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Music Retailers Competing on Price

Posted By Barry Ritholtz On January 6, 2004 @ 7:33 am In Finance,Music | Comments Disabled

We previously discussed how “Music Sales were Rising on Aggressive Discounting, Price Competition and an Improving Economy [1].” We’re pleased to note that the circulars from the Sunday papers show that price competition for CDs are continuing after the holiday season.

Now that the music cartel’s illegal “Minimum Advertised Price” fixing scheme [2] has been thwarted, retailers are free to do what they do best: Compete on price.

target.jpg [3]

Target has a “Mix & Match” sale: from a select list of new CDs and older DVDs, any combination are 2 for $20. New releases from Alicia Keys (Diary of Alicia Keys), Toby Keith (Shock’n Y’all), Josh Groban (Closer), Beyonce (Dangerously in Love), Linkin Park (Meteora), and No Doubt (The Singles 1992-2003) are all $10 at Target. Note that Target’s prices online are not the same as their store sale prices — perhaps due to their strategic relationship with Amazon.com.

best_buy.jpg [4]

Best Buy has their sale running also: new release from Big Tymers (Big Money Heavyweights [5], Sheryl Crow (Greatest Hits [6]), Britney Spears (In The Zone [7]), Counting Crows (Films About Ghosts: The Best Of… [8]), Bubba Sparxx (Deliverance [9]), Blink 182 (Blink 182 [10]) and Hoobastank (Reason [11]) are all $9.99. All these are available at BestBuy.com, and with free shipping. They also advertise “1000s of CDs for $9.99 or less, but from the advert we cannot tell if these are new releases or budget line discs.

Ain’t competition grand?

This continues to demonstrate the silliness of the RIAA litigation strategy [12]. If the marketplace is allowed to freely function, competition would drive prices down and unit sales up. Artificial price supports are what was killing sales, and not the advertising that is file sharing . . .


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/01/music-retailers-competing-on-price/

URLs in this post:

[1] Music Sales were Rising on Aggressive Discounting, Price Competition and an Improving Economy: http://bigpicture.typepad.com/comments/2003/12/music_sales_ris.html

[2] Minimum Advertised Price” fixing scheme: http://www.ftc.gov/os/2000/05/mapanalysis.htm

[3] Image: http://www.target.com/gp/browse.html/ref=sc_fe_c_3_0/602-5339045-7779868?%5Fencoding=UTF8&node=301668

[4] Image: http://www.bestbuy.com/site/olspage.jsp?id=cat02001&type=category

[5] Big Money Heavyweights: http://www.bestbuy.com/site/olspage.jsp?id=1342582&skuId=6028185&type=product

[6] Greatest Hits: http://www.bestbuy.com/site/olspage.jsp?id=1336636&skuId=6068391&type=product

[7] In The Zone: http://www.bestbuy.com/site/olspage.jsp?id=1337610&skuId=6103922&type=product

[8] Films About Ghosts: The Best Of…: http://www.bestbuy.com/site/olspage.jsp?id=1340649&skuId=6153191&type=product

[9] Deliverance: http://www.bestbuy.com/site/olspage.jsp?id=1328866&skuId=5886259&type=product

[10] Blink 182: http://www.bestbuy.com/site/olspage.jsp?id=1339283&skuId=5998897&tab=2&type=product&productCategoryId=

[11] Reason: http://www.bestbuy.com/site/olspage.jsp?id=1342394&skuId=6150434&type=product

[12] RIAA litigation strategy: http://www.arstechnica.com/archive/news/1065934536.html

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