Talking tech since 2003

Universal Music Group (UMG) is making some much needed changes to their CD sales price point, but is it too little too late?  UMG announced today they will be dropping the price of physical CD’s to $10 or less.  The new price point will range from $6-$10 per album.  Additionally, UMG plans to add “deluxe content” to actual CD’s – stuff you would not be able to get through a digital download.

I have been arguing that this change in price should happen for a few years now.  I first pointed it out in an article I wrote a while back on illegal music downloading, you simply cannot have the same exact product in two distribution channels for different prices, especially since most people will choose the lower priced item.  It’s also worth noting that digital downloads are so much more convenient for many people.  Digital downloads are immediate, already on your computer for easy listening and transferring to your mobile device, and you don’t have to leave your home or wait for a CD to be delivered.

So I ask again, which would you pick probably 95-99% of the time?  Digital.  Unless of course you are an audiophile who likes to rip their own music in a particular lossless format.  Which by the way is completely fine, I’ve been known to do that.  UMG is also stating that their cheaper CD’s will allow them to still maintain a 25% profit margin.

Some more CD sale facts, CD sales are down 15.4% so far this year. Album sales were down 18.2% last year, and 19.7% in 2008, when CD sales totaled 360.6 million, as opposed to the 706.3 million units CDs scanned in 2000.

What are your thoughts? Would you ever consider buying a physical CD ever again even with a lower price point?

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