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CD prices drop slightly

Here's a nice little surprise:

"The average retail price of full-length CDs fell to $13.29 in the first quarter of 2004--a decline of 4 percent from the same period a year ago, according to a new study. The top 50 CD sellers nationwide sold discs for an average price of $13.36, a drop of 3.1 percent versus a year ago, said a survey released Thursday by the NPD Group. Meanwhile, catalog CDs--comprised of titles that are 18-months-old or more--dropped below the $13 threshold to $12.99."

I'll give partial credit to NPD for getting half of it right:

"NPD President Russ Crupnick attributed the decline in part to a changing market due to the file-sharing boom. In addition, competition for entertainment dollars has become tougher for the recording industry in an environment that saw DVDs and video games growing at double-digit rates." (bolded section grade "A")

Here: You judge the accuracy of this statement:

"Record labels are diligently trying to respond to consumer feedback about high CD prices, and to the relative value of music," Crupnick said. "According to a consumer survey conducted earlier this year, one out of three CD buyers report rank the price of CDs important' or very important' in their purchase decision."

UPDATE June 4, 2004 6:07am
Rojisan astutely points out that the average selling price of an Album (to use the term loosely) on Magnatune is $8.59.

Indeed, I just paid $9.99 for new CDs of Mose Allison Chronicles: Live in London, Vol. 1 and Aimee Mann 's Lost in Space via Amazon's deal with CD Now. Sarah Mclachlan's Afterglow was even cheaper: $7.99.

The question I have for iTunes Music Store (and others), who are under industry pressure to raises their prices: Why would (or should) I pay the same amount of money for a downloaded album -- much worse sound quality, no physical liner notes, album art, etc. -- as a CD? If I want to listen in the car to the ITMS version, I must burn a CD, spending my time and money. Where's the value proposition in that?

Quite frankly, I don't see the merit in a $10 MP3 album. But if the $13 CD is too expensive, isn't the $13 MP3 version of the same album way too expensive? As the Magnatune pricing model demonstrates, yes -- by about 55% . . .

Source:
CD Price Declines are Accelerating, Says The NPD Group
Lee Graham
The NPD Group, Inc.
http://www.npd.com/press/releases/press_040603.htm

Study: CD prices sing the blues
CNET, June 3, 2004, 10:09 AM PDT
http://news.com.com/2100-1027-5225657.html

Thursday, June 03, 2004 | 09:13 PM | Permalink | Comments (0) | TrackBack (4)
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