UMG lowering music prices (per dBs link on the homepage)
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Posted on Sep 04, 2003 02:48 pm
coolo
Frisco's Most Underrated
Member Since: Jan 28, 2003
Well, it seems that at least one of the majors is finally taking action to remedy, what I think is, the main reason that overall record sales are actually falling. Apparently, Universal Music Group is going to lower wholesale costs of CDs to under $10 with the expectation that retailers will drop prices to about $12 for consumers. I've contended for a while now, that the main reasons for the precipitous drop in album sales over the last couple years has to do more with the price of CDs and the troubling economy than downloaded music. Seriously, there are very few CDs I would pay $16-$18 for. But I don't really have a problem shelling out $12. The RIAA seems to have forgotten about the standard rules of supply and demand that state that when you raise prices, demand decreases. Sure, downloading has some effect, but I'm confident that effect is much smaller than the RIAA would lead us to believe. Additionally, with the economy being in poor shape, and unemployment levels high, people have less disposable income to spend on music. I'd be interested to see a comparison of music sales in America's last recession in the early 90s and music sales today. Something tells me they wouldn't be too far apart. Plus it doesn't help that the majors have been peddling a lot of crap as of late. Additionally, the number of releases by majors has dropped alot over the last couple years, so they are trying to make the same amount of money on fewer releases. That means, they're looking for everyone to purchase the same couple albums, and then get surprised when it doesn't happen to the extent they want it too. I don't know, but it looks like the majors have been shooting themselves in the foot, and blaming the results on file sharing. It's good to see at least one major label being proactive and doing something about it, rather than just pointing fingers.
Ok, I'll get off my soapbox now, and quit the rant.
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Sep 04, 2003 02:57 pm Well, I think your right to a certain extent, but I know that most everyone I know tells me that, since downloading has become so easy, they haven't actually bought a CD in years. I don't believe the issue isn't being exaggerated at all. I think it's been underplayed until very recently and I think it has to stop. I agree that bringing down prices will definately boost sales, but it's going to come down to convinience, whether people want to go through the trouble of downloading, or whether the price difference will balance it out. Sure, people use the "CD's are too expensive, anyways" excuse, but just because something is priced too high doesn't give you the right to steal it. I think a lot of gear is too expensive, but I'm not going to start robbing music gear stores. If people weren't illegally downloading music in the first place, the big guys would have brought down the price sooner when they discovered nobody was listening to music anymore.
Sep 04, 2003 03:00 pm Anyone who thinks that things like Kazaa have not played a huge roll in declining record sales is naive. Of course, it is a HUGE reason record sales have fallen. people also use the "if I like the song I buy the CD" excuse too...but I never see any new CD's in those people houses, but they have a jukebox on their laptop.
flame...bringing sexy backMember
Since: Jul 01, 2002
Sep 04, 2003 05:10 pm bear in mind that sales will probably have dropped now that less people are replacing vinyl and cassettes with cd versions of their favourite albums than there used to be...
i might be misguided though
cooloFrisco's Most UnderratedMember
Since: Jan 28, 2003
Sep 04, 2003 09:42 pm This is an article from January, but basically, the Australian version of the RIAA says that file sharing is not the main reason for declining record sales there. And I think the same reasoning holds pretty well for the US.
www.smh.com.au/articles/2...3534002352.html
On a personal note, I have bought many CDs after first downloading songs. Usually, they were songs of groups or albums I wasn't familiar with. I'm on dial up, and downloading entire albums is time prohibitive. So, if I liked the music, I would go get the album.
olddogMember
Since: Jul 02, 2003
Sep 05, 2003 01:17 am I look at P2P programs like Kaaza as both good and bad. Bad in the sense that people are in fact stealing music while using them. Most of these people wouldn't steal a candy bar out of a store much less a CD, yet they see nothing wrong with downloading songs, which is a pretty sad state. On the other hand the Music industry is as much to blame as anyone.
Until recently they have enjoyed an enviable business model that allowed them to charge a premium price for mediocre or worse content and possibly 1 or 2 noteworthy songs. I don't think there is anyone here that hasn't been urked having to shell out $20 to get the 1 or 2 songs on an album.. err CD now <G>, that you really want. The Music industry knows in the end it is going to have to change it's business model and start using the internet to it's advantage but at the same time they are fighting it tooth and nail because they know that mediocre isn't going to cut it anymore and under their current structure profits would plumment, once people can chose the songs they want to shell out the money for.
This will have good and bad consequences as well. For the musician/artists it may mean subtantially less money except for the ones that can deliver what the people to want hear consistently. It may mean the end of one hit wonders, and taking chances on new directions in music among other things. For the Industry it's going to be a hard road trying to find the talent neccessary to support the industry as a whole. Radio stations and the like will likely find there costs rise substantially meaning possibly the end of free radio? Far fetched? I don't think so, TV was once free to the consumer too, but very few of us make do with what over the air TV gets you these days and radio will be forced to follow suit, much as the satellite radio stations are doing today.
Cheaper CD's may buy them some time, but the domino's are already falling.
Amazing what one little program can set in motion but one thing is certain, change is inevitable, how they deal with it will be interesting to follow to say the least :)
zekthedeadcowEat Spam before it eats YOU!!!Member
Since: May 11, 2002
Sep 05, 2003 09:01 am I think it's also important to point out that UMG is in serious financial trouble and is currently for sale. Vinivedi(sp?) was over 20 billion dollars in debt (thats half of Enron) as of last spring and they claim most of the debt came from UMG. If UMG can report a higher volume of sales them they can report controlling more of the market which is already 30% and therefore makes them more attractive to buy.
These are record execs... they arn't lowering the price to be nice.
glynbMember
Since: Dec 16, 2002
Sep 05, 2003 09:27 am You guys should complain. We in the UK have been even more ripped off over the years, as with many things we pay in £ what you guys pay in $ but the exchange rate is about 1.5$ to 1£.
I would be prepared to pay up to $7-8 per CD, no more, its just not worth it for most music knocking around today. Don't make it like they used to, grumble, moan, old fart...
Sep 05, 2003 12:45 pm Quote:
I think it's also important to point out that UMG is in serious financial trouble and is currently for sale.
Maybe HRC should buy it :-)
As far as downloading affecting sales and such as mentioned earlier, I have no doubt that other things play rolls in decline of sales, such as a bad economy, market saturation, little worth buying, etc, but the fact that downloading is being so downplayed makes me think that the journalists themselves just make this crap up so they don't feel guilty for their own piracy. There is NO WAY that downloading has done anything but hurt the industry...it's just common sense.
In the long run I think it will be good for the industry once they figure out how to use it instead of fight it and once the artists realize that labels are not "needed", but until that happens, the labels are gonna get hammered...which isn't a bad thing, they need it.
flame...bringing sexy backMember
Since: Jul 01, 2002
Sep 05, 2003 01:12 pm the internet is the marketing tool to be using though...cheap, easily accessable and very versatile...
Sep 05, 2003 06:09 pm i know downloaded music has played a major role in what CDs i buy. if i hear an album and it sucks i don't buy it!
Sep 05, 2003 06:10 pm i'm not saying i d/l copyrighted music: just that most of my friends do so i'm heavily exposed to it
