Monday, March 22, 2010

CD's to make a comeback?


Well, thats what Universal is striving for at least. To combat declining CD sales due to people downloading music online, Universal has decided to lower CD prices. Their pricing program, called "Velocity", aims to sell most new releases by current artists at $10 or less, bringing prices close to what customers pay for music online. Universal is hoping that an increase in sales will offset revenue lost due to lower prices. As far as retailers are concerned, many were already pricing CD's at around $10 and absorbing the loss to bring more customers in. However, they will be looking at a decreased profit margin of 25% down from 35%. Universal is the first to cut their prices in an effort to boost CD sales, but I don't think it will be long before others follow their lead. CD sales are down 15.4% in the US since 2009 alone. With this rapid decline, something had to be done to save the dying CD industry, even if its only temporarily.

CD's to make a comeback?

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