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Universal Music Group Goes Crazy With the Cheeze Wiz

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UMG (not to be included in the NBC-Universal merger) has slashed their CD prices – this is exactly the right move:

    In a move intended to stem illegal file-sharing and drive consumers back to retail, the world’s largest record company has instituted a $12.98 MSRP list price on all front-line CD product. The move also represents the end of all traditional retail co-op and discount programs, including price-and-positioning and rebates, long standards in the industry.

    Beginning Oct. 1, the start of the Q4 selling season, all UMG albums, which ranged from $16.98 to $18.98, will carry the new list price, which means retailers can sell the albums for below $10. Wholesale prices will now drop 25%, from $12.02 to $9.09, except for a handful of superstar artists, two examples given were Shania Twain and Eminem, which will carry a $10.10 price-tag.

    Said UMG Chairman/CEO Doug Morris in a conference call: “We believe that music is, and always has been, a great entertainment value. With this bold move, it becomes an even greater bargain that will drive consumers back to the stores and significantly bolster music sales.”

    ….Morris pointed to the pricing decision as an important means to fight piracy, along with legitimate download services such as iTunes, BuyMusic.com and Rhapsody: “We’re being plagued by criminal behavior and fighting very hard to come up with a strategy to invigorate the music market. The consumer will get a tremendous value from this new pricing, and maybe I can even fill in some holes in my album collection.” [Hits Daily Double]

Hmm – giving your customers a better deal in an effort to generate business. This may even work better than suing them.

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About Eric Olsen

  • http://w6daily.winn.com/ Phillip Winn

    So now the wholesale prices are a big whopping 90 cents less than an average iTMS album? Ouch.

  • http://w6daily.winn.com/ Phillip Winn

    I just checked iTMS, and I note that Shania Twain, mentioned in the article as garnering a wholesale price of 10.10 per album, has six albums (sort of) on the iTMS, and each is $9.99 or less. Eminem has three full albums available (sort of) and they’re each $9.99 as well.

    Interesting.

  • http://www.morethings.com/log Al Barger

    For one thing, Universal may make up a significant part of this price reduction by added efficiencies. Note how the article says that they’re ending numerous types of advertising and promotional subsidies and categories.

    Beyond everything else, it sounds like they’re going to simplify a lot of accounting crap. Besides savings from the costs of the promotional payments and discounts, just in accounting alone they should save quite a bit.

  • cjones

    Its still too much. $5 a pop and they will do well forever. Thats very reasonable when you are only going to get 2 or 3 good songs anyway.

  • Eric Olsen

    CJ, I agree in the long run – that’s certainly where the download price should be – but to get to that price for CDs I believe they’ll have to make some changes to contracts and pretty much restructure the whole biz. At least this is heading in the right direction. I remember buying new vinyl albums for under $3, say in 1971 – I wonder what that would translate to with inflation. But that price wouldn’t take into account that it is actually cheaper to make CDs than vinyl records, and there have been other efficiencies as well. I think these “software” prices should come down over time like the hardware does.

  • http://www.unproductivity.com Tom Johnson

    The thing that strikes me when I read a comment like Cjones’ is (not picking on you, I swear, just using your comment as an example!), you’re listening to the wrong music if all you get out of a CD is two or three songs. The further from the mainstream I’ve gotten – in general – the more quality music I’ve tended to find, not to mention music that tends to stand the test of time. But, of course, the music that provides quality entertainment forever tends to not be the “easy” pop singles radio/TV favors, which is what makes those albums sell in the first place. Double-edge sword – without the radio play, these groups go unnoticed but by those who actively seek it out. But again I ask, why don’t you want to seek out something that will continue rewarding you long after the two-hits-per-album groups will? It’s extremely rare that I find myself owning an album that I only care for a couple songs off of, and it’s because of what I pick to listen to, and how I listen to music, too, I guess.

    The solution here, of course, is something along the lines of iTunes for people like Cjones, who only want a couple songs by someone. This is tailor-made for situations like this. What I fear happening is the destruction of bands who care about putting out a song cycle rather than a single because things like iTunes will slowly mold bands and music in general into hit-makers, and only hit-makers. Think of it this way: would Wilco be a hit with a single song from Yankee Hotel Foxtrot? No, it’s the album as a whole that really works. I, for one, will be extremely sad – devestated, really – to see things like YHF go the way of the dodo.

    Hmm . . . I veered off-topic. I never stay on-topic. Sorry.

  • http://www.foliage.com/~marks Mark Saleski

    yep, that whole “one or two good songs, the rest sucks” thing has always kinda mystified me.

    i’m sure it happens to people, just not to me.

    i’ve always prided myself on having good ‘music radar’. out of around 2000 cd’s i think there have been, at most, maybe 5 misses (a notable one was Lee Rittenour’s “Harlequin”…this was before i knew about the GRP label….i think i heard a tune of his on the radio and then picked a random cd….man, it was icky).

  • http://www.morethings.com/log Al Barger

    would Wilco be a hit with a single song from Yankee Hotel Foxtrot? No, it’s the album as a whole that really works. comment #6

    If the individual songs don’t work, then a whole album of them is just going to be a big suckfest- such as the ridiculously overrated Wilco album.

    On the other hand, single tracks from even a fairly involved concept album will typically work individually. You might lose something of context, but, for example, “Brown Shoes Don’t Make It” works fine as an independent statement. You could also play just a single movement of a Beethoven symphony, and it would still kick ass.

    Being a so-called alternative or experimental band doesn’t mean that you have better or more consistent material than a more avowedly commercial band.

    Collegiate ideology aside, has Sonic Youth ever written a single worthwhile SONG?

  • http://www.unproductivity.com Tom Johnson

    Al, I agree that Yankee Hotel Foxtrot was overrated – in terms of being a groundbreaking album of new sounds, at least. It was overhyped to the point of nearly ruining the experience for me, but luckily that hype has died down. There’s nothing on YHF that hasn’t been done before, of course. It’s only “ground-breaking” in that it might be foreign sounding to mainstream listeners – the same people who were shocked by Radiohead’s Kid A. While I love Kid A, it is in no way groundbreaking – I’ve heard those sounds out of Aphex Twin and Autechre, not to mention countless other smaller electronic acts, for many years before it arrived. But it brought it to the masses and they were pegged as the creators of that style, like Nirvana brought “grunge” to the masses and suddenly they were the fathers of the sound.

    But YHF is an amazing album of moods, and like probably 75% of my collection, it doesn’t work in “single song” mode but instead as a whole experience. I’m not saying that you’re wrong for disliking it, because it’s certainly not for everyone, and even I have to be in the right mood for it, but it is certainly a worthy album.

    There are compromises made when making a song stand on it’s own. They’re not necessarily always bad, and they’re also not always good, either. Look at what happened with Liz Phair because she wanted hits, instead of remaining the “underground” darling that she was. I’d rather have a set of songs that function well together than “singles” that wear themselves out after a few spins. Singles function to catch your ear and so are tuned to be ear-candy. Very often the big single is the very song I can’t stand off an album – not only do I get tired of it because it’s usually the most shallow moment of the album, it’s also overplayed because it’s simple and easy and the majority of people will respond in some positive way to “simple and easy.”

  • Eric Olsen

    You’re right about the “mood” thing Tom – cohesive albums create a mood that songs alone cannot. It’s an entirely different aesthetic, one that values diffusion over brevity. Sometimes I am looking for one, sometimes the other – it’s a matter of my mood.

    And Al, Sonic Youth has many great songs, beginning with “Teenage Riot.”