Note what I wrote here yesterday about the price of CDs:
- File-swapping and the rise of DVDs have combined to expose the outrageous rip that are retail CD prices – people will buy more if they think they are getting a good deal: paying more for the soundtrack than the DVD is not what the consumer considers a good deal. Cut the retail price in half and we’ll talk.
Some retailers are doing just that:
- Discounters such as Best Buy, Wal-Mart and Target are luring music buyers by slashing album prices — by half, in some cases. They use CD fire sales to get customers through the door, where they’ll be exposed to big-ticket items such as stereos, computers and televisions.
”Big-box retailers are using music to drive traffic,” said Colin McGranahan, retail analyst for Sanford C. Bernstein & Co. in New York.
”It’s what grocery stores used to do. You would go in to pick up milk and leave with a steak,” McGranahan said. ”Except here you go in for the new Britney Spears and you end up with a $1,700 refrigerator.” [The Tennessean]
Of course the problem here is that music-based retailers like Tower can’t afford to seel their primary product at a loss: the wholesale price they pay has to be cut in half for this to work. That’s up to the labels.