The recording industry continues to attribute slumping music sales to online piracy, but Universal Music Group (UMG) has recently announced an initiative to spur consumers to spend more money in record stores. The commercial music giant is taking a novel approach: It’s dropping the price of CDs.
UMG whose artists include top draws like Ashanti, blink-182, Elton John, Sting, Shania Twain and U2 — is instituting a US$12.98 suggested retail price (SRP) on all of its top-line CDs sold in the United States. The price cuts will apply to previously premium-priced backcatalog offerings as well.
In doing so, UMG may be taking its some of its cues from Apple’s own iTunes Music Store, which has had great success selling individual tracks for $0.99 and entire albums for $9.99.
In explaining his company’s strategy, UMG Chairman and CEO Doug Morris explained that UMG is responsible for almost 30 percent of all album sales in the United States. “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,” he said.
UMG is one of several major recording companies that licenses its music for distribution through the iTunes Music Store, including many of the same artists whose CDs will now be available in record stores for less money. UMG has entered into partnerships with other commercial online music services as well.
UMG is reducing the wholesale price of its CDs to retailers, and the company anticipates the new retail prices will be passed along to consumers by the start of October. What’s more, the company is also going straight to consumers with the message through a new advertising campaign.
The move will effectively eliminate $16.98, $17.98 and $18.98 SRPs, according to the company. UMG is also dropping the wholesale price on cassettes to $8.98 as well.