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The people that bought Pete Yorn or John Mayer last year are looking in the bins for something else to buy right now. GIVE IT TO THEM! Live stuff. Outtake stuff. Radio on-air stuff. It is found money.

SONY MUSIC GETS IT

Don VanCleave of CIMS Sings the Praises of Varying Price Points
Last week on the site (and this week in the mag), we asked some people who know what they’re talking about (as opposed to us) to weigh in on the hot-button issue of CD pricing ("The Price Is Right," 5/16). Among those who offered their opinions was the ever-articulate and frequently provocative Don VanCleave, who heads up the Birmingham, AL-based Coalition of Independent Music Retailers. To advance the dialogue, we asked Don if we could borrow his latest thoughts on the subject, which he’d disseminated to his mailing list earlier today, along with the CIMS sales chart.

I know that every distribution company is working with labels to respond to what the marketplace is telling retail. The collective cry is that not only are CDs perceived as too expensive but that we need more price points for music. Right now, we are telling kids that they either need to spend $18.98 or go find a burn or file to trade. That is stupid. We have to fill our bins and endcaps with affordable product or we are collectively screwed. Retail thinks this is obvious.

Well it looks like Sony Music also thinks this is obvious. This company is getting ultra-aggressive with its price points. And I think they are being smart about how they do it. For example, Columbia is introducing the "Right Tracks/Right Price" CDs at a $8.98 list price. These CDs will include six or seven songs from new and established artists. I think that it would be great if they used this price tier to feed the early adopters new product to purchase. You know, the people that bought Pete Yorn or John Mayer last year are looking in the bins for something else to buy right now. GIVE IT TO THEM! Live stuff. Outtake stuff. Radio on-air stuff. It is found money. Don't market it, just ship it. And it will not remotely hurt sales of the full length. It will just feed the buzz and further develop the artist. And retail would be idiots not to embrace it.

Columbia is also introducing a remix line at $8.98 mostly from Urban artists. They have artists like NAS, Cypress Hill and Jagged Edge lined up. Killer!!! Even more exciting is Epic Records’ plan to go full bore into the single DVD business—mixed in true 5.1 sound and containing videos, making of the video, EPKs, they will generally run about 30 minutes. Oh, at a $9.98 list price. I think that by judging what happened with the surprising success of the Mudvayne DVD, they are on to an exciting new product line. People really want this stuff!!

In addition to these cool new items listed under the magic $10, the Sony labels are putting out tons of new releases for under a $13.98 list. Titles like Ruff Endz, Our Lady Peace, Lil’ Bow Wow's new soundtrack release. Not only stuff you have never heard of, but real releases. Hell, the Our Lady Peace record is their FIFTH release.

It also looks like Sony is going to play around with the rebate game on some big upcoming titles. The jury is still out on whether this is a pain in the ass. Obviously, the success of the UMVD rebated titles are turning heads throughout the industry. The simple solution would be to just lower the price point and not make everyone jump through administrative hoops to get discounts. But, the big entertainment companies can't cross that line internally right now, so we will definitely take what we can get.

So, in closing out, we have two themes to consider. First, the content companies HAVE to offer our customers choice across the price spectrum. These companies also have to feed fans more often. Don't force fans to go to peer-to-peer services to find content. That is your job and our livelihood. Looks like Sony is getting that point. Second, the retail community HAS to embrace these experiments in the proper spirit. Price savings from rebates have to be passed to the consumers. Also, we can't expect these new price-point items like remixes and EPs to gain any traction if the buy-ins and in-store marketing are tied to some out of control new co-op program. On these items, we have to make our money on margins and on reality.

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