[IP] Universal to lower CD prices

[Dave Farber <dave@farber.net>]

Date: Wed, 03 Sep 2003 17:40:25 -0700
From: "Wong, Brian" <brianwong@dwt.com>
Subject: Universal to lower CD prices
To: "David J. Farber (dave@farber.net)" <dave@farber.net>

Dave, as many have noted and as I believe, the music industry must 
eventually lower prices to maximize revenues, although the question of when 
has remained.  Here is one answer.

- Brian -

Music giant plans to drop CD prices

By 
<mailto:paulf@cnet.com?subject=FEEDBACK:Music%20giant%20plans%20to%20drop%20CD%20prices>Paul 
Festa
Staff Writer, CNET News.com
September 3, 2003, 5:20 PM PT

The day after a report suggested the compact disc is heading the way of the 
8-track tape, the world's largest music label conglomerate promised a steep 
cut in music CD pricing.

Universal Music Group on Wednesday said it will slash its wholesale prices 
and lower its suggested retail pricing for music CDs to $13, from between 
$17 and $19. The company, a subsidiary of Vivendi Universal, is home to a 
number of record labels, including Decca, Deutsche Grammophon, Interscope 
Geffen A&M Records, Island Def Jam Music Group, and Philips.

"Music fans will benefit from the price reductions we are announcing 
today," Jim Urie, president of Universal Music & Video Distribution, said 
in a statement. "Our new pricing model will enable U.S. retailers to offer 
music at a much more appealing price point in comparison to other 
entertainment products. We are confident this pricing approach will drive 
music fans back into retail stores."

The cuts follow the publication Tuesday of a report by Forrester Research 
predicting that the market for 
<http://news.com.com/2100-1027-5070177.html?tag=nl>CDs will succumb to 
consumers' increasing preference for downloading music--both legally and 
otherwise. CD sales peaked in 1999, and will tumble by nearly one third by 
2008, Forrester researchers wrote.

Consumers should see reduced CD prices as early as October 1, according to 
UMG.
On Wednesday, the company also pledged to launch a new advertising campaign 
and to make price cuts on cassettes. "Top line" cassette tape releases will 
cost $9, under the new pricing model.

<http://news.com.com/2100-1027_3-5071138.html?tag=lh>http://news.com.com/2100-1027_3-5071138.html?tag=lh 


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