Universal slashes CD prices to $12.98...still too high?
Universal, which may soon be known as NBC Universal, has announced price cuts in new CD prices in an effort to lure back the music-buying public that has stopped spending its dollars at the music store. According to this New York Times story (registration required):
Under the new pricing scheme, Universal would lower its wholesale price on a CD to $9.09 from $12.02. The company said it expected retail stores to lower CD prices to $12.98, from the $16.98 to $18.98 they now charge, and perhaps to as low as $10. When CD's first arrived on the market they cost $15.98, and have climbed from there.
..."This is a step toward realizing the reality of what business conditions are today," said Hal Vogel, author of "Entertainment Industry Economics"(Cambridge University Press, 1998). Mr. Vogel said that some estimates indicate that the record industry's revenues worldwide had declined to $30 billion from $40 billion a year in the late 1990's. "The cuts are going to put a squeeze on profit margins but it will allow them to start building a relationship with the public again," he said.