... for music (in physical form i.e. CDs) as per the following extract from a recent article in The Economist:
"... A branch of zavvi, a music and video store that has also collapsed, is handling queues 20 people deep at its tills as shoppers rush to snap up discounted £2.99 albums ..."
The overall theme of the article was the sorry state of the retailing industry. Isn't the message however from the above extract very clear? the problem, people, is PRICE!
It would stand to reason that a price for CDs somewhere between the £2.99 that leads to stampedes but well below the former rack price is what is needed to sell in volumes. The higher volumes would in turn make even lower prices possible. While the retailers may be facing the brunt of this recession, the record/CD producing companies are certainly not immune to the effects. Increased online sales of music and over time video based media, will reduce distribution costs significantly and the sooner the industry realises that long term success rests with sharing the benefits with their customers the better. Similar issues affect other consumer focused industries as well.
A comment in passing on the cost of the inauguration earlier this week of the new US President. I'm told this was $45 million and over $120 million when the cost of security is included. Paid for by many of the same people that the same US Government criticises for bringing the financial industry and capital markets to their knees. What an opportunity missed to send out a message that the change promised during the campaign is real and the approach of the new Administration is "back to business"! Don't you agree?