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BMG to offer cheap CDs
July 6, 2004
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Bertelsmann, or BMG, is to introduce a three-class system of CDs.

The music giant, whose artists include Christina Aguilera, Dido and Foo Fighters, will begin the system next month. Customers will be given the option of purchasing a basic version of new releases for €9.99 ($12), down from the current average price of €16.99 ($21).

The basic version will be comparable to home-made CDs, as they will contain no cover or booklet. Only a title will be printed directly onto the CD.

A standard and luxury version of each new release will also be available for €12.99 ($16) and €17.99 ($22) respectively.

The German music industry witnessed the worst of the global slump in CD sales. The album market fell from 197m sales in 1997 to 134m in 2003.

However, the Germans have shown a keen interest in legitimate online music vendors, such as those provided by OD2. Despite the small selection of music available, online sales are now outperforming CD singles.

BMG believe that selling music online is still in its infancy. During the transition, BMG want to keep consumers purchasing music, rather than losing them to file sharing and other free sources.

“We must become customer friendly and offer music fans a broad choice. The music industry has sat motionless on its backside for far too long,” said Mr Steinkamp, head of BMG Germany. “The cheap version will be similar to a self-burned CD, with no cover and just the title printed directly on to the disk. That is our anti-pirate CD.”

BMG hope that the new strategy will increase CD sales by a quarter, although they are not certain of success and profits will be at risk.

“We might even lose money. But we have to finely tailor what we offer to the demand and try something new,” Mr Steinkamp explained.

This story is filed in these Slyck News categories
Unauthorized Distribution :: Digital Piracy

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