Universal Music Group (UMG), one of the “Big 4″ record labels has announced its latest ploy to increase physical CD sales in the U.S., slashing prices of new releases to under $10.
Dubbing the pricing program “Velocity,” UMG hopes that consumers will go out and buy CDs, which will still retail for higher prices than the comparable songs digitally, but with a closer gap.
“We think it will really bring new life into the physical format,” adds Universal Music Group Distribution chairman/CEO Jim Urie.
Wholesales prices for new releases have now been dropped to an average of $7.50 from $10.35, and MSRPs for retail prices are dropped to between $6 and $10.
UMG is hoping that the big hit taken to revenue can be made up with an increase in sales volume. Overall CD sales are already down 15 percent year-on-year, with bigger drops expected.
Velocity is set for a Q2 launch and should last through the holiday season.
Result for: sales volume
The British Video Association has said today that despite a few recent good sellers such as Quantum of Solace, DVD revenue had fallen 14 percent with total sales volume falling 7.7 percent.
If the trend continues, the BVA says the UK will have its worst year for home video revenue since the 1980s.
Lavinia Carey, spokesperson for the BVA, adds that the high revenue drop can mainly be attributed to the recent bankruptcies of retailers Woolworths and Zavvi. “We’ve just seen 15 per cent of the retail market disappear,” says Carey, via Times Online.
Blu-ray was a bright spot in an otherwise dreary report, seeing a 231 percent increase in units sold. The BVA does add however that Blu-ray still only accounts for 3.1 million units sold, compared to 99.6 million for DVD (during the period).
Result for: sales volume
According to the daily Japanese Nikkei paper, it appears Pioneer is on the verge of completely exiting the TV market.
Back in March the company said it would halt Plasma production to focus on LCD production. “We have judged that maintaining the cost competitiveness of plasma display panels, or PDPs, at projected sales volumes will be difficult going forward,” Pioneer said at the time.
Despite the great commercial success of its Kuro plasma line, the company has been losing money for a few quarters now on TV sales. If the report holds true, then Pioneer will cut their losses and move completely out of the market, instead joining forces with Sharp to make a stronger move into the DVD and Blu-ray standalone business.
Pioneer declined comment on the report but did note that they have been “actively evaluating” the company’s TV business since at least last March when it decided to cut out PDP production.
