– Major record label Universal Music Group plans to test a new pricing scheme
for CDs this year that will see discs priced between $6 and $10 at retailers,
Billboard reported, citing sources.
The "Velocity" program will see
"most" new releases from Universal artists sold at the discounted
Universal also plans to increase production of "deluxe" album
releases at higher price points.
According to Billboard’s sources, the discounted
CDs will carry a 25% profit margin, meaning CDs priced $10 at retail would
wholesale for $7.50.
"We think [the program] will really bring new life
into the physical format," Universal Music Group Distribution president
and CEO Jim Urie told Billboard.
Commenting on Universal’s plans, Rachelle
Friedman, chairman of the National Association of Recording Merchandisers
(NARM), said, "Universal’s bold move will draw positive reaction from both
stores and fans."