Lower CD prices to spur increased sales?

Anyone who follows any aspect of the music business these days is keenly aware of the precipitous decline in the sales of audio CDs. This drop has been ongoing since roughly 2000, and with some minor variations, can be found across all genres of music. Artists and record labels have faced this change in consumer spending habits with dismay, as the still-growing sales of digital downloads has yet to make up the difference.

Some in the industry say that pirated digital tracks are the reason for the decline, while others see increased competition from video games and other forms of electronic entertainment targeted at the core youth market for recorded music as causing the slump.

In what may trigger an avalanche in the biz, Universal Music Group, a huge conglomerate boasting hundreds of popular artists, has announced their intention to reduce the wholesale prices they charge to distributors and music retailers from over $10 to $7.50. This will start with a test program in the 2nd quarter of 2010 to see if the reduced prices actually lead to a larger number of CDs sold.

The company’s goal is to see the price of manufactured CDs end up as competitive with digital downloads from iTunes, while also beginning to offer more specially-packaged CDs with pricier added content and features.

It will be interesting to see if this is quickly copied by other large labels, and whether it filters down to the independent and specialty labels that produce and market the music we cover on Bluegrass Today.

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About the Author

John Lawless

John had served as primary author and editor for The Bluegrass Blog from its launch in 2006 until being folded into Bluegrass Today in September of 2011. He continues in that capacity here, managing a strong team of columnists and correspondents.