Universal CDs now under $10

[Phait]

http://gizmodo.com/5496542/universal-to-cut-all-cd-prices-to-below-10

 

 

 

Is there any doubt that the value of purchased music is plummeting? Universal, one of the big four record labels, is planning to cut the prices of almost all of its CDs to between $6 and $10.

 

 

 

This new test, called the Velocity program, represents a pretty serious price cut, as the average price for CDs has been between $10 and $12 for some time now. And if it sticks, you can expect to see other labels following suit.

 

 

 

Of course, this could make physical CDs cheaper than digital downloads, which makes no sense at all. Why the labels are trying so hard to keep selling CDs when people clearly are more interested in digital files is beyond me.

 

[elsongs]

 

But CDs have a much more warmer sound, while MP3s sound so cold and harsh...

[Rudolf von Hagenwil]

yes, of course, and soon artists must pay that record companies can give the music to the poor for free, and a soup of course which gets deducted from the roadies salary

[Ernest Buckley]

The CD is dead and has been for some time even though I still buy them. My first record sells more downloads than CDs. Granted its easier to spend $.99 on a song you really like than $12 for an entire CD and only enjoy 2-3, even though I would like to believe all of my songs are of equal quality.

 

I have serious doubts about the future of selling music. The live gig seems to be where its at and thats fine except, at 37, I don`t have the interest to do so. So, where does that leave me? Back to where it all started... doing it for the simple joy of doing it.

[Alndln2]

I'd like to see the companies split things up into 2 things, downloadable single songs in .mp3/mp4 like they are now, and sell DVD-A and do away with 16 bit/44hz CD's. CD's are too close to consumer level quality-wise to compete with on line downloads at the moment to be a viable choice anymore, and DVD-A would satisfy the audiophile more than CD's.

[Ernest Buckley]

 

I'd like to see the companies split things up into 2 things, downloadable single songs in .mp3/mp4 like they are now, and sell DVD-A and do away with 16 bit/44hz CD's. CD's are too close to consumer level quality-wise to compete with on line downloads at the moment to be a viable choice anymore, and DVD-A would satisfy the audiophile more than CD's.

 

 

Yeah, I like that. Also, with DVDs, you could put a lot more info on there. I`m always into "the making of an album", interviews with the artists/producers and even a couple of videos. Don`t know if that would sell a ton of DVDs but at least you`re giving people something more and the audio quality is higher for people like us who care.

 

The thing is, you`re probably going to have to sell the DVD for $20.

[offramp]

Well, then with all that stuff, it'd be more likely to be worth it.

[Jeff da Weasel]

 

Well, then with all that stuff, it'd be more likely to be worth it.

 

 

Exactly, which tells you something about perceived value.

[MikeRivers]

Jeff, how's this likely to affect folks like you who sell CDs off the stage? If this becomes the expected price of a CD from a store, will they expect it to be less when purchased direct from the artist (as it usually is now)?

[Jeff da Weasel]

 

Jeff, how's this likely to affect folks like you who sell CDs off the stage?

 

 

Mike, even most indie guys like me are selling way more downloads than CDs these days. I haven't had enough time to really have the pattern down, but so far it's been at least 3:1 downloads to CDs.

 

Even at live shows, it's harder to sell CDs at all. People find out you have your stuff available on iTunes, and many would rather purchase it "after they get home" (which, of course, some then do and some don't).

 

But on a direct basis, it does affect the price of CDs at shows. It used to be pretty typical for indie artists/bands to sell discs for $10 live (which was already a discount of a couple bucks from a store price). Now you're seeing more people selling discs for $5 at shows. The other thing to keep in mind is that most people do understand that indie artists don't have some huge corporation behind them and are okay with paying a bit more, kind of in the same way people will pay more for hand-crafted furniture than something they get at Target, even though both will end up functioning similarly.

[Lee Flier]

Yeah, what Jeff said, although Jeff your situation is a bit different because you mostly gig in SL etc. We still sell quite a few CDs at actual "live in the flesh" shows because people like to walk away from shows with something physical. They don't necessarily want a business card with a URL where they can download the songs , although some people do ask for that if they don't have any cash on them to buy a CD.

 

We typically charge $10 for direct sales at shows, although once in awhile we'll give a special discount to some poor broke fan.

[blue2blue]

 

 

The value remains unchanged. But the cost is finally sinking.

 

 

I think people sort of hit the wall on paying for CDs when they were getting at least one or two 'free' trial CD-ROMs a week in the mail from AOL and others back in the nineties. I strongly suspect that people said to themselves, Gee, if these guys I've never given a cent to can afford to hit me with a couple disks a week, it must not be very expensive to make them...

[Jeff da Weasel]

Yeah, what Jeff said, although Jeff your situation is a bit different because you mostly gig in SL etc. We still sell quite a few CDs at actual "live in the flesh" shows because people like to walk away from shows with something physical.

 

I was actually referring to my "in the flesh" shows (seems odd to have to differentiate that).

 

I have people asking at the show if they can "download it after they can get home" simply because they're just not into buying physical media anymore. But some people -- mostly older, not surprisingly -- prefer having something to take home with them.

[spokenward]

Billboard's article has stats on historical unit sales:

 

 

Yet merchants have long clamored that lower pricing will prolong the life of the CD, which is down 15.4% so far this year. Album sales were down 18.2% last year, and 19.7% in 2008, when CD sales totaled 360.6 million, as opposed to the 706.3 million units CDs scanned in 2000

 

 

Billboard

[Hard Truth]

If they had lowered the price ten years ago I think the CD would not be dying off so quickly. It is especially ridiculous that you can buy a DVD of a concert for less than the CD of the same content in audio only.

 

In my opinion the pro-vinyl detractors of CDs have done a lot of harm to the prospect of decent quality audio being available in the future. They wrongly helped turn people against CDs and didn't support DVD-As. In the future we may wind up without access to better than MP3 quality audio-only products.

 

I like DVD-As but I'm the only person I know who actually has a player. I never met anyone with SACD player. DVDs with DTS audio are compatible with all DVD players, sound nearly as good and can have more extensive visuals, so they are much more viable commercially.

[Beck]

It's human nature for people to want to possess a physical thing like an LP or CD. Even when mp3 or any other compressed formats are no longer necessary (very near future) many people will still want a CD or better physical format.

 

As it stands, for me mp3 is a sample... gives me an idea if I want to purchase the song or album on a better format... like vinyl.

 

mp3 is like FM radio to me... sometimes AM if its a sucky mp3. It’s convenient, but that's about it... and I like to watch the vids on youtube. But CD is still such a sonic improvement it blows the ears away after listening to mp3 for a while. And when I listen to the same album on vinyl or reel-to-reel that's a whole 'nother country of sonic bliss.

 

Gotta be careful to consider your audience and how much demographics have changed in the US since the days when we assumed SACD and DVD Audio, etc, would be the future. The country is much too diverse for raw numbers to tell us anything. I don't give a rat's ass about Lil Wayne or his audience when considering formats. Unless you're making music for that demographic they don't count. Same goes for Toby Keith and his audience.

 

So if you don't know exactly who prefers CD over mp3 downloads you really don't have enough information to decide. Lowering the prices on CD is probably a smart move. CD sales are still ahead of digital downloads as far as whole albums go. Maybe this will help keep them there.

[Ernest Buckley]

 

Jeff, how's this likely to affect folks like you who sell CDs off the stage? If this becomes the expected price of a CD from a store, will they expect it to be less when purchased direct from the artist (as it usually is now)?

 

 

Hey Mike,

 

I know the question wasn`t for me but in my case, my album was released in early 2007 and I have done very low volume. I would say to date, I have sold about 40 CDs and about 120 downloads. I don`t gig either so that doesn`t help. However, even if I did on a weekly schedule, I doubt my numbers would really be that much different.

 

@ Jeff,

I would be curious to know what your numbers would be if you did perform in the "real world" on a weekly basis.

[Jeff da Weasel]

 

@ Jeff, I would be curious to know what your numbers would be if you did perform in the "real world" on a weekly basis.

 

 

I'm curious as well. Don't think I'll have the opportunity to find out, but I'm sure (as Lee says) that my ratio of CD to-download sales would go up a lot if I did more live gigging. When I do play in the flesh, and we set up the little merch table, we do move CDs.

 

Touring/regular gigging, like it or not, is still essential if you're trying to sell music.

[the stranger]

$10 would have been fair about 5 years ago. Now, they better think $5 if they want to stay competitive. Start treating them as disposable and start buying space on every gas station counter. $5 for new releases, $2.99 for classics, like joe blow's greatest -hits and what-not. Also, at those prices and the resulting surge in purchases, you could bet that Wal-Mart and the other big boxes would reverse the trend of phasing out music. I would guess the CD racks size would triple very quickly.

 

At that price, I would probably buy at the least, a few CD's a week. I appreciate the physical medium, and the inserts, and having a physical backup. Plus, when you make them that cheap, people won't care if they wear it out and buy another one. Not trying to add to the landfills, but let's save the music business and then we can worry about the environment.

 

After they do that, then the only step is to bring back vinyl. That's where the 19.99 an album comes back in. Unique sound, room for expanded artwork, and old style inserts makes the "value" a much better ratio. This is where bands can get a return on the album investment. There is a reason people love vinyl so much and why not capitalize on that for the whole market. The act of listening to a record is also more ritualistic and far more engaging than "background music", which is mostly what we have now.

 

The ability to also use different mastering strategies with the various formats would also demonstrate to the listener the increased "value". MP3's would of course be mastered for obstacles like "road noise, etc" ().

 

The consumer would know that to get the full effect of an album, you need to buy the album for the true "high fidelity". And the best part is you can't send a record through a torrent!

 

All the above ideas have been culminated from my ideas added to all the comments I've read in Craig's forum over the years regarding the music industry, etc...

 

If they would just do it, which is a whole other story.

 

But, just imagine if records hit the mainstream again? New record players and stereo systems to play back on...you could bring back stereo stores! Record stores! Holy cow, this would be more than just the industry...we can save the whole economy! Sock hops! Jukeboxes! Bring back the whole mess and start an economic recovery program.

 

I'm serious.

 

And imagine what kind of cool new record technology they could cook up these days; demand and investment resulting in new way to reproduce sound in that physical manner. Maybe it would be lasers and titanium records that would last forever and have triple the dynamic range...no reason it isn't feasible and would be inexpensive in light of demand.

 

I say sometimes progress starts the whole losing sight of the forest for the trees and not realizing that some things are already perfect and shouldn't be abandoned, just for the sake of progress.

 

Also, bring back singles. 45s, 78s, splits, remixes, whatever. An album is just that and should be approached as such. A lot of times, it's a waste of money to make a whole album if you are dealing with a one hit wonder, ya know?

 

Yes, this is taking shape in the mp3 market, but the reality is that market was dead when it started. I honestly don't think you can put that cat back in the bag. That generation (as was mentioned over the years) will be conditioned to accept the sharing of music and the truth is, they already are.

 

But, I did it when I was a kid. But, it was dupping cassettes! I always thought duping a tape for a poor buddy who didn't have cash was doing the right thing. I was spreading music, helping the poor, and gaining obscure bands another fan.

 

I don't think you can stop the flow of quality jams and I thought that was the point. But, I still believe in IP rights and have always felt that for what I got out of a good album, the price was nothing, and why wouldn't you want to support a band you love? I mean, I grew up on more than a few albums. They shaped me as a person and I still listen to them to this day. I can't even try to quantify a value I get out of a good album. It's priceless, I guess. Even that doesn't sum it up. And to think I got all that for $10!!! That's a deal.

 

I do understand one has to take inflation into account, by we all know what manufacturing a disc costs. AOL, remember? We're not stupid, and if you sell a 100K copies of a CD at $5 a pop, that's $500K. And how on earth can you not make a profit like that? We know it don't cost much to make an album. A great album can be made for cheap. All you need is talent and some decent gear, and a guy who can put it together. How much did Elvis makes records for? Figure that with whatever you can print up 100K cds for and it looks like a profit to me.

 

The truth is, you can't figure in million dollar marketing campaign into the cost of making an album. If the music is good, it will sell itself. Only in the case of total prefab crap do you need a media blitz to convince the masses your lame-o dung is cool.

 

P.S. Perhaps these labels could get off their ass and open the vaults and get all this out of print stuff on the market, while they're at it.

 

/end I wanna be a record company ceo rant (Maybe Craig can give me a reference.)

 

[the stranger]

[YOUTUBE]fiIt3jKusBQ[/YOUTUBE]

[Rudolf von Hagenwil]

It's human nature for people to want to possess a physical thing like an LP or CD. Even when mp3 or any other compressed formats are no longer necessary (very near future) many people will still want a CD or better physical format. As it stands, for me mp3 is a sample... gives me an idea if I want to purchase the song or album on a better format... like vinyl. mp3 is like FM radio to me... sometimes AM if its a sucky mp3. It’s convenient, but that's about it... and I like to watch the vids on youtube. But CD is still such a sonic improvement it blows the ears away after listening to mp3 for a while. And when I listen to the same album on vinyl or reel-to-reel that's a whole 'nother country of sonic bliss. Gotta be careful to consider your audience and how much demographics have changed in the US since the days when we assumed SACD and DVD Audio, etc, would be the future. The country is much too diverse for raw numbers to tell us anything. I don't give a rat's ass about Lil Wayne or his audience when considering formats. Unless you're making music for that demographic they don't count. Same goes for Toby Keith and his audience. So if you don't know exactly who prefers CD over mp3 downloads you really don't have enough information to decide. Lowering the prices on CD is probably a smart move. CD sales are still ahead of digital downloads as far as whole albums go. Maybe this will help keep them there.

 

over and over again i am amazed what fantasies and marketing concepts you develop which are obsolete before you ended the thought

 

you can order CD online with whatever combination of music you like, one track of Pink Floyd and all other John Mayall & His Bluesbreakers for example, then the postman brings it to the door of the Sammler und Jäger

[spokenward]

just one guy speculating here -

 

I posted the Billboard reported stats above that would posit sales are now in area of 300m CDs, down from 700m + in 2000.

 

The Universal pricing move is not intended to revitalize the industry. This is more of an endgame aimed at keeping their new release CDs exposed at the few retailers that actually merchandise new release product. If you are in a business that has shown no growth and declining demand you are simply competing for square footage with other products with better markups and more growth. The Billboard story suggested that the pricing structure would point to a 7.50 cost and a retail price point at $10. That margin works for a handful of big retailers with a handful of new releases on the endcaps. It is aimed at dominating the limited shelf space that these merchants are providing. These aren't principally music retailers, because we have already killed those. There is nothing that compels WalMart and Target to stay in the CD business. These really big retailers have no real incentive to completely drop their departments, but they will continue to streamline and reshape them to suit their own purposes of traffic, competition and dominance.

 

The music business in a download based future has nothing to offer these big retailers in the long term. This seems more like choosing partners for the last dance.

[Rudolf von Hagenwil]

what do we need cows for when milk is coming out of a plug and electricity can be bought in TetraPak

[Rudolf von Hagenwil]

why does 1500 milliliter mineral water cost less then a Jessica Simpson CD

[Rudolf von Hagenwil]

why does a kilo banana which get carried over the ocean cost less then a kilo apple from the neighbour