Post by Jason on May 7, 2004 20:49:03 GMT -5
This comes out after Universal Music Group lowered the suggested retail price of CDs by many of their artists earlier this year.
Warner Music Group, the company behind Madonna , Missy Elliott and Rod Stewart , is reducing the suggested retail price on more than 1,700 albums beginning next week in a bid to spur CD sales.
The initiative, which was outlined in a letter sent by the recording company to retailers this week, lowers the suggested retail price on 1,776 titles that have been in stores for at least 18 months.
The company's suggested price on more than 1,200 of the so-called back catalog titles will change from between $18.98 and $13.98 to $9.98. The roughly 500 other titles will have a suggested price between $13.98 and $11.98.
Warner told retailers it would include recordings from Chris Isaak , the Doobie Brothers, Prince and James Taylor , among other albums from established acts slated for lower pricing.
"After numerous conversations with many of our retail partners over the last year about ways in which we can help drive music consumers into stores, we created a program incorporating the most significant price reduction in our history," Warner Music Group said in a statement.
A Warner spokesman declined to elaborate on the initiative, which goes into effect on Monday.
The move by Warner comes three weeks after rival Universal Music Group announced it would ease back on a plan it launched in January to cut the suggested retail price of all of its CDs from $18.98 to $12.98.
The plan ultimately received mixed support from retailers, some of whom refused to go along with the price cuts altogether, and the company responded by raising its suggested retail prices by $1 last month.
Another component of the UMG plan was the company's decision to stop the established practice of giving discounts to retailers who spend their own money to advertise or prominently display its CDs.
In contrast, Warner's initiative does not affect co-op advertising discounts.
Michael Goodman , a media and entertainment analyst at the Yankee Group in Boston, said focusing the price cuts on its older releases was more likely to pay off for Warner Music than cutting prices on new offerings.
"When you cut the prices on a new release you're not boosting sales sufficiently to offset revenue declines on the price point," Goodman said. "On the back catalog, you're in a better position to boost sales to offset a lower price point."
The pricing changes are meant to give retailers more options to promote sales, thereby generating business for recording artists on Warner, which Time Warner Inc. sold in November to an investor group including Edgar Bronfman Jr., Thomas H. Lee Partners, Bain Capital and Providence Equity Partners.
It was not immediately clear how the initiative was being received by retailers. Several had not yet seen the letter, which was sent out on Tuesday.
Calls to the National Association of Recording Merchandisers were not immediately returned Friday.
The initiative, which was outlined in a letter sent by the recording company to retailers this week, lowers the suggested retail price on 1,776 titles that have been in stores for at least 18 months.
The company's suggested price on more than 1,200 of the so-called back catalog titles will change from between $18.98 and $13.98 to $9.98. The roughly 500 other titles will have a suggested price between $13.98 and $11.98.
Warner told retailers it would include recordings from Chris Isaak , the Doobie Brothers, Prince and James Taylor , among other albums from established acts slated for lower pricing.
"After numerous conversations with many of our retail partners over the last year about ways in which we can help drive music consumers into stores, we created a program incorporating the most significant price reduction in our history," Warner Music Group said in a statement.
A Warner spokesman declined to elaborate on the initiative, which goes into effect on Monday.
The move by Warner comes three weeks after rival Universal Music Group announced it would ease back on a plan it launched in January to cut the suggested retail price of all of its CDs from $18.98 to $12.98.
The plan ultimately received mixed support from retailers, some of whom refused to go along with the price cuts altogether, and the company responded by raising its suggested retail prices by $1 last month.
Another component of the UMG plan was the company's decision to stop the established practice of giving discounts to retailers who spend their own money to advertise or prominently display its CDs.
In contrast, Warner's initiative does not affect co-op advertising discounts.
Michael Goodman , a media and entertainment analyst at the Yankee Group in Boston, said focusing the price cuts on its older releases was more likely to pay off for Warner Music than cutting prices on new offerings.
"When you cut the prices on a new release you're not boosting sales sufficiently to offset revenue declines on the price point," Goodman said. "On the back catalog, you're in a better position to boost sales to offset a lower price point."
The pricing changes are meant to give retailers more options to promote sales, thereby generating business for recording artists on Warner, which Time Warner Inc. sold in November to an investor group including Edgar Bronfman Jr., Thomas H. Lee Partners, Bain Capital and Providence Equity Partners.
It was not immediately clear how the initiative was being received by retailers. Several had not yet seen the letter, which was sent out on Tuesday.
Calls to the National Association of Recording Merchandisers were not immediately returned Friday.