NPD Group: US CD Price Cuts Are Accelerating

NPD Group’s MusicWatch PriceLab latest information shows that US price cuts to CDs are accelerating. CDs in Q1 2004 were 4% cheaper than in Q1 2003. By Q3 2003, the prices had only fallen 1%, by Q4 2003 they’d fallen 2.5%.

This means that the average price of a CD in the US has fallen to US$13.29 (€10.90) from US$13.79 (€11.31) in 2003. Titles older than 18 months are cheaper still, averaging at US$12.99 (€10.65).

“There are several reasons for the accelerating decline,” according to Russ Crupnick, president of NPD Music. “First and foremost the recording industry has had to deal with a changing market over the past few years, which was fuelled in part by file-sharing. But the retail landscape has also changed, and consumers are increasingly exposed to everyday low prices or terrific discount offers. Everyone also recognizes the increasing competition for entertainment dollars, as DVDs and video games are growing at double digit rates. These situational factors are causing the industry to reduce rethink pricing.”

NPD Group

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Fraser Lovatt

Fraser Lovatt has spent the last fifteen years working in publishing, TV and the Internet in various capacities, and believes that they will be seperate platforms for at least a while yet. His main interests at the moment are exploring where Linux is taking home entertainment and how technology is conferring technical skills on more and more people. Fraser Lovatt was born in the same year that 2001: A Space Odyssey was delighting and confusing people in the cinemas, and developed a lifelong love of technology as soon as he realised that things could be taken apart, sometimes put back together again, but mostly left in bits or made into something the original designer hadn't quite planned upon. At school he was definitely in the ZX Spectrum/Magpie/BMX camp, rather than the BBC Micro/Blue Peter/well-behaved group. This is all deeply ironic as he later went on to spend nine years working at the BBC. After a few years of working as a bookseller in Scotland, ("Back when it was actually a skilled profession" he'll tell anyone still listening), he moved to England for reasons he can't quite explain adequately to himself. After a couple of publishing jobs punctuated by sporadic bursts of travelling and photography came the aforementioned nine years at the BBC where he specialised in internet technologies and video. These days his primary interests are Java, Linux, videogames and pies - and if they're not candidates for convergence, then what is?