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CDs or DVDs: 2 for $25

Posted By Barry Ritholtz On March 30, 2004 @ 6:45 am In Film,Finance,Music | Comments Disabled

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Altitunes [1] is a Music retailer located almost exclusively in airports. Not exactly the most competitve of retail spaces — captive audience and all that.

The one non-airport location is Grand Central Station — right across from my office. I walk by it a few times aweek. Their latest promotion is 2 CDs or DVDs for $25.

This may not be the best pure sale prices — Target regularly runs $7.99 CD and $9.99 DVD sales, and this week, Best Buy is advertising a “3 DVDs for $20 sale [2].”

But it points out an interesting conundrum facing the music industry: The competitve pressures they have been facing from the Film industry are actually increasing.

If DVDs — with 2+ hours audio/video, plus many extra features, interviews, fan items — can be sold at the price point of 3 for $20, then why can’t CDs? Even if the BestBuy promotion is a loss leader (I’m not sure it is) — there is something unequivocally broken about the CD pricing model.

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URL to article: http://www.ritholtz.com/blog/2004/03/cds-or-dvds-2-for-25/

URLs in this post:

[1] Altitunes: http://www.altitunes.com/

[2] 3 DVDs for $20 sale: http://www.bestbuy.com/site/olspage.jsp?id=pcmcat27200050017&type=category

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