Wal-Mart Considers CD Price Cuts

Posted:
in iPod + iTunes + AppleTV edited January 2014
Quote:

Wal-Mart mulls over CD price cuts



As demand for CDs drops, retailers are looking into slashing prices in order to drive sales, and Wal-Mart is no exception. According to Billboard, the company has proposed a new pricing program which would range from $5 for budget CDs to $12 for popular titles. In addition, under Wal-Mart's reported new plan, more of the cost burdens would be placed on the record labels.



Wal-Mart's plan hinges on whether or not the major labels agree to abide by it. Reports indicate that if they don't, this could lead to a major reduction of the retailer's music segment. However, this is unlikely in the near future.



Wal-Mart's possible lower-priced CD plan is reflective of the growing popularity of digital music. As evident in a recent study by The NPD Group, legal music downloads now account for 10% of all music sales, and iTunes finished just behind Wal-Mart in 2007 (taking into account both digital and CD music sales). If Wal-Mart fails to get a handle on its music segment, it may lose its place at the top.



From a report on Wal-Mart from "Retailing Today"...



Looks like iTunes is even having an adverse effect on the biggest retailer in the world.

Comments

  • Reply 1 of 5
    iposteriposter Posts: 1,560member
    CD is a dying distribution medium, the studios just haven't caught on yet.



    Why pay for all 12 songs on a CD, if you only like two of them, and can get them through iTunes/Zune/pay MP3s, etc??



    It may be only 10% now (legal downloads, mind; count illegal and I'm sure it's 50% or more), but the coming generation is even more tech savvy than Gen Y or X.



    FWIW, I don't know any of the younger students at my college who still buy CDs...
  • Reply 2 of 5
    SpamSandwichSpamSandwich Posts: 31,395member
    Quote:
    Originally Posted by iPoster View Post


    CD is a dying distribution medium, the studios just haven't caught on yet.



    Why pay for all 12 songs on a CD, if you only like two of them, and can get them through iTunes/Zune/pay MP3s, etc??



    It may be only 10% now (legal downloads, mind; count illegal and I'm sure it's 50% or more), but the coming generation is even more tech savvy than Gen Y or X.



    FWIW, I don't know any of the younger students at my college who still buy CDs...



    Speaking for myself, I haven't bought a single CD in years. But my last song purchase was through iTunes.
  • Reply 3 of 5
    galleygalley Posts: 971member
    I buy 10-12 CDs per month, at an average price of $7.50 per disc. You just gotta know where to look.
  • Reply 4 of 5
    areseearesee Posts: 776member
    Have you walked through the CD racks in a Wal-Mart recently? Is there anything there worth listening to let alone buying? Didn't think so.
  • Reply 5 of 5
    It's easy to forget that Wal-Mart is the only "music store" for millions of Americans in small towns and rural areas. Anyone on the board is savvy enough to buy all their music online, but there's still a huge market of folks, rural, over 40, who are looking for the George Strait greatest hits to play in the truck or maybe other country music. And you have to HAVE a computer and WANT to use it to buy music, there's still money to be made from those folks.



    I would expect Wal-Mart's product mix to shift, probably getting grayer and grayer, but not disappearing anytime soon. Especially at $5 a disc.
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