Continuing to follow its motto to “roll back on prices,” Wal-Mart has announced that the company is dropping prices on its CD inventories. All top tier CDs will now cost $12, with the top 20 best sellers costing $10. Top catalog titles will now run you $12, with midline catalog titles costing $7, and budget releases at $5.
The new pricing scandal has created a great stir in the music community. But is this the beginning of the end of the music industry?
With more and more students loading their iPods with free downloads, do we really need CDs anymore?
Now Wal-Mart has been linked to just about every topic in business ethics, but it is really not doing anything wrong here. The company is lowering its prices to meet the decreasing demand in the CD market.
But what is there to be done about this situation?
The RIAA (Recording Industry Association of America) really has no control, because guess what? Everybody’s doing it. They can’t cuff everyone, especially as the trend becomes more and more prevalent every day.
But Wal-Mart does control the retail industry, with its tremendous capital and name recognition. Wal-Mart currently has 22 percent of the media market share. There will be many other record stores to follow the path of the “rollback king.”
Wal-Mart may be just the right prescription for the music market epidemic. With the return of the starving artist, the industry will have to change its roots if it wishes to remain in business.
The Bentonville, Ark., company noticed a tremendous decrease in its CD sales of the years, and said that action needed to be taken.
But the part that mainly has music buffs scratching their heads is the $5 and $7 CDs, which are typically older artists. This may have to do with a majority of the market shifting toward older consumers that don’t know how to download the new stuff.
Wal-Mart has used and tested (with success) the “pricing-tier system” in its DVD market sales. But its expectations in CDs seem to be limited to a realization that the demand for the item is dying rapidly.
What does this mean for the consumer? Well there is no longer an incentive to pay for something that you can obtain for free; on the other hand you’re supporting the music industry.
Wal-Mart will have to continue to lower its prices until the company meets the college kids’ (their much needed base of customers) willingness to pay.
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