Music for a Universal Audience

When the Universal Music Group, the world's largest record company, announced its plan, two months ago, to significantly reduce prices on their CDs, the news was music to consumers' ears, and signaled a long-awaited acknowledgement on the part of the music industry to take responsibility for declining sales. However, so far the revolution has not become a reality.

The plan, which would have been the first price cut in CD history, sought to decrease wholesale prices for CDs to retailers and reduce the Manufacturer Suggested Retail Price from as high as $18.98 to $12.98. Also, Universal proposed ending promotional subsidies to record stores in favor of direct-to-consumer advertising. Shortly after the decision was announced, many record stores objected to the lower $12.98 sticker price. Although Universal responded to such complaints by merely recommending the price to retailers, as of the beginning of October, the price cut was supposed to continue as planned, specifically on new CDs by Ludacris and Sting.

However, many chain music retailers in Durham have yet to notice a change in either their wholesale or retail prices, noting that both Sting's Sacred Love and Ludacris' Chicken-n-Beer are being sold at prices comparable to the cost of each artists' previous releases. Moreover, both Jerrold Schoenherr, manager of Borders in Durham, and Kim Diehl, manager of Millennium Music in Brightleaf Square, indicated that they didn't know whether their stores had chosen to comply with the price cut.

Dylan Black, a manager at FYE in The Streets at Southpoint, was similarly in the dark, stating that he knew about the price cut "just through the news." Sounding somewhat perplexed at Universal's seeming inability to follow through on the measure, Black noted that his store not only received the Ludacris and Sting CDs for the standard wholesale price, but that they also got promotional items for both discs. Although Black suggested the retail price may have been slightly reduced, he proposed that "Universal [may have] suggested that we do that just in hopes that they would cut prices, and we would receive compensation later." In response to other stores' failure to mention price changes, Black suggested that this might be due to poor communication between the record company and the store, declaring that "Universal doesn't have the same kind of record label representatives that other labels do. They have one rep for the whole East coast, so we never see them."

While local independent music stores have yet to see their prices change much, representatives from Schoolkids Records and CD Alley, both in Chapel Hill, are taking more decided stances on the issue, revealing an awareness of the negative implications of the price cut. Jeremy Paschall, an employee at Schoolkids, declared that while both their retail and wholesale prices had not decreased, the store was opposed to putting up promotions advertising the lower price, a component of Universal's plan. "We're an independent store and we don't really want to do that," he said. "The owner has complied to do some things, but really our prices haven't dropped a single cent."

In an economic situation in which CD sales have been on a decline for years as a result of competition from the Internet, Universal's plan is not necessarily positive. While all the retailers contacted expressed support for the measure as consumers, across the board, they expressed an opposition to Universal's approach. Diehl argues that Universal "could cut [CD prices] more because it's cheaper to make CDs than ever before." She added, "They're a major label that's made a lot of money by putting out a lot of crap [and] that's affected the music industry." While McCrossin merely pointed out that "Universal's still getting their money," Paschall was more opposed to the control over independent music stores implicit in the label's plan, arguing that the record company "has a part in owning your store when they put up a lot of promotional stuff." Paschall also noted, "I don't see independent record stores complying with this and doing what the labels want them to do." His response reflects a nationwide trend among independent record stores with respect to the measure and suggests that even if Universal's plan does become widespread, people may not buy into it.