In an effort to get consumers back in music stores, Universal Music Group announced a cut in their CD prices.
UMG plans on reducing wholesale prices on their products and implementing a $12.98 Manufactured Suggested Retail Price.
Chairman and CEO of UMG Doug Morris said in a recent press release that UMG is uniquely positioned to try this strategy because they are responsible for almost 30 percent of album sales in the U.S.
“Our new pricing policy will allow us to take the initiative in making music the best entertainment value and most compelling option for consumers,” Morris said in the press release.
UMG consists of record labels such as Interscope, Geffen A&M, Island Def Jam Music Group, Mercury Records and MCA Nashville.
Their roster includes artists such as Eminem, Nelly, 50 Cent, No Doubt, Blink-182, U2, Reba McEntire and Shania Twain.
The price cut also will affect UMG’s history catalog, which includes artists such as Eric Clapton, Nirvana, Bob Marley, Jimi Hendrix, The Who and the entire Motown catalog.
UMG’s current wholesale price for a CD is $12.02 with the MSRP at $18.98.
The new policy would make the wholesale price for a CD $9.09.
According to a recent Associated Press article, UMG hopes its CDs will carry a retail price around $10 or less.
This price would be comparable to the $9.99 retail price music listeners enjoyed throughout the early 1990s.
Jim Urie, president of Universal Music & Video Distribution said in a press release the fans will benefit the most from the new pricing plan.
“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,” Urie said in the press release. “We are confident this pricing approach will drive music fans back into retail stores.”
Some LSU students agree with Urie.
“The reason people stopped buying them [CDs] was they raised prices so much,” said Brandon Suarez, a computer and electrical engineering freshman. “If they were a reasonable price, then more people would buy them.”
Tommy Hughes, an ISDS senior, said lowering prices was something that eventually had to happen.
“CDs aren’t worth what the old prices were anyways,” Hughes said. “It costs a couple cents to make a CD, and they’re selling it between $15 and $20.”
Maggie Homer, a kinesiology sophomore, believes the lower prices are better and the move might stop people from downloading music.
“I think it is better to buy CDs,” Homer said, “but it is so expensive that it’s impractical.”
Other students like Homer said they would buy more CDs with the lower prices.
Brittany Hudgins, an undecided freshman, said that she downloads music often.
“I’d buy CDs if I could buy them for $12,” said. “Why pay $20 when I can pay $12?”
Kami Savoie, a chemistry freshman, said she never downloaded from the Internet.
“I always bought CDs,” Savoie said. “Now that they’ll be lower, I probably will buy even more CDs.”
Savoie also said she believes other record companies will follow UMG’s lead and lower their prices.
“I think they’ll have to [lower prices] in order to keep selling their CDs,” Savoie said. “It’s the whole competitiveness of it all.”
The price changes will go into effect Oct. 1.
Morris said in a press release, “We strongly believe that when the prices are dramatically reduced on so many titles, we will drive consumers back to stores and significantly bolster music sales.”