Wal Mart Challenges The CD Price

March 5, 2008

walmart-karl-marx.jpg

Reuters reported
that Wal Mart is thinking about lowering the CD prices. For just $ 10 you will buy the top twenty, for $ 12 the current titels, the backcatalog starts already at $ 5.

Wal Mart was always a price leader in the CD market. They try to get more traffic with music products and maximize their profit with other products. If they want to hold this traffic they have to lower their prices in the current situation.

So music at Wal Mart was always something like a little bit “ad supported” or better said part of a bigger bundle. The problem for the music industry: Wal Mart has 22% market share. The whole market will drop the price. There will be a huge drop in revenues especially in a market segment of people who are not as price sensitive. On top the lower CD price will influence the album download price in the long term.

The pressure on the music industry to find fast a new online solution is increasing again.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: