Music industry begins to crack on pricing

In good news for the consumer and probably equally good, if not better, news for the music industry, Universal Music is starting to combat the falling sales of music by cutting prices. According to an article from the Associated Press (via Tampa Bay Online), Universal is cutting wholesale prices by almost $3 in an attempt to lower retail pricing to around $10.

This, in combination with the recently reported (Wired) dramatic increase in CD singles sales from 2.2M units in the first six months of 2002 vs. 5.8M units in the first six months of 2003, may be a sign that the record industry is starting to bow to pressure from the consumer.

There is a lot of debate going on right now on the meaning of all of these moves and statistics, with the music industry attempting to hold their ground that decrease in music sales has nothing to do with:

  • Poor product quality
  • Reduced number of new acts being produced
  • Reduced number of new albums being produced
  • Customer demand for more value per buck (cheaper CDs and per-song purchases)

However, the move to online distribution is clearly only one part of the picture for the music industry.