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

March 18, 2010 12:06 PM ET

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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Despite Some Big Rock Records, Music Biz Still Struggling
October CD Sales Down As Economy Struggles With Recession
Music Sales Slump Could Spell the End of Boxed Sets

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Song Stories

“Whoomp! (There It Is)”

Tag Team | 1993

Cecil Glenn — a.k.a., "D.C." — was a cook at Magic City, a nude dance club in Atlanta, when he first heard women shout "Whoomp — there it is!" Inspired by the party chant, he and partner Steve "Roll'n" Gibson wrote a song around it. Undaunted by label rejections, they borrowed $2,500 from Glenn's parents and pressed 800 singles, which quickly sold out in the Atlanta area. A record deal came soon after. Glenn said the song was meant for positive partying. "If you're going to say 'Whoomp there it is,' and you're doing something negative, we'd rather it not have come out of your mouth."

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