Just about a year ago, we discussed the music industry’s intent to “decommoditize their products." The problem with that strategy is that their products are essentially commodities, and should therefore become vulnerable to low cost retailers. That process has actually begun sometime ago, with Wal-Mart and Target responsible for an ever growing percentage of CD sales.
But the industry’s reluctance to actually compete for sales on anything but price — to refuse to recognize they merely sell a commodity product — has dampened overall sales. (Basic economics tells us that lower prices = higher sales).
Since then, I’ve become convinced that the lack of competitive pricing — both within music, as well as vis-a-vis other forms of entertainment — has been in large part responsible for the declining CD sales. The price fixing scandal gets some credit for this — though the roots of the problem go much, much deeper than that. The RIAA can blame P2P all they want, but the smart money knows there’s more to this story than meets the eye.
So it was with great interest that I read of a new tack the industry is now trying: Offering both “stripped-down or fully loaded” CDs:
“While the major record companies continue to discount new releases or even slash prices to try to counter file-sharing and widespread CD burning, some music executives are quietly trying to expand the top end of the market. The average retail price of an album slid 4 percent in the third quarter to $12.95 – a new low, according to NPD Group, a research company. Yet some labels are pushing tricked-out versions of big titles that carry their highest prices ever.
There’s a basic business logic behind the move to test the upper limit, executives say. If labels must cut prices and sacrifice profits on the mass market, they must try to cover the difference by targeting niches of hard core fans who are willing to shoulder higher prices for their favorite acts. “
This makes sense, given a study by the Handleman Company. They discoverd that less than 1/4 of all music buyers are responsible for 62 percent of album sales, buying a CD per month.
To appeal to these hardcores, Labels have begun putting out “Deluxe” editions of CDs:
• Green Day’s "American Idiot" can be had for $10 for a "POD" (plain old CD) — or for 150% more ($25), you get the premuim package, including a 52-page hardcover book.
• For $24, Metallica’s "Some Kind of Monster" includes a band t-shirt.
• Eminem’s Encore album will set you back $27, but you get 25 glossy photos plus bonus Internet access to Eminem cellphone ringtones.
• U2′s "How to Dismantle an Atomic Bomb" will cost you $10 (or less) for the disc, or $32 for the "collector’s edition" including DVD and 50-page hardcover book (Priced inbetween is a CD/DVD w/o book.)
We previously discussed the dual disc DVD/CD phenomenon. Tomorrow, we’ll take a look at how the CD side of the industry may not realize it yet, but they are in the process of morphing into the DVD industry . . .
$10 for a Plain CD or $32 With the Extras
NYT, December 27, 2004
It’s year’s end, and that means list time.
Most of the listed items are nanoseconds old. And while that’s de rigueur for someone who does that professionally, it has little correlation to the lives the rest of us lead. Gotta job, family, obligations? Then you probably don’t get to listen to hundreds of new releases each year. Good luck then, making an intelligent top 10 list.
Movies? The days of waiting on line opening night are long since gone for this old man. A majority of the films I ended up renting, buying or pay-per-viewing this year were not 2004 releases. Wanna make a helpful list for me? Tell me the best stuff on HBO next weekend; Knowing 2004′s most critically acclaimed Eastern European documentaries is of little use for most people.
OK, rant over. Here’s a different kind of top 10 list; these favorite CDs are what actually got listened to in 2004. While a few of these came out this year, that wasn’t a requirement. These are what actually spent the most time this year on the iPod or in the CD player of a person with a job and an ever decreasing amount of spare time.
The task was made infinitely easier by iTunes, which shows me the chronological order of when CDs were ripped, and purchases made via ITMS, or downloads via a P2P service, as well as the number of plays each song got. Incidentally, the correlation between my downloaded P2P tunes and subsequent CD purchases is extremely high; I’ll bet others have had similar experiences. Don’t expect an RIAA study looking into that phenomenon anytime soon . . .
Anyway, on to the top 10 list:.
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Roman Candle’s debut is a joyful assortment of finely crafted pop
tunes. If FM Radio didn’t suck, this is the sort of music you would be
hearing on it right now. Finely crafted lyrics mated to delightful
melodies delivered by a tight power pop five-some in a surprisingly
slick production. Like nearly all the discs on this list, this one is
really good from start to finish.
Why didn’t you ever hear of these guys? Roman Candle hails from Chapel Hill, North Carolina, and signed with an independent label. No payola, no Clearchannel — and no radio play.
Roman Candle Says Pop
Bonus: I discovered Roman Candle through BBC 2’s Bob Harris Check him out.
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