BMG to offer cheap CDs

[Gwarsbane]

http://www.slyck.com/news.php?story=521

Bertelsmann, or BMG, is to introduce a three-class system of CDs.

The music giant, whose artists include Christina Aguilera, Dido and Foo Fighters, will begin the system next month. Customers will be given the option of purchasing a basic version of new releases for €9.99 ($12), down from the current average price of €16.99 ($21).

The basic version will be comparable to home-made CDs, as they will contain no cover or booklet. Only a title will be printed directly onto the CD.

A standard and luxury version of each new release will also be available for €12.99 ($16) and €17.99 ($22) respectively.

The German music industry witnessed the worst of the global slump in CD sales. The album market fell from 197m sales in 1997 to 134m in 2003.

However, the Germans have shown a keen interest in legitimate online music vendors, such as those provided by OD2. Despite the small selection of music available, online sales are now outperforming CD singles.

BMG believe that selling music online is still in its infancy. During the transition, BMG want to keep consumers purchasing music, rather than losing them to file sharing and other free sources.

“We must become customer friendly and offer music fans a broad choice. The music industry has sat motionless on its backside for far too long,” said Mr Steinkamp, head of BMG Germany. “The cheap version will be similar to a self-burned CD, with no cover and just the title printed directly on to the disk. That is our anti-pirate CD.”

BMG hope that the new strategy will increase CD sales by a quarter, although they are not certain of success and profits will be at risk.

“We might even lose money. But we have to finely tailor what we offer to the demand and try something new,” Mr Steinkamp explained.

I can burn a music CD for under $1.00 Canadian after 15% taxes. Make it a printable CD with ink and print up my own CD cover, I'm now upto about $2.50 Canadian after 15% taxes. And they are trying to sell a "CD burned version with no covers, no lables on the CD for nearly $16.00 bucks Canadian and thats before the 15% takes I have to pay? I'm pretty sure they are producing full CDs with all the extra stuff for under $1.00. I'm not including costs for the artist and for ads, but I doubt that could bring up the cost more then $5.00 to $6.00 bucks.

I would really like to see an audit of how much it costs them to produce a CD, I bet I could do it cheaper. Heck I bet a monkey could do it cheaper.

[Kid]

But do you remember shipping, but yeah even shipping cant cost that much if you ship in huge bulk. I'd buy more cd's if they were cheaper but if I bought something Id want something more then just a burnt cd.

[Gwarsbane]

actually all my costs already include shipping because once I get it from the store the cost to ship it to that store is already figured into that cost.

[SoulEvan]

If a record company sold the authentic, "luxury" CD's only at something like 6-7 dollars American they would make so much of a killing that almost nothing would have to be spent on marketing. The artists only make about 1 dollar off of each CD sold and news about the company's price would spread like wildfire.

[SoulEvan]

So, who wants to start a record company and start signing new artists? :D

[FreeFall]

welll. . lil face needs a name for his band.