Universal Cuts Prices to Sell Music
By George Anderson
The Universal Music Group, the world’s largest record company, announced yesterday it was cutting prices on its library of compact discs by up to 30 percent in the hopes it would
convince consumers to buy more CD’s.
According to The New York Times, the company took this action “in an aggressive attempt to lure consumers back into record stores.” The recording industry has been hurt by a
drop in sales to music pirates and file-swappers on the Internet.
Doug Morris, chairman of Universal told the Times, “We are in the middle of a terrible situation where our music is being stolen. We need to invigorate the market, and
as an industry leader we felt we had to be bold and make a move.”
Moderator’s Comment: Will music consumers respond favorably to Universal’s price cut?
Our advice to Universal is to look to the Apple Music Store where consumers can choose to buy all the songs on a recording or only those they like.
Apple, in essence, has revived the singles/45’s market and brought it into the digital age. Even at $12 and change, many consumers will take a pass on buying
a CD. If they can spend $10 or less and get only the songs they want, then consumers may be more willing to plunk down their hard-earned dollars (or their parent’s) on recorded
music. [George
Anderson – Moderator]