Monday, June 21, 2004
Universal Easing Back On CD Price Cuts
Universal Music Group’s CD price-cut plan, hailed as a hope to get music buyers back into stores, has hit resistance from retailers, all but killing the effort.
Nine months ago, Universal Music executives announced with great fanfare that the company was preparing to slash prices on CDs. The strategy was expected to breathe new life into the flagging offline retail sector, which has been hit hard by a combination of illegal online music trading, audience migration to online stores and a long-running sag in pop sales on the heels of the Jive Records-powered teen music boom of the late 90’s.
Today, Universal’s grand plan has been quieted by a combination of resistance from the very retailers the price cuts were expected to help and internal reconsideration of the program’s details.
Online Music Alliance Set To Splinter
Echo, a consortium of major retailers funding a proposed online music shopping standard infrastructure, is reportedly being abandoned.
Billboard reports that the major backers of the project, including Best Buy, Borders Group, Hastings Entertainment, Tower Records, Trans World Entertainment and Virgin Entertainment, are each pursuing their own music retailing strategies with individually-selected partners.
The Echo project was founded to take advantage of economies of scale in developing consumer music shopping and delivery tools.