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

Cheaper music?

[Gr33nNight]

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

No Piracy

[whisper_jeff]

The Canadian version of the RIAA is spinning the news as being a direct result of music piracy.

They can spin it however they want, but it's legal for Canadians to download music. It's part of the reason behind the tarifs we pay on storage media (as much as $25 on an iPod, for example). I'm paying for my right to download music, thank you. Now be sure to give my money to the artists and not line your own damn pockets.

Re:No Piracy

[kebes]

It's part of the reason behind the tarifs we pay on storage media (as much as $25 on an iPod, for example).

Actually the levy on blank media stands (though it was recently reduced), but the levy on iPods was challenged and overturned. Apple has a page explaining that the levy was overturned and how to request a refund if you paid it.

(Unfortunately, the $ millions overpaid by Canadians on the blank media levy will apparently not be refunded to consumers.)

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.

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.

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.

More Insightful Article on Why HMV's Doing This

[theshowmecanuck]

This article from the Globe and Mail provides some more interesting insight into why they are doing this.

However it raises more questions. Like if younger people are buying more old Pink Floyd albums (errr... CDs), why is HMV charging $10 dollars more than newer CDs? After 30 years on the market you would think that 'Dark Side of the Moon' or the 'Led Zepplin' CDs had made their money and maybe could be reduced to the price of say, a CD produced in 2007?

And for those who don't know, HMV is the Canadian equivalent of, for example, the chain of Virgin record stores. In fact, HMV recently took over the Virgin location on the corner of Burrard and Robson in downtown Vancouver.

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.