EMI boss defends music industry; Universal drops prices
Written by steven on September 4, 2003 to Music Business.
The Vice-Chairman of EMI, David Munns, has defended his company’s stance on record prices and the state of the music industry.
In his statement, Munns defends his prices by saying, “There’s a lot that goes into the retail price - VAT, retailer’s cut, distribution costs, advertising and other marketing costs, producers’ fees and studio time, not to mention the artists and songwriters who need to be paid.”
On the subject of the Internet and music piracy, he was equally frank. “Whatever any of us feel about the price of anything, that doesn’t justify stealing. Illegal file-sharing is theft under copyright law. Is it okay to shoplift if you disagree with the prices a shop charges? Would you steal a Mercedes and justify it by saying it was because you couldn’t afford one?”
In a related story, the day after a report suggested the compact disc is heading the way of the 8-track tape, the world’s largest music label conglomerate promised a steep cut in CD pricing.
Universal Music Group on Wednesday said it will cut its wholesale prices and reduce its suggested retail pricing for CDs to $13, from between $17 and $19. The company, a subsidiary of Vivendi Universal, is home to a number of record labels, including Decca, Deutsche Grammophon, Interscope, Geffen, Island Def Jam, and Philips.
“Music fans will benefit from the price reductions we are announcing today,” Jim Urie, president of Universal Music & Video Distribution, said in a statement. “Our new pricing model will enable U.S. retailers to offer music at a much more appealing price point in comparison to other entertainment products. We are confident this pricing approach will drive music fans back into retail stores.”
The cuts follow the release on Tuesday of a report by Forrester Research that predicts the market for CDs will continue to shrink due to consumers’ increasing preference for downloading music – both legally and otherwise. CD sales peaked in 1999 and will tumble by nearly one third by 2008, according to the Forrester researchers.
Consumers should see reduced CD prices as early as October 1, according to UMG.
Visa Kopu contributed to this article.
Other articles with the same topic
- Billboard mentions Roxette (February 26, 2011)
- Citigroup takes control of EMI (February 1, 2011)
- Kobalt signs Roxette in North America (January 13, 2011)
- Record "The Look" and win $5,000 shopping spree (August 11, 2010)
- EMI Music triples full-year earnings (May 8, 2009)
16 comments
PerFanatic said on September 4, 2003 17:45:
Hmmm, the concept that downloading of copyrighted music is flawed. Did these people ever hear of the “spirit of the law”. Yes, if some people are downloading music INSTEAD OF buying the CD, then that is truly illegal and should be chastized. But what about the 1,000’s of people in the following two categories:
1) Those who download songs and THEN go buy the CD’s of the Artists that they’ve now found that they like (because of being able to download it), or
2) Those who download songs, but it does not affect the amount of CD’s they buy, because they probably can only afford to buy a few per year anyway because of the high prices.
Well, I’m in category 1... ever since I started downloading MP3’s, I’ve bought probably close to five times more CD’s per year than I would have otherwise. A good example is that two years ago, I was able to DL the entire Lasgo CD in 192kbps quality... just as good as a CD. Well, after a little looking around, I finally found a good price on the real CD and bought it... even though I already had all of the songs in perfect quality. Other examples are artists that I might never have known about if not for filesharing: E-Type, Richi M, Carola, Antiloop, Sylver, Rimini Project... I could go on and on. I can honestly say that I’ve easily bought over 100 CD’s that I would not have otherwise, as a direct result of file sharing! I’m certain that there are many others in this same situation, as well as many in category 2. I propose that these two factions FAR outweigh those that download INSTEAD OF buying. But the record company execs just continute to keep their heads up their own asses! I’ve not once seen a scientific survey funded by these people. They just seem to assume that since their sales numbers are down, it must be because of file sharing. Well, I simply can’t believe they are so moronic! They’re cutting their own throats with this ridiculous stance.
At least Universal is moving in the right direction with this price cut. However, if they still insist on putting this ridiculous copy protection on their CD’s, I don’t think their sales will increase that much. This year, my CD purchases are WAY down because of those damn copy protection schemes! If I pay $12-$18 for a CD, I damn well want to be able to do anything I want with it... including playing it on my PC’s and ripping files to copy to my MP3 player. They are infriging upon my rights to use the music as I please when buying their product. To use this moron’s car analogy... can you imagine going to buy a Mercedes for $50,000, but at the last minute the salesmen tells you... “Oh, you realize that you can only use this during the week (not on weekends) and you can only use the great audio system if you alone are in the car... you can’t “share it” with anyone else.”! No, that’s ludicrous and these jackasses need to come down to earth for a reality check! The worst thing of all about copy protection is that it ONLY hurts people who buy the crappy product. That’s because all of their protection schemes can be/have been broken by hackers, which means all of those songs will make it to the Internet in the form of MP3’s anyway! So what’s the point?
OK, enough ranting now... I feel better (if only just a little...)
PerFanatic said on September 4, 2003 17:50:
OK, to summarize, there are 3 major factors that are affecting CD sales:
1) Prices
2) Qaulity of Muic
3) Copy protection
Here’s a simple scenario for those idiot record execs to follow if they want to increase their sales...
1) Lower the prices of CD’s to $12-$13
2) Stop producing CD’s with 1 to 2 decent songs, with the other 8 being album filler
3) Stop copy protection all together! If 1 and 2 happen, you won’t have any reason to use it!
Seems simple, but I garuntee these pathetic pieces of crap won’t get it! They’d rather drag innocent people like you and me into court so they can get their beloved publicity!
TheRain1981 said on September 4, 2003 20:48:
LOL. I like this idea of slashing prices but I don’t think it’s going to make that much of a difference. The problem with the industry, as it has been said many times before, is not pleasing the fans - not giving them what they want.
royalball said on September 5, 2003 02:33:
I don’t like his comparison about the car.
If record companies want to sell records, don’t sell records that suck.
Did you know that record companies still make money when a CD is stolen in a store?
If a CD is stolen it is the store’s liability and it’s the store’s loss, so they have to pay the record company.
Booho said on September 5, 2003 08:29:
The comparison with the car is not acceptable, it’s nonsense.
Quote: “Would you steal a Mercedes and justify it by saying it was because you couldn’t afford one?”
The big and ESSENTIAL difference is:
A car is a single product, it can’t be copied. An mp3 can be copied, as much as you want to, and there is NO LOSS. The “pirates” don’t take anything AWAY, they COPY. It’s NOT STEALING. End of discussion.
Salvation7-20-7 said on September 6, 2003 05:55:
I’ve downloaded music, listened to it, enjoyed it. I’ve then turned around and bought the album. Is that a crime?? I still pay the high costs of CDs, but I would like to know if I like it or not before I buy it. If I don’t I delete the tracks, and buy the single. Just that simple.
Later,
Salvation7-20-7
Jud (moderator) said on September 4, 2003 14:21:
this example about the car is old and not really fitting.
We don’t use/buy more than one car, unless you are a collector and buy every car you like, while we (normally) like to listen to different bands.
Then, it’s not that we go to the musicshop and just take the CD with us “oh sorry I won’t pay for it, bye”.
But using this guy’s example: imagine you have a place where you can get your dreamed Mercedes for free (not really minding where it comes from) and next to it, you have a store where they sell your dreamed car for 40.000 Euro. What would you do? Go for the free one or pay for it? ;)
Anyway, great that somebody -finally- will reduce the CD prices :) *looking what bands are signed with Universal* :P