Universal Music Group, the company that controls about 30% of the legitimate music business in the United States, has announced that they are reducing the price of their CDs by as much as 30%. With similar moves expected by other labels and retailers, CDs may cost as little as 50% of their current price in just a short time. Expect similar price cuts from pay-per-song retailers like iTunes and BuyMusic.
Universal dropped the price in response to the overwhelming pressure from peer-to-peer file-swapping networks that the company says are responsible for the flagging sales of their artists’ albums.
Some commentators have speculated that this is the beginning of the end for not just music labels like Universal, but for music as we know it. Without profit, they argue, there is no incentive to produce music, and with little profit nothing but bad music will be created. Others counter by saying that there is little in the way of good music being produced anyway, and that P2P systems have acted as a sort of “corporate disobedience” that forced record companies to drop price-fixing schemes. With the reduction in price, perhaps more people will be willing to pay for higher quality recordings and extras on a CD, and not P2P as much. And perhaps the reduction in price will actually encourage more artists to self-publish and reduce the role of record labels in deciding who will be tomorrow’s “american idol.” Of course, some think there’s no room at all for music labels in the traditional sense, now that the cat is out of the bag with P2P file sharing, and that the demise of the record companies is only a few years away.
What do you think? Is this the first sign that record companies are going under, or will they survive in some mutated form? Is the price drop going to change your music buying/downloading habits? Will the end of record companies mean “good” music like Justin Timberlake will get lost in the quagmire of independant artists? Or is all this just a temporary fix until the record companies force Congress to enact even tougher standards to combat music piracy? Leave a comment about what you think the future of music is…