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UMG to lower U.S. CD prices

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There’s been so much push for digital, downloadable content lately that we’ve almost forgotten about our old friend, the compact disc. Even though CD sales are plummeting each time our little planet makes another orbit around that bright, flaming thing in the sky, the big boys don’t seem to be willing to throw in the towel just quite yet. In fact, UMG is working to implement a new pricing structure that will hopefully bring CD prices down to a maximum of $10 a pop.


UMG plans to make up the difference with more units moved, and with a push for “deluxe” versions of albums that will cost a bit more, but come with all sorts of fun and exciting extras.

“We think [the new pricing program] will really bring new life into the physical format,” Universal Music Group Distribution president/CEO Jim Urie

The new structure plans to keep a 25% wholesale profit margin. So an album you pay $10 for, wholesellers will get for $7.50. We’ll see if that’s enough to get everyone on board with the move. People already behind it include Newbury Comics CEO Mike Dreese and Trans World Entertainment CEO Bob Higgins. The rest of the music industry doesn’t seem too excited though.

But they’d better do something if they want to get CD sales out of their current nosedive. 2008 saw 360.6 million units, barely over half of the numbers in 2000. iTunes and other retailers seem to have set 10 bucks as the magic number people will buy albums at. Granted, if people are willing to shell out $10 for a digital album, a little more isn’t so unreasonable for a physical copy. With art, liner notes, and all the rest.

Universal’s move here seems to show the music industry is finally starting to look into some longer term solutions that just suing everybody left and right. We’ll have to wait and see if any of the other big labels make similar moves.

[Billboard]

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