat that an increase in price would result in a decline of total revenue (which, for various reasons ranging from possible rate of consumption (limited by time/day) through marketing efforts is at a very high price).

So, no, you havent been doing your part. When prices fall towards free market competetive equilibrium, which for music would be a couple of cents for an album of that level of mass production, then perhaps everyone's done their part.

That will probably not happen before the whole concept of 'intellectual property' is revised to fit a free market tho.

Re:Right...

[InvalidError]

HMV is an entertainment media outlet... they sell CD, DVDs, magazines, books, etc.

It is really funny to read about a media outlet slashing prices to counter piracy after so many years of media outlets using piracy as an excuse for inflating prices.

Where many movies can be had for about $20, it is pretty hard to accept so many audio CDs being listed around $25. Knocking 33% off these only brings them back down to a level that seems more natural - though still on the high side.

Right now, music outlets have to compete on convenience, added value and price to generate sales and counter piracy. At ~$20 per disc, CDs look like a pretty bad proposition considering that very few of the tracks on most discs are worth listening to and getting them off iTunes/whatever would cost less than $10. Filler tracks provide practically no value and in the face of a-la-carte DRM-free music download services, the $20 price tags are simply unsustainable.

HMV is simply using piracy as an excuse to hide the real reason behind the price adjustments: the fact that download services currently offer much better value. Being honest and stating this up-front would be like promoting the online competitors.

Re:Right...

[gemada]

Exactly true. HMV has been by far the most expensive place to buy music in Canada since the 80's. no one buys music there, which is why they switched to selling DVD's and are now probably just lowering the prices on CD's to clear out their stock of anything that isn't Top 10.

Re:Right...

[Otter Escaping North]

So why don't you download it, just like I did, especially that it's legal to do so in Canada?

I feel compelled to reply to this; while I share the sentiment of many on this board that just because something is illegal, that doesn't mean it's wrong - I also believe the reverse. Just because something is legal, that doesn't make it right.

It is legal to download in Canada right now (I'm sure things are in the works to change that), but I don't think I'm entitled to download the album without paying for it. These are the fruits of the labour of others; made commercially for the purpose of profit.

I won't pay $45 for it - I agree it's a sucker's price. I have a right not to get hosed, and I exercise that right. I have a right to bitch about the price, and I exercise that right, too.

(...and if someone goes and spouts off that that's a low price due to <cue scary music> piracy, then I have the right to call them on their crap.)

I don't believe I have a right to own it without paying, just because I want it, or because I don't like the industry, or just because it's legal.

I don't judge anyone else, though. Thanks for the links - it was kind of you to point me to them, hope you enjoy it, but (since you asked) that's why I elect not to download it.

I'll see it on for a real sale one of these days.

Cheaper music?

[Gr33nNight]

So in other words, if people keep pirating, then CDs will be cheaper. Sounds like a win-win to me.

Re:Cheaper music?

[Anonymous Coward]

Not sure I understand what you're saying.

What I meant was that after the initial sale of the new cd takes place -- which occurs independent of myself or my own intentions -- none of the industries which originally got a cut (music/recording/cdr) have any say over it. Therefore, the difference between buying a new cd and an equivalant used cd is exactly that: none of those industries gets a cut of the sale.

Only fair

[Borealis]

Piracy is a direct result of unreasonably priced music so I don't think they're going to garner a lot of sympathy.

CD Prices and Slothful Government

[Stanistani]

So when will CD prices dip below DVD prices?

Also, from TFA:
"A succession of Canadian governments have sat on their hands and done nothing," he said.

Excellent. That's the best kind of government. The type that doesn't make laws just to please some industry group.

Re:CD Prices and Slothful Government

[kebes]

because the cost of movie production involves orders of magnitude more people and money that of an album?

This is probably obvious to most of us, but it bears repeating:

The fact that a CD and a DVD cost the same amount, even though the production costs are orders-of-magnitude different, means that:
(1) A CD album sells far fewer copies than a DVD of a movie does. Thus, the price needs to be higher to recoup costs; or
(2) The price we pay is not really correlated to the production cost. In particular, the claims that the cost of a CD is required to pay all the people involved in the production of the work is greatly exaggerated.

We all know that a merchant feels no particular desire to sell something at a lower cost if people are buying it at a higher cost. In that sense, the cost of goods is never correlated to the production cost, but only based upon the price the market is willing to bear.

On the other hand, in any sector of the economy where there is competition the price of a good on the free market will be driven down closer to the production cost, because one company will always be willing to undercut another company, right up until the point where they can no longer pay for production (and staff, and reasonable return-on-investment, etc.). However, where there is no competition, the price can be inflated arbitrarily high above the production cost.

Again, it's pretty obvious, but I'll say it anyways: The high price of CDs and DVDs is because the market is dominated by a monopoly, devoid of competition.

Well, this shows SOMEBODY gets it

[CellBlock]

At least things work as they should somewhere. It finally dawned on them that "Hey, people don't always steal music, and when it's cheaper, they buy more."

It's quite sad that this has to be such a stunning revelation, actually.

Capitalism

[SighKoPath]

FTA:

Other countries, including the U.S. and Britain, have been able to stem the tide of illegal downloading by updating laws and increasing enforcement, he said, but calls from the recording industry for updated copyright laws in Canada have gone unheeded.

"A succession of Canadian governments have sat on their hands and done nothing," he said.

This is one of the few times I wish the US could be more like Canada. Capitalism? Competition? Free market economy? What's that?

Re:Capitalism

[IBBoard]

We've stemmed the tide of illegal downloads in the UK with laws? Really? Based on the majority of people I know, I think they're misinformed.

Having said that, HMV in the UK almost always seems to be having some sale or other that cuts huge amounts off a variety of CDs, and that's generally one of the few times I'll ever buy it (or some less mainstream album in Fopp that's £15+ as an import in HMV and £6 in Fopp).

Good to see that the Canadians have the sense that people aren't willing to pay over the odds for their music. Also, it's good to see that includes the older bands with the good back catalogue, and not just the modern garbage that's overly manufactured and over priced.

Rising Dollar

[doconnor]

It is probably not the result of piracy but the result of the rising Canadian dollar (or the falling US dollar), meaning that the Canadian dollar is nearly at par with the US dollar, so people expect the prices to be nearly the same.

Prices were unreasonable

[Anonymous Coward]

This also just helps bring Canadian prices in line with American prices for the same products. We have always been getting ripped off and over the last year as the Canadain dollar has risen the prices have become more and more unreasonable.

Movie vs CD

[jshriverWVU]

Never understood the pricing of Cd's. Why is it, that a movie that took 100m to make can sell the DVD for $15-20, and the soundtrack cost the same? Heck the budget on just 1 blockbuster movie could make a couple completely tricked out recording studio's and after that it's the cost of CD duplication which is relatively inexpensive.

When you buy a big name CD I don't think your paying for the CD/music, you're reimbursing the studio for all the money it spent on marketing so you could hear it on the radio, MTV, etc.

A lot of people complain and say they listen to indy artist, and while I can appreciate a good song. How do you find these artist? Everyone know's Gwen Stephanie, and whoever is on the top billboards, and they are there more or less because of the amount of money that was dumped into marketing.

Re:Movie vs CD

[OK PC]

You could claim that films make up a lot of revenue elsewhere, such as box office takings, rentals, TV rights. Still, I think your point stands to a certain extent

Re: "More like Canada"

[Dystopian Rebel]

This is one of the few times I wish the US could be more like Canada.

Yeah, I would never want to change the poverty and disastrous education system, the lack of health insurance for most people, the broken two-party political system, the prison system with highest rate of incarceration in the world, military profiteering and the $34 TRILLION debt load...

But it sure would be great if CDs cost less in the USA.

What unbridled optimism,

[crovira]

to actually expect that the fees collected will go to the artists.

OF COURSE THE ARTISTS GET NOTHING!

Lets review some definitions:

  Slut: someone who does something for the love of it. (see also: Amateur [and its spelled right!])
  Whore: someone who does something strictly for money.
  Pimp: someone who tries to make whores into sluts by removing the profit motive. (see also: RIAA)
  John: someone who pays through the nose for everything.
            (The fuckin' you're getting isn't worth the fuckin' you're taking.)

Books

[ragtoplvr]

The technology to pirate books has been around for a long time.

Almost no one copies them, when you can buy a paperback for a reasonable price, it is not worth your time.

When CD prices and delivery get into the (for me) 3 to 5 dollar range, and the CD includes some nice pretty additional content like artwork, book, lyrics (OMG more possible infringement) poster or something not even thought of yet, no longer worth the trouble to download and record for me.

Price correctly, and piracy goes away. My business (auto parts) had had to cut prices dramatically, and the smart survive, sure the are a lot less high priced executives but we survive.

My .02

Actually in Canada downloading music is not piracy

[hung_himself]

Just a reminder to our American readers, it is legal to share and download music in Canada and it is not piracy. This is a result of a the Canadian version of the RIAA's successful past pressuring of the government resulting in the imposition of a blank media tax. The proceeds are supposed go to the artists to compensate for loss revenues from sharing of music. As I understand it, the courts have deemed that sharing music via the internet is no different than copying a CD and giving it to a friend. Therefore since the record companies already accepted the tax as fair compensation for music sharing - they cannot ask for more. Someone more informed than I can provide the links and clarify the details but we download music here without worry.

But I don't.

I used to be a real record CD hound spending hours combing through the stacks. I used to go to big name concerts regularly. I no longer buy CDs (last I bought was over 10 years ago - some medieval music and some worldbeat) and when we go out it's to listen to small local pub bands, small chamber ensembles or choirs or dance to electronic music DJs. And I'm more likely to play music or sing karaoke than listen to it. A large part of this is just disillusionment with the entire big business music model. Spending a couple of hundred bucks to see Madonna or go to the Opera or listen to a warhorse symphony *again*, doesn't seem to make much sense when there are so many more enjoyable alternative musical experiences.

HMV and the RIAA are full of it

[chriseh]

This price drop has nothing to do with piracy or any other big bad boogeyman. HMV is lowering their prices because Universal has (finally) made an adjustment to the Canadian market to reflect the strong Canadian dollar and dropped prices across the board. This adjustment was to compensate for the fact that Canadian stores were paying about 15-20% more than their US counterparts due to prices that were set to 10 year old currency exchange rates. You'll see the same problem with books that print US and Canadian prices on them, with the current exchange rates, you're much better off paying in US dollars.

  If you want to do the music industry and your ears a favour, boycott HMV, the RIAA, CRIA and the big 5 and buy from the indies and local indy stores.

<shameless plug>
http://www.canadacd.ca
</shameless plug>

Re: "More like Canada"

[Abcd1234]

I couldn't agree more. Unfortunately, both you and the AC who responded, are completely missing my point. I never said 47 million uninsured was a-okay. I'm saying that, if you want to begin a debate on the subject, you have to put away the hyperbole, otherwise you'll just get ignored as an extremist. And yes, saying "most" Americans don't have healthcare *is* hyperbole.

Re:iPods and bongs

[Fox_1]

There was an enormous amount of thought that went into the above post. It's not fully ontopic, but the colourful writing does contain on salient point, Art.

Rarely does a CD match the Pure Physical Art Value of an LP , or even the technical art value of a DVD (special features, commentaries, documentaries, etc). However with the downloading of an electronic file (mp3) all of the other elements that made the purchase of music an experience,(the art) for all of the senses, not just sound, are lost.

The poster illustrates this in the breakdown of 'head culture by the movement from traditional rolling methods to quick and dirty(change the water dood) bongs. What's interesting is if, like horseshoes, physical copies of items (store bought copies) are destined to always retain value, and in fact may even increase in value as electronic downloading makes them more scarce in the marketplace. Will the CD buyer be the Record Aficionado of tomorrow? And will anyone remember how to roll and light a perfect backflip without burning a hole or sucking ash?

Re:Crazy Canada

[Dixie_Flatline]

Actually, we're consistently ripped off. Right now, we're being told that despite the fact that the Canadian dollar trades at between $0.93USD - $0.96USD, prices for goods are still high because inventory was bought when the dollar was low. It's complete BS. High price electronics, for instance, are still several hundred dollars more than in the US. (The only reason I know this is because a friend of mine is aghast that a TV that he wants is almost $800 cheaper in the states. And he can't buy it there and have it imported; nobody will sell to a shipping company. After tax and shipping, the TV is still cheaper, but it's not worth the time anymore. :P)

Prices should have come down a long time ago. These are not the days of the $0.65 Canadian dollar anymore.

Re:Crazy Canada

[timeOday]

Just wait, if the CAN$ ever goes back down, I bet they'll hike prices the next day, no inventory delays at all! Just like gas.

Housing prices are that way. The US has a huge glut of overpriced homes on the market, priced under the false assumption that the bubble had some validity. So do prices go back down to normal levels? Nope. Instead, a huge inventory of homes sit for months and months. Nobody wants to relinquish their phony inflation "equity."

Re:More Insightful Article on Why HMV's Doing This

[Hatta]

Like if younger people are buying more old Pink Floyd albums (errr... CDs), why is HMV charging $10 dollars more than newer CDs?

You just answered your own question there. If people will pay it, they'll charge it.