Big retail news

[EggHd]

Universal is dropping the price on their front line CDs to an MSRP of 12.98 and
dropping the wholesale 25% to about 9 bucks.

They will also not do anymore price and positioning (at a cost to the record
company of 1 to 2 bucks a record), co op, discounts and rebates....

Interesting.


---------------------------------------
"I know enough to know I don't know enough"

[Kurt Albershardt]

EggHd wrote:
> Universal is dropping the price on their front line CDs to an MSRP of 12.98 and
> dropping the wholesale 25% to about 9 bucks.
>
> They will also not do anymore price and positioning (at a cost to the record
> company of 1 to 2 bucks a record), co op, discounts and rebates....
>
> Interesting.

Nice--hope it pays off for them and the others follow.

[EggHd]

<< Nice--hope it pays off for them and the others follow. >>

It doesn't sound too good for retailers based on the $$$ they used to get from
the labels. My best guess is that Universal looked at how much the net per
record to the retailers after buying in to the programs.

So the label will get about the same, retail loses a hefty part of msrp 16.98
to 18.98 and doesn't get money for price and positioning nor do they get a
discount for ordering volume.

Another big point is that artist royalties are tied to the msrp. They have just
taken a cut as well.

Let's see how this works out.



---------------------------------------
"I know enough to know I don't know enough"

[Kurt Albershardt]

EggHd wrote:

>> Nice--hope it pays off for them and the others follow.
>
> It doesn't sound too good for retailers based on the $$$ they used to get from
> the labels. My best guess is that Universal looked at how much the net per
> record to the retailers after buying in to the programs.

As a former small retailer I never got any of that anyway. I'd love to
see the independent retailers a little less disadvantaged vis-a-vis the
megastores, since they often promote newer and smaller acts.

[EggHd]

<< But could this be bad for the mega selling artist and good for the new
or smaller artist since the retailer won't be pushing the volume sellers? >>

Not sure. 12.98 list is pretty cool. but the whole sale margin isn't is wide.

18.98 used to be a 12 buck wholesale.

12.98 is now 9 and change.



---------------------------------------
"I know enough to know I don't know enough"

[NeilH011]

>Universal is dropping the price on their front line CDs to an MSRP of 12.98
>and
>dropping the wholesale 25% to about 9 bucks.
>
>They will also not do anymore price and positioning (at a cost to the record
>company of 1 to 2 bucks a record), co op, discounts and rebates....
>
>Interesting.

Wonder if it has anything to do with the GE/NBC merger? Drop the price on
product, see some big volume gains that can go in the pockets of the board
members over the next 90 days before the new company takes over & has to worry
about whether or not the more recent margins on product have been decent or
razor-thin. After all, the price for the company has already been set.

NeilH

[Rob Adelman]

NeilH011 wrote:

> Wonder if it has anything to do with the GE/NBC merger? Drop the price on
> product, see some big volume gains that can go in the pockets of the board
> members over the next 90 days before the new company takes over & has to worry
> about whether or not the more recent margins on product have been decent or
> razor-thin. After all, the price for the company has already been set.

I wonder how this figures into the equation?

"Study: CDs may soon go the way of vinyl"
<http://www.cnn.com/2003/TECH/ptech/09/03/cd.future/index.html>

[Les Cargill]

Rob Adelman wrote:
>
> NeilH011 wrote:
>
> > Wonder if it has anything to do with the GE/NBC merger? Drop the price on
> > product, see some big volume gains that can go in the pockets of the board
> > members over the next 90 days before the new company takes over & has to worry
> > about whether or not the more recent margins on product have been decent or
> > razor-thin. After all, the price for the company has already been set.
>
> I wonder how this figures into the equation?
>
> "Study: CDs may soon go the way of vinyl"
> <http://www.cnn.com/2003/TECH/ptech/09/03/cd.future/index.html>

That report is marginally of less quality than bad science fiction. If
CD is replaced, it will not be replaced by video on demand, at
least no in the next say, 20 years.

This is the same basic error comitted by the FCC, though. "Some
magickal technology will save us from all this". Feh. Try
to get VC for a broadband product right now.

Factoring in intergenerational i-PODism, if it's all PtoP, there
is no business model. The music business as we kn(e?o?)w it
would then be an artifact of the period following WWII and ending
in about ... now.

--
Les Cargill

[EggHd]

<< Wonder if it has anything to do with the GE/NBC merger? >>

And the 4th quarter is over 50% of CD sales. They may be straining to hit
their numbers?



---------------------------------------
"I know enough to know I don't know enough"

[Arny Krueger]

"EggHd" > wrote in message


> Universal is dropping the price on their front line CDs to an MSRP of
> 12.98 and dropping the wholesale 25% to about 9 bucks.

> They will also not do anymore price and positioning (at a cost to the
> record company of 1 to 2 bucks a record), co op, discounts and
> rebates....

> Interesting.

We would appear to be in the middle of a marketing test to determine if high
prices are one reason why CD sales have stopped growing. My guess is: No.

This also positions CDs as second-tier media below DVDs.

[Andrew M.]

I wonder why the majors haven't lowered their prices so that a $20 bill
will buy 2-3 CD's. Economy of scale anyone?




Arny Krueger wrote:

> "EggHd" > wrote in message
>
>
>
>>Universal is dropping the price on their front line CDs to an MSRP of
>>12.98 and dropping the wholesale 25% to about 9 bucks.
>
>
>>They will also not do anymore price and positioning (at a cost to the
>>record company of 1 to 2 bucks a record), co op, discounts and
>>rebates....
>
>
>>Interesting.
>
>
> We would appear to be in the middle of a marketing test to determine if high
> prices are one reason why CD sales have stopped growing. My guess is: No.
>
> This also positions CDs as second-tier media below DVDs.
>
>

[Roger W. Norman]

Then again, neither are computer sales profits, you know. If they start by
trying to restructure the retail end with lowered retail prices but still
charge the same for the distribution, then it's going to be point where
retail will make a move that either offers better prices at smaller margins,
just like computers, or the majors will simply have to decide that they
still can't dictate the market like that and be willing to take some of the
hit themselves. I guess it means deciding how many billions of $US you
need in comparison to what it costs to die.

At least the majors are thinking about it. As a retailer I'd be willing to
shoot a couple of people right now. And I damned sure wouldn't expect the
talent to take the hit. I believe, if the talent's on one side, and the
retailer's on the other, it could be called a squeeze play. The consuming
public have already put up an earthen damn. And now it appears that the
majors have painted themselves into a corner. If they can budge a little
bit, why not see how much further they can budge?

--


Roger W. Norman
SirMusic Studio
Purchase your copy of the Fifth of RAP CD set at www.recaudiopro.net.
See how far $20 really goes.




"EggHd" > wrote in message
...
> << But could this be bad for the mega selling artist and good for the new
> or smaller artist since the retailer won't be pushing the volume sellers?
>>
>
> Not sure. 12.98 list is pretty cool. but the whole sale margin isn't is
wide.
>
> 18.98 used to be a 12 buck wholesale.
>
> 12.98 is now 9 and change.
>
>
>
> ---------------------------------------
> "I know enough to know I don't know enough"

[xy]

i think cd's should be $7 first three months of release, then drop to
$5.

a movie costs tens of millions of dollars to make, and hundreds of
people and a huge tv/newspaper marketing push. then the dvd costs
$18-20 when it comes out.

you can make a fully professional cd for well under a million, and
with just a few people. yet cd sellers want the same $18-20. it's a
rip off.

i personally don't want to subsidize a label's 90% loser roster,
coke-head middle management, and 7 or 8 digit executive salaries.

commercial music cd's: the big rip-off.

[EggHd]

<< a movie costs tens of millions of dollars to make, and hundreds of
people and a huge tv/newspaper marketing push. then the dvd costs
$18-20 when it comes out. >>

Right but it has already been in theathers a 9.00 PER PERSON, pay per view,
rental, cable TV, netwrok TV and THEN goes on sale.

<< you can make a fully professional cd for well under a million, and
with just a few people. yet cd sellers want the same $18-20. it's a
rip off. >>

Under a million? How about under 10K in some cases? BUT the only revenue a CD
brings in the door is sales.



---------------------------------------
"I know enough to know I don't know enough"

[Scott Dorsey]

xy > wrote:
>i think cd's should be $7 first three months of release, then drop to
>$5.

Sorry, if I put a CD out on my small label at that price, and I spent no
money at all on marketing or promotion, I'd be losing money. If I spent
money on promotion, I'd be losing even more.

>you can make a fully professional cd for well under a million, and
>with just a few people. yet cd sellers want the same $18-20. it's a
>rip off.

Right, but how many discs are sold? Most recordings don't ever sell enough
copies to break even. Not all labels are big outfits.

>i personally don't want to subsidize a label's 90% loser roster,
>coke-head middle management, and 7 or 8 digit executive salaries.

Speak for yourself. There are a lot of small labels out there who are
having enough trouble keeping afloat. My only employee was the cat. I'm
not Warner Brothers. But I'm competing in the same market in some ways.
--scott
--
"C'est un Nagra. C'est suisse, et tres, tres precis."

[Gary Koliger]

a million!!!? - **** I could do it for half that

Gary

EggHd wrote:

> << a movie costs tens of millions of dollars to make, and hundreds of
> people and a huge tv/newspaper marketing push. then the dvd costs
> $18-20 when it comes out. >>
>
> Right but it has already been in theathers a 9.00 PER PERSON, pay per view,
> rental, cable TV, netwrok TV and THEN goes on sale.
>
> << you can make a fully professional cd for well under a million, and
> with just a few people. yet cd sellers want the same $18-20. it's a
> rip off. >>
>
> Under a million? How about under 10K in some cases? BUT the only revenue a CD
> brings in the door is sales.
>
> ---------------------------------------
> "I know enough to know I don't know enough"

[Dave Martin]

"Scott Dorsey" > wrote in message
...
>
> Speak for yourself. There are a lot of small labels out there who are
> having enough trouble keeping afloat. My only employee was the cat. I'm
> not Warner Brothers. But I'm competing in the same market in some ways.

Was your cat contributing to a 401K?

--
Dave Martin
Java Jive Studio
Nashville, TN
www.javajivestudio.com

[Andrew M.]

Those are some pretty big generalizations. But maybe you are right.
Maybe each major label should only have one artist from both genres. One
Britney and one Justin Timberlake should cover it nicely.

If you pay for a CD then isn't it commercial?



xy wrote:
> i think cd's should be $7 first three months of release, then drop to
> $5.
>
> a movie costs tens of millions of dollars to make, and hundreds of
> people and a huge tv/newspaper marketing push. then the dvd costs
> $18-20 when it comes out.
>
> you can make a fully professional cd for well under a million, and
> with just a few people. yet cd sellers want the same $18-20. it's a
> rip off.
>
> i personally don't want to subsidize a label's 90% loser roster,
> coke-head middle management, and 7 or 8 digit executive salaries.
>
> commercial music cd's: the big rip-off.

[dt king]

"Scott Dorsey" > wrote in message
...
> xy > wrote:
> >i think cd's should be $7 first three months of release, then drop to
> >$5.
>
> Sorry, if I put a CD out on my small label at that price, and I spent no
> money at all on marketing or promotion, I'd be losing money. If I spent
> money on promotion, I'd be losing even more.

Yeah, but you could make it up in volume.

dtk

[Darryl]

"Scott Dorsey" > wrote in message
...
> xy > wrote:

> Speak for yourself. There are a lot of small labels out there who are
> having enough trouble keeping afloat. My only employee was the cat. I'm
> not Warner Brothers. But I'm competing in the same market in some ways.
> --scott
> --
> "C'est un Nagra. C'est suisse, et tres, tres precis."

So you're probably gonna let the cat go, huh? Tough business.

Darryl

[Scott Dorsey]

Darryl > wrote:
>"Scott Dorsey" > wrote in message
...
>> xy > wrote:
>
>> Speak for yourself. There are a lot of small labels out there who are
>> having enough trouble keeping afloat. My only employee was the cat. I'm
>> not Warner Brothers. But I'm competing in the same market in some ways.
>
>So you're probably gonna let the cat go, huh? Tough business.

Sadly the cat had a heart attack in the night and died at a young age of
five. And that was a few years ago. He had a pretty good health plan too.
--scott
--
"C'est un Nagra. C'est suisse, et tres, tres precis."

[Fill X]

I don't pretend to understand the music business even though I've made my
living in it for pretty much all of my adult life. I don't gripe about what
music costs to buy. I just wish I could hear more of it and decide what to buy.
There's so little on radio, especially in certain places, when I go to buy
music from a new group, I'm usually shooting in the dark. I still have the dick
spottswood show, but i know a lot of that stuff already and they aren't new
groups.
Perhaps I'm not trying hard enough, but I do know there's a problem with
exposing people to music. When I think of a band I enjoy such as Quasi. I can't
imagine where I would have heard them if a friend didn't have their record
first. They weren't from my area, hardly were written about, didn't get played
on the radio and had no label promotion. This is what I'd like to see a
solution for. I would guess that some reform in radio (like going back to real
dj's) would help. But again, I don't pretend to understand the business.


P h i l i p

______________________________

"I'm too ****ing busy and vice-versa"

- Dorothy Parker

[LeBaron & Alrich]

Fill X > wrote:

> I don't pretend to understand the music business even though I've made my
> living in it for pretty much all of my adult life. I don't gripe about
> what music costs to buy. I just wish I could hear more of it and decide
> what to buy. There's so little on radio, especially in certain places,
> when I go to buy music from a new group, I'm usually shooting in the dark.
> I still have the dick spottswood show, but i know a lot of that stuff
> already and they aren't new groups.

> Perhaps I'm not trying hard enough, but I do know there's a problem with
> exposing people to music. When I think of a band I enjoy such as Quasi. I
> can't imagine where I would have heard them if a friend didn't have their
> record first. They weren't from my area, hardly were written about, didn't
> get played on the radio and had no label promotion. This is what I'd like
> to see a solution for. I would guess that some reform in radio (like going
> back to real dj's) would help. But again, I don't pretend to understand
> the business.

You have summarized it potentially well:

1. Sales are down;
2. RIAA blaming the donwloaders...
3. It's hard to hear a variety of stuff, if that stuff is new;
4. The same old stuff people are hearing isn't to their liking...
5. Sales are down.

What do O Brother and Norah have in common? You can the people sing and
they sound like people singing. You can hear the musical instruments and
they sound like instruments being played.

Meanwhile, back in the Big Kitchen at the Big Casino somebody took Wall
of Sound for Wall of **** and the bosses wonder why their business
stinks.

--
ha

[EggHd]

<< What do O Brother and Norah have in common? >>

You can also use Linkun Park and Kid Rock as big sellers. It's hard to put a
finger on why what sells through.

Hillary Duff scanned 203K units this first week. (next week's Billboard chart)

Mary J Blige did 285K first week (#1. )

Evanscence have scanned 2.4 million and 77K this week.

Coldplay is at 2.29 mil.

Bab Boys II sountrack has scanned over a million. #8 on the top 200.

After 79 weeks on the chart Norah Jones at almost 7 million units pulling in
59K this week.

Shania has scanned 4.1 million on Up, with 34K this week.

Xtina is at 2.9 mil with 34K this week.

Justin Timberlake also at 2.9 mil.

Toby Keith at 3.1 mil.

Audio Slave 1.6 mil

White Stripes 925K

Kelly Clarkson 1.5 mil

Metalica at 1.3 mil
Matchbox at 1.4 mil

Eminem Show 8.7 mil

Johnny Cash at 531K

Jimmy Buffet at 710K!

Josh Gorban at 3.4 mil after 90 weeks

There are a bunch of other record at or near 1 million scanned in the US.

The top 200 scanned 4 million this week, current albums only, not catalog and
albums under 7k a week do not show up.

The total soundscan for albums currently in the top 200 is 158, 031, 400. The
oldest record I see there is Josh Gorban at 90 weeks. I don't know why he is
current and the last coldplay album (parachutes) is catalog yet it sold 13k
this week..

Some (I find) interesting numbers

Miles Davis - Kind of Blue 2.5 mil (and soundscan didn't start until 90/91ish)
330 weeks on catalog charts.

Beatles-Abby Road 3.4 mil since soundscan


---------------------------------------
"I know enough to know I don't know enough"

[EggHd]

<< I think Fill brings up an excellent point. You say people buy what they
like and what they connect with. >>

I was thinking about that... When someone is in high school or college, their
word of mouth circle is so much bigger than when they are out on their own with
a small group of friends.

Our "world" seems to rely on advertising more and more the older we get?



---------------------------------------
"I know enough to know I don't know enough"

[Gary Koliger]

EggHd wrote:

> Our "world" seems to rely on advertising more and more the older we get?
>
> Its probably because once we are able to let go of the compulsion to go out and
> try to get laid, party till we puke or some other form of hanging out with our
> friends who are the most important people in our lives, we spend most of our
> time at home in front of tv with the people who now mean the most to us - our
> families?

[LeBaron & Alrich]

EggHd > wrote:

> << I think Fill brings up an excellent point. You say people buy what they
> like and what they connect with. >>

> I was thinking about that... When someone is in high school or college,
> their word of mouth circle is so much bigger than when they are out on
> their own with a small group of friends.

> Our "world" seems to rely on advertising more and more the older we get?

Dpending on how and where we live. I'm so far out of the "main" stream
that my contact with media advertising aimed at the alleged masses is
well below the norm. You should have heard us laughing when Nielson sent
us an application to join their surveying "family". At this point we
don't watch braodvcast TV nor hear much radio unless driving away from
home.

--
ha

[NeilH011]

><< At this point we
>don't watch braodvcast TV nor hear much radio unless driving away from
>home. >>
>
>Are we going to read somewhere one day that you were shootin' for some food
>and
>up from the ground came a bubblin' crude?

Oil, that is?

NeilH

[Bob Olhsson]

In article >, Rob Adelman
> wrote:

>But could this be bad for the mega selling artist and good for the new
>or smaller artist since the retailer won't be pushing the volume sellers?

Not really because the smaller artists get less money and by definition
will not be making up the difference in volume. The smaller artist has
also relied on the small, alternative retail outlets who will be bit
the hardest by this.

--
Bob Olhsson Audio Mastery, Nashville TN 615.385.8051
Mastering, Audio for Picture, Mix Evaluation and Quality Control
http://www.hyperback.com/olhsson.html
Over 40 years making people sound better than they ever imagined!

[Dave Martin]

www.javajivestudio.com
"NeilH011" > wrote in message
...
> ><< At this point we
> >don't watch braodvcast TV nor hear much radio unless driving away from
> >home. >>
> >
> >Are we going to read somewhere one day that you were shootin' for some
food
> >and
> >up from the ground came a bubblin' crude?
>
> Oil, that is?
>
Yep - Black Gold; Texas Tea

--
Dave Martin
Java Jive Studio
Nashville, TN
www.javajivestudio.com

[EggHd]

<< Yep - Black Gold; Texas Tea >>

Anyone remember the SNL skit The Bel Arabs?



---------------------------------------
"I know enough to know I don't know enough"

[Jay - atldigi]

In article >,
(EggHd) wrote:

> << Yep - Black Gold; Texas Tea >>
>
> Anyone remember the SNL skit The Bel Arabs?
>

Yep. These days some of the jokes would probably cause a stir, but it
certainly had its funny moments.

--
Jay Frigoletto
Mastersuite
Los Angeles
promastering.com

[LeBaron & Alrich]

NeilH011 > wrote:

> >You should have heard us laughing when Nielson sent
> >us an application to join their surveying "family". At this point we
> >don't watch braodvcast TV nor hear much radio unless driving away from
> >home.

> Actually, that doesn't make you any less valid of a candidate to
> participate... statistically speaking, since there is a part of the
> population that doesn't consume much mass media, then that part should in
> fact be represented in the surveys or "sweeps".

> I've been to the facility in Florida where Nielsen processes the diaries
> (I'm in the TV biz) to audit the diaries for our market on several
> occasions & there are always a handful of booklets that have very little
> viewing overall. They're definitely included in the final sample. I
> imagine Arbitron does the same thing for the radio surveys.

No offense to your occupation, Neil, but I'd have to care about the
ratings and the medium to bother with the surveys. And I don't.
Basically, I quit watching TV in 1959.

--
ha

[LeBaron & Alrich]

EggHd > wrote:

> << At this point we
> don't watch braodvcast TV nor hear much radio unless driving away from
> home. >>

> Are we going to read somewhere one day that you were shootin' for some
> food and up from the ground came a bubblin' crude?

Naaah, but the boy brought home with pheasant twice last year. So we're
buying him a bigger shotgun. <g>

You might read we go swimmin' nude.

--
ha

[NeilH011]

>> I've been to the facility in Florida where Nielsen processes the diaries
>> (I'm in the TV biz) to audit the diaries for our market on several
>> occasions & there are always a handful of booklets that have very little
>> viewing overall. They're definitely included in the final sample. I
>> imagine Arbitron does the same thing for the radio surveys.
>
>No offense to your occupation, Neil, but I'd have to care about the
>ratings and the medium to bother with the surveys. And I don't.
>Basically, I quit watching TV in 1959.

No offense taken; there are lots of people who don't consume one form of media
or another, for whatever their reasons may be; and unless that percentage, with
regard to Television usage, reaches some kind of critical mass, it doesn't
bother me at all.

That's the case in any business, really... if you're a studio owner, for
example, you're obviously not concerned with the percentage of the population
that doesn't sing/play an instrument/do voiceovers/etc (IOW, people who would
never for any reason come to your studio), you're more concerned about better
serving the percentage of people that would use your services.

NeilH

[EggHd]

<< Does anybody wonder how many O Brother might have sold if it had been
given significant airplay? >>

The album had big exposure through the movie tie in and some radio play. There
were drivers in place.



---------------------------------------
"I know enough to know I don't know enough"

[LeBaron & Alrich]

EggHd > wrote:

> << Does anybody wonder how many O Brother might have sold if it had been
> given significant airplay? >>

> The album had big exposure through the movie tie in and some radio play.
> There were drivers in place.

But did it get let onto the mainstream radio channels that move pop? Did
it get a real shot at that mass market or did programmers assume their
demo wouldn't dig it?

--
ha

[EganMedia]

> Did
>it get a real shot at that mass market or did programmers assume their
>demo wouldn't dig it?

The programmers looked at other stations' playlists and didn't see it. They
never even had to wonder whether anyone would dig it.


Joe Egan
EMP
Colchester, VT
www.eganmedia.com

[EggHd]

<< But did it get let onto the mainstream radio channels that move pop? >>

No. But that doesn't mean it wasn't exposed in a mjor way.

<<Did it get a real shot at that mass market or did programmers assume their
demo wouldn't dig it? >>

Why assume that mass market is only mainstream pop radio that pretty much
appeals to kids?





---------------------------------------
"I know enough to know I don't know enough"

[LeBaron & Alrich]

EggHd wrote:

> << But did it get let onto the mainstream radio channels that move pop? >>

> No. But that doesn't mean it wasn't exposed in a mjor way.

I understand the movie was a success, and that there were non-pop radio
venues on it.

> <<Did it get a real shot at that mass market or did programmers assume their
> demo wouldn't dig it? >>

> Why assume that mass market is only mainstream pop radio that pretty much
> appeals to kids?

I don't assume that, and that's kind of what has sparked my curiousity
about this. In fact, I was thinking that it would have had even more
success had more people, people who don't usually get exposed to that
genre of music, heard some of it. Hell, even so-called country radio
didn't play it much, as I understand it. Am I wrong about that?

Still just curious.
--
ha

[EggHd]

<< In fact, I was thinking that it would have had even more
success had more people, people who don't usually get exposed to that
genre of music, heard some of it. >>

They must have to sell so many units.

<< Hell, even so-called country radio
didn't play it much, as I understand it. Am I wrong about that? >>

I manage an artist signed to the good folks at Lost Highway, I can ask them.



---------------------------------------
"I know enough to know I don't know enough"