Can Universal Records Save The CD?

Here's the latest episode in the major labels attempt to their own sorry necks. What's the 'hail mary pass'?

Sell more CDs.

 Seriously.

Yep, dinosaurs aren't renowned for their smarts. The story would be funny if it wasn't for all the artist who have the misfortune to be shackled to a major liability label.

Reuters reports...

Universal are testing of a new pricing structure designed to sell most new CD releases at $10 or less at retail [bringing] CD prices more in line with what consumers pay for digital albums at online retailers like iTunes and Amazon.


"We think it will really bring new life into the physical format," Jim Urie Chairman/CEO Universal Music Group Distribution says.

Lost. For. Words.

The plan is to reduce UMG's cut to $7.50 or less & put suggested retail prices on CDs, ranging from $6 to $10. This will cut Universal's profit by about $2.50 per CD.

UMG is betting that it can offset the loss in revenue per CD with increased sales volume

(fat chance)

and the rollout of greater numbers of higher-priced, higher-margin deluxe editions of albums.

Maybe, but not enough to claw back what they're giving away.

Rueters suspects that UMG will try to reduce CD costs, like less elaborate packaging on standard single CD releases 


Removing one of the reasons people choose physical over digital? Won't that drive more people to iTunes?

or placing fewer songs on albums in order to reduce mechanical royalty payments to songwriters.

Fewer songs? Less royalties? AKA stiffing the public & stiffing the artists.
Business as usual.

Read the whole thing



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