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More on Music/CD Competition

Posted By Barry Ritholtz On March 2, 2004 @ 5:39 pm In Film,Finance,Music | Comments Disabled

Has the Music industry found religon when it comes to allowing the free market to set pricing? And if (a big if) they have, is it already too late?

The answer is to both questions is not quite, but close. Best Buy [1] and Target [2] are each running aggressive sales this week — but only on select product:

At Best Buy, some CDs are on sale for $7.99 (Mae – Destination Beautiful; Yellowcard – Ocean Avenue; Fall Out Boy – Take This To Your Grave), $8.99 (En Vogue -Soul Flower; LostProphets – Start Something; Dashboard Confessional – A Mark, A Mission) and $9.99 (Sting – Sacred Love; Kanye West – College Dropout; Clint Black – Spend My Time). There’s even a release at $5.99 (The Get Up Kids – The Guilt Show). Order on line from Best Buy and shipping is free.

At Target, the price points start at $6.98 (The Polyphonic Spree – Beginning Stages; Rooney – self titled; Something Corporate – North; Josh Kelley – For the Ride Home; and Fete Dobson – self titled). At $7.98 is Katy Rose – Because I Can, at $8.98 is the self titled Phantom Planet. For $9.98, you can pick up Switchfoot – The Beautiful Let Down; The Darkness – Permission to Land, and Clint Black – Spend My Time.

The promotional prices seem to be a management compromise: Instead of letting the prices of all CDs float as per market forces, they are discounting very select merchandise, while maintaining prices on al l the rest. I have no idea who chooses which CD gets selected for what price (or how). If anyone can tell me, by all means please do.

I noticed the “A” list CDs — Norah Jones, Sting, Clint Black — don’t really get below $10. Last week, I ordered the Norah Jones CD on line from Best Buy for $9.99 (free shipping); I see its now at $13.99 there. Guess I better order Sting‘s Sacred Love CD for $9.99 (free shipping) beofre that goes up also.

While this is a promising start, consider the competition CDs are up against: DVDs [3].

From the same Target circular, any of the following are 2 for $15:

Moulin Rouge
• Van Wilder
• Reservoir Dogs
• Legally Blonde
• Castaway
• Wedding Planner
• When Harry Met Sally

Compare what you get for your entertainment dollar [3] between CDs and DVDs, and you get a better sense of the corner the music industry has painted itself into . . .

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

URL to article: http://www.ritholtz.com/blog/2004/03/more-on-musiccd-competition/

URLs in this post:

[1] Best Buy: http://www.bestbuy.com/site/olspage.jsp?id=cat02001&type=category

[2] Target: http://www.target.com/gp/browse.html/ref=sc_fe_c_3_0/602 0424458-1011061?%5Fencoding=UTF8&node=301668

[3] DVDs: http://bigpicture.typepad.com/comments/2004/03/cd_no_dvd.html

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