The music industry, led by the RIAA, has been bitching and moaning for years about lower sales of CDs, blaming the situation on all those evil kids downloading music from the web (I don’t count – I’m not a kid :-). Not once did they think that maybe most of their products aren’t all that good and are way overpriced. Amazingly enough, the largest music company, Universal Music, has now acknowledged the later point and has announced that they will drop their prices.
Look closer, however, and the price drop isn’t as big as it seems. The news organizations have been trumpeting a $6 price drop, taking this list price from $18.98 to $12.98. The more important number, however, is that the wholesale cost only drops $3, except for new releases by the top selling performers where the decrease is only $2. Since many places discount the price of CDs by at least a small amount, don’t look for any massive price reductions any time soon. At least it’s a start.
What the music labels and most of the musicians don’t get is that people don’t want to pay even $10, $12 or more for a CD if it only has one or two good songs on it. The iTunes Music Store has been a huge hit despite the small potential audience because you can pick out what you like and leave the rest behind. The bottom line to all this is that the giant recording companies are going to have to do much more than shave a few dollars off a CD to convince people to buy whole albums again.