UMG To Price New CDs Under $10 362
marmoset writes "Perhaps a decade late, Universal Music Group has decided to try out sub-$10 CD pricing in the US. 'Beginning in the second quarter and continuing through most of the year, the company's Velocity program will test lower CD prices. Single CDs will have the suggested list prices of $10, $9, $8, $7 and $6.'" CD retailers are not convinced the price cuts will work out. For one thing it depends on whether other major labels follow suit, but the article notes that "executives at the other majors were nervous about the UMG move" and "privately, some appeared annoyed."
0$ (Score:2, Interesting)
Just like cassettes (Score:4, Interesting)
...when they still existed. I remember having the option between a $13 CD or an $8 "inferior" cassette version, so I picked the cassette. I didn't see why I should have to pay a $5 premium for the disc version.
Now it appears the same pricing has come to CDs. Why pay $13 for a CD when I can just download my favorite 2-3 songs at about $3. The internet is forcing music companies to drop the pricetag for the "inferior" CD format to about $8.
Why inferior?
CDs aren't portable. And take-up a lot of space.
What's the first thing you would do with a CD? (Score:4, Interesting)
Re:CDs! How *quaint* (Score:5, Interesting)
I remember CDs. They made such pretty coffee coasters after I burned all their music to my MP3 player.
I believe the correct verb you're looking for is 'ripped.' But before you go on about how 'quaint' CDs are, keep in mind how nice it is to own something physical. You have, as a physical object, evidence of your licensing of personal enjoyment of that media. I do buy $5 albums on Amazon MP3 but I feel almost like I somehow receive less rights or a watered down licensing of that album as opposed to if I had purchased the album. If you find this concept quaint then why are vinyl sales slowly rising [latimes.com]?
... it's far too empowering for the consumer.
My favorite form of purchasing these albums is vinyl + lossless digital download. A lot of the indie record labels are adopting this method and you pay a $1 or $2 premium on the CD or vinyl album in order to have the music now with the physical artifact shipped to you later. I purchased my Cloud Cult albums in this manner and also She and Him. Instant gratification and I don't even have to take the album out of its wrapper. Don't expect the major labels or even Amazon to warm up to this idea though
Re:Just like cassettes (Score:5, Interesting)
The business model isn't completely dead with this (Score:4, Interesting)
However, when the album and digital copy are near the same price, the physical copy provides a long lasting backup (pressed CDs last longer than burnt), and I have a lossless copy that I can legally use, rip to lossless on my PC, and not have to go on a tracker and seed until my eyeballs fall out of my head for the ratio...it makes sense for a number of albums.
Weird Al Yankovic stated that he was happy for either avenue his customers used to buy music, but his take per track on iTunes was about two cents a track and his take on CDs was about 26 cents- which is pretty major if you want to support the artist.
Anyhow, it's a good move by UMG, albeit overdue. I think it's like the MPAA- the "boston strangler" of VHS turned out to be a major blessing and boon to their business. Hopefully other companies follow suit.
Too late (Score:4, Interesting)
This would have been a great strategy for the late 1990's, when the CD was still a relevant media (and, for that matter, when consumers were demanding that prices be lowered, both through their words and through their actions -- which the industry by and large ignored completely).
I'm not sure I'd call CDs relevant still. We've moved on to solid state media, writeable storage decoupled from the content. You could discount 8-track tapes and they wouldn't sell today. CD's don't have the same analog appeal that vinyl records to, either. I expect that eventually they'll just stop making CDs, and all music will be distributed via the network.
This price reduction merely indicates that we're a little bit closer to that day. I doubt it'll do much to boost sales at this point.
Normal price here. And still way overpriced. (Score:5, Interesting)
In Hong Kong a typical release CD of some local artist costs around USD 10 already. That's been since I moved here 7, 8 years ago. Older releases cost less. Import from US is typically USD 8-12 for a CD.
Now there are a few differences: the entertainment world lives on a smaller budget and the top artists are at a level that wouldn't even make it into American Idol. That says more about the cantopop than about American Idol.
Movies on DVD cost about USD 20 (new releases), older movies are sold at far cheaper prices. On VCD one can buy a movie for a few dollars.
The above prices are for the official media, not for the pirated ones. Those are far cheaper.
Still I think US$10 for a CD is overpriced. Pirated CD's are selling for well under USD 1 each. So that is a $9.something mark-up for what? Recording and artist's share?
Both pirated CD's and official CD's have to be manufactured and distributed. That incurs costs that are independent of the content. The only difference is the actual recording and the marketing. Even the shops selling pirated disks are in the same expensive locations as the official outlets, so even there is no difference: they both have to make the same profit to survive. Both shop's suppliers have to run their trucks and pay their drivers and workers and run their CD/DVD machines.
Official releases have better quality CD (technical: play guaranteed, last longer than a few years) and come in jewel case instead of paper sleeve. That may add $0.20-0.30 to manufacturing. Even when selling at USD 2.50 each the label should be able to make a USD 1.00 gross profit on each. And at that price level it becomes vending machine material, and volume may skyrocket due to all those impulse buys. Sell a million disks, make a million in gross profit. If a million dollars is not enough to cover recording, marketing, and a fat profit, then you're doing something terribly wrong.
Re:Just like cassettes (Score:3, Interesting)
Why would I want to “own” a song? I just want to listen to it.
Re:Shocking (Score:3, Interesting)
Re:CDs! How *quaint* (Score:3, Interesting)
[...] before you go on about how 'quaint' CDs are, keep in mind how nice it is to own something physical. You have, as a physical object, evidence of your licensing of personal enjoyment of that media.
Though the short life expectancy of CDs appears to have been greatly exaggerated, they do have a finite lifespan while music in a more transient form can happily be saved from one hermetically sealed hard disk to the next. Either way, all the CRC checks in the world can't guarantee immortality of any data.
Speaking of transient... I've lived most of my teens going from one place to the next, often losing or giving away my possessions in the process. Those quaint, physical goods meant bullshit to me sleeping in an alley or at so-and-so's couch for the week.
What did comfort me was recovering collections of music from friends I shared with since the days of Napster, an impossibility if relying solely on CDs, regardless of the legality.
I'm an immaterial girl living in an immaterial world. Well, except for my recent journey into my PS3 and buying up used games for it. At least Blu-rays are a little sturdier than DVDs and CDs.
Re:CDs! How *quaint* (Score:5, Interesting)
If you find this concept quaint then why are vinyl sales slowly rising [latimes.com]?
Probably for the same reason that young people prefer MP3s to higher quality music. [slashdot.org] People grow up listening to music in a certain way and the cracks and pops of vinyls, much in the same way as the sizzle sounds of MP3s, are what the listener expects to hear in the music. Because they expect to hear it, the music doesn't sound "right" when they hear high quality recordings without it. So now that baby boomers are reaching retirement age, they look back at what they loved when they are younger and buy old vinyls.
Premium vs Discount Format (Score:5, Interesting)
I see this as a really important shift.
Previously, the CD was the premium format, with all it's uncompressed audio glory. And it is fairly portable, playable in most consumer electronic devices found in the living room or car.
The MP3/AAC format was the discount format. Compressed with some audio loss, and playable in less devices. Also encumbered in some cases with DRM.
The premium format carried a 50% markup, with most MP3 albums costing around $10, and CD's costing around $15.
With CD's potentially costing LESS than MP3/AAC formats, this signifies the market is placing premium on the MP3/AAC format over the CD. This could be because the format is now supported in more devices, or consumers find it friendlier to deal with, perhaps because there's no need to fight the packaging then burn it on your own.
Re:Just like cassettes (Score:3, Interesting)
I gave up on binders because they seem to damage CDs once the plastic in them starts to age and harden. It's usually subtle "pin-holes" in the disc when held up to the light, and it doesn't always audibly affect the sound, but it's still extremely disappointing. My collection is too big and represents too much cash outlay over time to risk it.
I still make a lot of use of CDs, but always burned ones. I keep the original in its jewel case on the shelf.
Re:I Am Shocked! (Score:3, Interesting)
Otherwise, downloads are fine for that one song or two to see if you like it, but mostly they still fail on decent audio equipment for regular listening.
Bullshit. Most DJ's I know have gone to using MP3's for their business needs. Any time you hear music at a club, bar, or formal function these days, chances are you're listening to an MP3. You may be one of those audio-snobs who insist that they can detect a difference but, even if we accept that silly claim, there's no way you can go from "a few people say they can detect a sight difference" to "lossy codecs fail for regular listening".
Re:Just like cassettes (Score:2, Interesting)
My death metal binder hasn't had any new CDs added to it since I graduated from high school back in 2002. The summer after I got out, I spent nearly a whole week ripping every single cd in that binder...now it just sits as a monument to an angrier, adolescent-addled mind :-) I'll pop it open every now and then for nostalgia or to show people that yes, even though I'm all "sitting at a desk programmer wearing a tie" now, I was once an gothish metal head.
I still have the 7/16th inch tunnels in my ear lobes, but I'm proud of those...even though my "crazy" days are behind me, I will still never take a job where they ask me to take out my tunnels.
Re:0$ (Score:3, Interesting)
Mature adult? You tool! The industry is keen to exploit that attitude. It's the biggest reason their war on progress and technology has had some success, why the immense savings of switching from physical to electronic distribution has been mostly unrealized, or diverted into the pockets of leeches. You enable them to continue to deny reality. Artists must switch to another model, one where they want their music freely shared as much as possible, and people aren't "pirates".
$10 is too little, too late. CDs should die. What still exists should be under $5, and they should drop all the smug, self-aggrandizing and expensive anti-theft measures such as the jewel case and its oversized cage. I imagine the typical record exec as a shriveled Gollum like creature hiding in a cave, wearing a CD on his finger-- after the Lord of the CDs had already fallen.
Compact Disks, or "Compact Disks" (Score:3, Interesting)
Re:I Am Shocked! (Score:3, Interesting)
For me, the whole Sony problem was not academic as I was one of the people who had the rootkit. I wasted a lot of time researching and removing it and finally just wiped the system and started over -- with a Mac.
Re:I Am Shocked! (Score:5, Interesting)
Well bands do have the ability to do that - it's just that an unknown band has to decide - do it myself or go with a label that may turn me into a hit? Most decide the later.
I don't think it is just whether the label turns the band into a hit. There is also what I'd call risk equalization.
If you strike out on your own the business model is simple. Either you lose a fair amount of money (whatever you spent on promotion/production/etc), or you strike it enormously rich (probably slowly since you won't have much capital). 99.99999% of the time you lose the fair amount of money.
If you sign with a record label the business model is also simple. You will not lose any money under any circumstances. You will definitely get to keep your advance, which for a 20-year-old artist is a fair chunk of cash. Most likely that will be the end of it, but there is a modest chance that you could make a little more money, and a very very small change that you'll be a mega hit and outlast your contract and be able to be super-rich.
Essentially record labels take money from the people who are hits and spread it out among those who don't become hits (while keeping 90% of the money for themselves). They also take all the risk - they're the only ones putting out hard cash.
For a new band they have the choice of making taking a $100k advance RIGHT NOW, or seeing how many CDs they can sell on their own - without serious promotion. Making even $100k selling CDs on your own is EXTREMELY difficult - especially without any capital investments. Sure, signing the deal means that you could end up getting $120k instead of $25M, but most likely it means you'll get $100k instead of ending up with a crate full of CDs and T-Shirts that you can't sell while you work at the pizza place down the street.
Don't get me wrong - the whole industry needs a major overhaul. However, most people critical of the RIAA miss the fact that it does provide one valuable service to the new artist, and that is the key to their success.
Re:I Am Shocked! (Score:3, Interesting)
As a mobile DJ who has friends all over the industry, I can tell you that MP3 has become the de facto standard here. Sure, you'll find a few jocks who still spin pressed CDs and/or pressed vinyl, but they are a minority.
More often than not, you'll find that you're listening to MP3's anyway. Serato/Traktor/Torq/Virtual DJ have made serious inroads, and they all support timecoded CD and vinyl, so even if they look like they're spinning CDs, if there's a laptop in sight, they're spinning timecode and you're listening to MP3s off their laptop. Even if they have regular discs, companies like PrimeCuts, Promo Only, RPM, etc. also burn MP3 discs, and EVERY DJ-grade CD player plays MP3's nowadays. Finally, services like Crooklyn Clan and Crack4djs.net make their releases exclusively in MP3, so even if they burn Redbook audio CDs, you're still listening to something that started as an MP3.