Velocity

CD’s don’t sell anymore and record labels are getting tired of the same old song. Therefore, they’re trying new ways to lure customers back into the record stores. According to an article that I read on ColoradoDaily, Universal Music Group is looking to set a new standard price for selling new releases. This pricing strategy is called “Velocity”, and this model suggests that record stores should reduce their profit margins for top selling artists CD's from 25 percent to 35 percent, which will make new CD’s cost less than $10 dollars. Many record store owners are worried about this pricing strategy because they’re afraid it won’t allow them to bring in enough revenue to stay in business. At the same time they fear that by not adapting to this pricing system they will be alienating customers from buying CD’s from their shops.

I think this method will only increase sales by a small amount, but it won’t stop the steady decline. I still don’t believe that the compact disk can be saved, but I can’t blame UMG for trying new ways to make buying CD’s appealing. It will be interesting to see how well this model does within the months to come, but I don’t believe there will a significant change. As one commenter made within this article: “There's nothing special about a CD anymore”.

Submitted by: Jarvis R. Smith

Source
http://www.coloradodaily.com/cu-boulder/ci_14744033#axzz0j6SNXFJe