Universal Music hopes better jewel cases will bolster CD sales?

Universal Music hopes better jewel cases will bolster CD sales?

Summary: In the Honestly, we don't make this stuff up department, as retail sales of its CDs get whittled away by a la carte downloads (both legal and illegal on the Internet), Universal Music is apparently revamping the packaging of its CDs to spruce up their sales.  Included in the plan are stronger, more durable jewel cases called "super jewel boxes.

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TOPICS: Legal
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In the Honestly, we don't make this stuff up department, as retail sales of its CDs get whittled away by a la carte downloads (both legal and illegal on the Internet), Universal Music is apparently revamping the packaging of its CDs to spruce up their sales.  Included in the plan are stronger, more durable jewel cases called "super jewel boxes."  This of course makes a lot of sense if you're a music label.  Instead of doubling your investments in the only channel that's growing (the online channel), sink some money into the one that's about to become extinct with something environmentally friendly like heavier duty plastic.  Although some music buyers see an album as an integrated work of art, CDs (and the LPs that preceded them) are typically a clever way for the record industry to sell one to three really good songs for $12-$18.  At 99 cents per song, a la carte sales of music shatters that model.  Currently, the online channel accounts for about 6 percent of music industry sales and it has been climbing pretty steadily at about a percentage point a year.  But that doesn't tell the whole story.  If you sell $100M worth of music and 90 percent of it comes from $15 CDs, that equates to 60,000 distinctly separate purchases.  If 6 percent of your purchases come from 99 cent downloads, that also equates to 60,000 distinctly separate purchases.  So, from a revenue point of view, the physical media channel generates more revenue.  But, in terms of units sold, the music industry is at its tipping point and my sense is that once that tipping point has passed, the percentage points for the two channels are going to change a bit more rapidly as the majority of units sold will be downloads instead of physical media.

Topic: Legal

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5 comments
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  • DRM'ed music downloads is going to tank like DRM'ed ebooks

    See [url=http://www.ehomeupgrade.com/entry/1792/why_are_online]here[/url] and [url=http://www.cdfreaks.com/news/13590]here[/url]. DRM'ed music downloads will be declared dead within 3 years.
    P. Douglas
    • Wrong

      ebooks didn't die because of DRM, ebooks died because of incompatibility between readers.

      Music DRM (read iTunes, since that is what you really mean) is different. It will play on ANY Windows 2000, XP or OS X computer. That's about 90% of anyone who would listen to music on their computer. It will burn to a redbook compatible CD which covers essentially 100% of anyone who would listen to their music on a stereo. And it will play on an iPod, which is 70% of anyone who would listen to music on an mp3 player.

      DRM fails when a certain percentage of customers push up against it. Apple's DRM falls well outside the bounds of use of the vast majority of customers using it, and so, as far as they are concerned, it doesn't even exist.

      It's the same reason DVD region coding hasn't killed the DVD. Too few people care.
      baggins_z
      • No I'm not

        Okay. Let me rephrase what I said: ebooks on the MS Reader platform died because of DRM. Likewise, ebooks died on many other platforms because of local DRM systems. Please note that about 6% of music purchases are from music downloads, and this is now flattening ? see the links in my first post for more information. It is just a matter of time before music downloads see consistent negative growth, and eventually become at best a niche industry.

        As for DVD region coding, the reason why it doesn?t affect DVD sales all that much, is because not that many people have run into the barrier ? as you suggested. My point is, if content providers try to apply DRM broadly to their products in a way that curtails people?s freedoms, they should expect the technology will kill the sale of their products. Therefore if content providers were to start applying DRM to CDs en masse, they would destroy their own industry.
        P. Douglas
  • Improved jewel cases?

    The best buggy whips money can buy. Is the record industry ever going to get a clue? The CD is on life support. I only buy them directly from the artist. I refuse to support morons who come up with ideas like this with my hard earned dollars.
    GrumpyOldMan
  • Frustrated efforts? Or statements?

    Perception and understanding.
    yogeee