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Wal-Mart's 5-tier CD pricing proposal ($10 for all top hits)

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Wal-Mart's 5-tier CD pricing proposal ($10 for all top hits)

Old 03-18-08, 02:06 AM
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Wal-Mart's 5-tier CD pricing proposal ($10 for all top hits)

Wal-Mart is pushing for a five-tier CD pricing structure with the top 15 to 20 best sellers being at $10, other popular titles at $12, and catalog titles at $9, $7, and $5. The record companies are currently resisting, but keep in mind that their CD sales are in a downward spiral and Wal-Mart is the largest seller of CDs with a 22% market share.

Lower CD sales is hurting Wal-Mart too, it is apparently getting to the point where they would rather use the space where CDs are stocked for something else, or at least part of it. Unless they can increase CD sales, thus the 5-tier strategy. And if Wal-Mart gets this, the record companies will have to offer the same pricing schedule for others as well.

Per a Sound Opinions podcast I was listening to (rock reviewers from the two Chicago newspapers), when you buy a CD only a dollar or less goes to the artist ($1 being for the top bands), $1.50 to $2.00 to the retailer, and the remainder to the record company – the proposal to reduce the prices would basically come straight out of the record company’s pockets so of course they aren’t happy.

Anyway, if you can't tell I'm all for this - I think it's crazy that some CDs are offered at $14 or $15 for new releases. Guess what, I don't buy CDs at that price.

Wal-Mart stirs CD pricing pot with multi-tiered plan

NEW YORK (Billboard) - The major music companies have been resistant to lowering their price on CDs, but now they may be dragged to that point: Wal-Mart, the largest retailer of music with an estimated 22 percent market share, has proposed a five-tiered pricing scheme that would allow the discounter to sell albums at even lower prices and require the labels to bear more of the costs.

According to sources, the Wal-Mart proposal would allow for a promotional program that could comprise the top 15 to 20 hottest titles, each at $10. The rest of the pricing structure, according to several music executives who spoke with Billboard, would have hits and current titles retailing for $12, top catalog at $9, midline catalog at $7 and budget product at $5. The move would also shift the store's pricing from its $9.88 and $13.88 model to rounder sales prices.
http://news.yahoo.com/s/nm/20080302/media_nm/walmart_dc
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Old 03-18-08, 03:07 AM
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sounds like a good idea. I never understood why cd catalog prices don't come down the way DVD's do. If a movie that was popular five years ago can now be found for $5, why shouldn't the same happen with a CD? Catalog sales would see a raise as well. Once a cd has sold all it's going to sell at one price, either you drop the price or it'll stop selling, the labels just don't seem to do that tho, and then wonder why albums from 10 years ago that still retail for the same price it retailed for ten years ago don't sell anymore.
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Old 03-18-08, 04:55 AM
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I'd buy more cds if they were more reasonably priced so this works out well for me.
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Old 03-18-08, 07:54 AM
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I likes it.
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Old 03-18-08, 07:59 AM
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Originally Posted by nothingfails
sounds like a good idea. I never understood why cd catalog prices don't come down the way DVD's do. If a movie that was popular five years ago can now be found for $5, why shouldn't the same happen with a CD? Catalog sales would see a raise as well. Once a cd has sold all it's going to sell at one price, either you drop the price or it'll stop selling, the labels just don't seem to do that tho, and then wonder why albums from 10 years ago that still retail for the same price it retailed for ten years ago don't sell anymore.
Yup

There's plenty of CDs from the 80s-90s I'd still pick up, including re-buying some that got stolen years ago, but I'm not paying $10 for them. Normally I scrape them up used. Or these days, I really don't buy music at all.
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Old 03-18-08, 08:15 AM
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I just bought a cd from Bestbuy yesterday. It was $12.99 and I used a $3 coupon I had from some chex snack pack I bought. I really prefer buying cds as I've learned the hardway that anything off iTunes is gone if the hard drive dies and no backup (plus all other sorts of copy protection). For me my limit is around $10-11 for a cd.
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Old 03-18-08, 08:30 AM
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I am still a fan of buying actual cds as well, but I always wait until a good price comes or trade for them/buy them used.
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Old 03-18-08, 08:58 AM
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I read a recent article in the LA Times that most teenages did not buy a single cd in the past year. Thinking back to my teen years, that's pretty stunning. No wonder the industry is suffering.
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Old 03-18-08, 09:04 AM
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This is something I would like to see, and Wal-Mart could make it happen quicker than anyone else. Sure the studios wont get fat, but some money is better than none.
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Old 03-18-08, 09:22 AM
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Wal-Mart has proposed what I think is a great idea.
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Old 03-18-08, 10:15 AM
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They proposed this years ago and it never happened.
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Old 03-18-08, 10:20 AM
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Originally Posted by The Bus
They proposed this years ago and it never happened.
The market's changed a bit since then, I bet.
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Old 03-18-08, 10:43 AM
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Originally Posted by Decker
I read a recent article in the LA Times that most teenages did not buy a single cd in the past year. Thinking back to my teen years, that's pretty stunning. No wonder the industry is suffering.
This is probably self-evident, but this is why the Billboard charts are completely meaningless these days. Seemingly, only 10 year old girls and Boomers buy CDs these days.
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Old 03-18-08, 10:57 AM
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Good idea.. and I'll never give up on buying cds until they're gone. One the other hand, I sure hope Wal-Mart would increase their selection, since they've got next-to-none that I've ever seen.
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Old 03-18-08, 11:01 AM
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Yep, Walmart has shitty selection. I think I've bought maybe 2 cds there ever. but more power to them on this.
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Old 03-18-08, 11:30 AM
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I would certainly buy more CDs... I think I have bought 10 CDs in the last 5 years.
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Old 03-18-08, 11:43 AM
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Does WM still only carry "clean" versions of CDs? I got burned a couple of years ago by that shit and haven't bought a CD from them since.
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Old 03-18-08, 12:22 PM
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I still buy plenty of CDs. I'm part of the dying breed that likes to have a tangible piece of merch in my hands. I don't like paying too much for them, though. I usually use a 30% coupon at Borders to get a good deal, but I agree that catalog titles should ALL be $10 tops.
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Old 03-18-08, 12:35 PM
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Originally Posted by KillerCannibal
I still buy plenty of CDs. I'm part of the dying breed that likes to have a tangible piece of merch in my hands. I don't like paying too much for them, though. I usually use a 30% coupon at Borders to get a good deal, but I agree that catalog titles should ALL be $10 tops.
There is a 40% Borders cd coupon good thru today. Check the Hot Deals forum.
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Old 03-18-08, 02:54 PM
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As long as they only sell the edited version of albums, I could give two shits about their pricing structure.
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Old 03-18-08, 02:59 PM
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I admit I don't buy many CD's at Wal-Mart because my musical taste favors stuff they don't really carry (more electronic type stuff) but I did buy Kraftwerk's Minimum-Maximum there.

But I'm all for this pricing. $5 for catalog CD's? I could finally build up my AC/DC collection then.
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Old 03-18-08, 03:07 PM
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Originally Posted by Michael Corvin
As long as they only sell the edited version of albums, I could give two shits about their pricing structure.
I don’t buy at Wal-Mart either, but the fact is that Wal-Mart is the number one retailer of CDs in the US and if they get this pricing structure it will be carried over to other retailers.

Also noted above is that the selection at Wal-Mart is shrinking. This is because CDs aren’t selling as well as they used to, thus the proposed pricing structure. The implied threat to the record companies is that if they don’t agree to this, their #1 salesman (Wal-Mart) will further reduce the number of titles they carry, possibly to a “new releases” only selection or possibly no CDs at all.
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Old 03-18-08, 04:06 PM
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I guess they won't be carrying The Beatles cds if this goes through. There may be other artists who set the retail price of their cds also. Wal-Mart can probably sell them for whatever they want but I doubt if Paul, Ringo, and the estates of John and George will cut the wholesale price. The Beatles keep the price high in order to keep demand consistent from year to year. They would rather sell a million a year over 20 years than 20 million in one year. This also keeps them always in print. They sell as many this year as they did last year, and the year before that, and so on.
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Old 03-18-08, 04:21 PM
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Originally Posted by rw2516
I guess they won't be carrying The Beatles cds if this goes through. There may be other artists who set the retail price of their cds also. Wal-Mart can probably sell them for whatever they want but I doubt if Paul, Ringo, and the estates of John and George will cut the wholesale price. The Beatles keep the price high in order to keep demand consistent from year to year. They would rather sell a million a year over 20 years than 20 million in one year. This also keeps them always in print. They sell as many this year as they did last year, and the year before that, and so on.
While that is indeed the motivation for their pricing structure, the main reason why they sell consistently from year to year is because they're The Beatles.
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Old 03-18-08, 05:02 PM
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I recognize the desire for the tangible CD, and for my favorite stuff I still get it - mainly for bonus disks, etc... but if I have a choice between $12.99 for the disk and $9.99 for digital only, then I typically take the digital; especially given that the first thing I do is rip the disk to digital and then put it away.

-Good point about losing the purchased iTunes music if I lose my HD though. I think its time to back up my music.

-Oh, and I rarely buy at Wal-Mart due to poor selection, but if other retailers pick up this pricing structure then that would be cool.
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