Wal-Mart Considers CD Price Cuts
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.
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
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...
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.
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.