UMVD price "decreases"

it's like an active plan to kill off independent record stores.

Erick, I know it's becoming virtually impossible to run an independent record store in today's climate, but I don't see how Universal's price cuts are contributing to it. Sure, the available margin per CD sold is less, but theoretically Universal is enabling you to sell CDs at a price that some research is showing to be the magic number for consumers. And from there, it becomes the 'make it up on volume' argument.

Assuming that the price is somehow significantly demand-stimulating, don't you have the potential to realize significantly more net profit (yes, less percentage gross profit, but with inventory effects, etc. . . )? Also, don't you generate more store traffic and all of the resultant postitive effects?

Universal should be vilified for many things, but taking the first step in leading CD prices to a fair level (I don't think they're there yet) is not one of them. I don't buy the argument.

Say Bob Marley's "Legend" sells at $18.98 -- which it did, often -- and with our cost fixed, we make about $6. If it's lowered to $12.98, we make $2 on that disc. Now the figures are obvious, but I wonder if such a low price will make all the stoners run out and buy three times as many copies, which would take us back to where we started before the markdown? Sony has a "Pricebusters" program that puts the SRP at $13.98 with a cost of $9.86, which I think is more than fair. In fact, not to stump for Sony, but they've been cutting prices in this fashion for months now, with little or no press. "Room For Squares" has had the $13.98 price point for the whole summer, and it's still selling.

Again, I agree that cutting prices is good, so long as it's reasonable, and UMVD is not being reasonable.

theoretically, perhaps. but in actuality, universal is just plain lying. using erick's actual record-store numbers, universal is charging stores two dollars less than it used to while telling consumers that stores will now be charging six dollars less they used to. what on earth, besides hubris, gives them the right to do that? PLUS they're taking a variety of incentives, such as co-op advertising, away from the stores, which makes it even less likely that stores will go along with the program.

lie #2 is that -- unless every reporter in the world misunderstood universal's initial announcement -- the company claimed that it's CDs would now cost consumers $9.99. if they're charging retailers a wholesale price of $10.79, as erick says they are, then that $9.99 price point is going to be awfully hard for a store to achieve.

Result: ow.