BMG Cuts CD Prices But Can Cheaper Compete With Free?
From MusicBiz: “This is called striking while the iron is hot. While the industry is enjoying a 7.5% sales increase over last year, inside sources tell MusicBiz that BMG wants to keep the consumers in a buying mood – by cutting prices. A new pricing program is being readied that would give a 15% discount on initial shipments of product by mid-level acts (those that basically do anywhere from 100,000 to 500,000 units). The discount will bring the wholesale price of select artists down to $10.23, with an extra buy-in discount of 5% for the first few weeks of release. BMG’s effort follows the Universal Music Group’s highly-publicized effort last fall, which never took off. UMG has since refined its discount deal, the results of which, while more promising, have yet to be fully ascertained.”
hypebot: When will labels learn to do market research before they try these silly schemes? BMG’s pricing is still too high to get people to experiment with new artists or to compete with free downlads. Not unless wholesale pricing allows for a $10 or less retail price for a disc that also includes videos, bios, lyrics and many of the extras that we’ve come to expect when buying DVDs will consumers pull cash out of their wallets for a new band who they might have heard on the radio a couple of times.