Universal Announces Plan to Lower CD Prices to $10 or Less

Sales of physical albums have steadily decreased over the past half decade, and now one major label is hoping to stem the decline by adopting a daring new strategy: lowering the price of CDs. Universal Music Group has revealed a plan to reduce the wholesale cost of their albums in order to decrease the retail price of single-disc albums to $10 or less, Billboard.biz reports. Under the new plan, sales of CDs will only boast a 25 percent profit margin, but UMG hopes the increase of CD sales volume will help reinvigorate their revenues.

While some may deem UMG's strategy as "too little, too late," the move does put the price of physical discs in line with what digital music services like iTunes charge for full album downloads, making physical discs a more attractive option. "We think it will really bring new life into the physical format," Universal Music Group Distribution president/CEO Jim Urie said. UMG revealed that they plan on selling more deluxe editions of albums, however those discs will carry a higher price tag.

While retailers are applauding the move, Billboard.biz writes that the other major labels aren't too pleased with UMG's price shift. "Why does Universal feel the need to get below $10?," a distributor at a competing major wondered. However, there is precedent for UMG believing their new strategy will work: When Trans World Entertainment, who runs music stores like f.y.e. and Wherehouse Music, tested out a $9.99 price plan, CD sales jumped 100 percent.

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Song Stories

“Smells Like Teen Spirit”

Nirvana | 1991

"Smells Like Teen Spirit," named after a brand of deodorant marketed to girls, was Kurt Cobain's attempt to "write the ultimate pop song," he said, using the soft-loud dynamic of his favorite band, the Pixies. Cobain "had that dichotomy of punk rage and alienation," the song’s producer, Butch Vig, told Rolling Stone, "but also this vulnerable pop sensibility. In 'Teen Spirit,' a lot of that vulnerability is in the tone of his voice." Sadly, by the time of Nirvana's last U.S. tour, in late '93, Cobain was tortured by the obligation to play "Teen Spirit" every night. "There are many other songs that I have written that are as good, if not better," he claimed.

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