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

“Youth Knows No Pain”

Lykke Li | 2011

“Like on 'Youth Knows No Pain' — we are the ones that should demonstrate, because we can take it,” Likke Li said. “We can pierce ourselves, take Ecstasy, dance all night and still go to work at our McDonald's jobs.” Despite the hedonistic sentiment in the song, the Swedish singer also admitted in hindsight her youth had repercussions. “I remember when I was 18-19 and feeling that I know it all,” Li said. “I always feel that I know it all. But that song is about realizing you don’t, and reflecting, ‘Boy, if I only knew what would follow.’”

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