Universal Music Group Goes Crazy With the Cheeze Wiz

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.