Record Prices Rise Again | Music Sidebar | Chicago Reader

Record Prices Rise Again 

Sign up for our newsletters Subscribe

The leaves are beginning to turn, the holiday buying season is approaching, and the fancy of a strapping young international record conglomerate is turning to--raising record prices.

Reprise, Neil Young's record company, has been taking full-page ads out in Billboard, announcing in mock horror that he's refused to promote or tour behind his new album, Sleeps With Angels. But WEA, the distribution arm of Warner Brothers, which owns Reprise, is getting its own back with a $17.98 list price, up one dollar from the $16.98 list that has characterized big-artist releases over the past 18 months or so. (These and all prices below are for compact discs.) Similarly the Eagles, buoyed by the agreeably ovine response of consumers toward their $100-plus concert tickets, will see a similarly priced sticker on their upcoming Hell Freezes Over reunion album on Geffen. A forthcoming Aerosmith greatest-hits package (also on Geffen) will carry the same list--which is even sleazier seeing as how the band didn't actually have to record anything for it.

These releases will certainly be joined by others as the Christmas season looms. Price-increase cycles in the industry have always worked this way: so-called "superstar" releases soften up retailers and consumers, and then most new releases up their prices to the new standard, and then catalog titles continue the trend. The major labels are assisted in this almost annual ritual by two factors: one economic, one social.

The economic factor is that consumers don't really pay list prices. A dollar increase in list price actually translates to about a 50-cent increase in wholesale price to retailers; that's the increase that eventually affects the price consumers pay. But trade magazines and retailers list prices in order to avoid a bald statement of wholesale costs. In very rough figures, a $10 wholesale price equals a $15.98 list, $10.50 a $16.98 list.

Accordingly, the wholesale price to Chicago's Tower Records is just under $11 for the new Neil Young album. The store's record sales manager, Joe Kvidera, notes that a year ago $16.98 was reserved for the Madonnas and Garth Brookses of the world. "Now, anything with any chance of selling is coming out at $16.98," he says. "That used to be the 'superstar' price. Now there's a new supersuperstar pricing [$17.98]. And yet consumers are being told that prices are coming down because retailers are taking a loss." Kvidera is referring to the price war between traditional retailers like Tower and Rose and your Best Buys and Circuit Citys, which often sell below wholesale price.

The social factor is the linchpin of the record companies' strategy. Simply put, when fans of a particular artist want a new album, price just isn't an object. Hence the "superstar" strategy. It should be noted that there are a lot of groups who've kept their prices down. The Offspring, proudly punk and proudly indie, have a top-ten record with a $14.98 list price. Green Day's Warner debut has a $15.98 list. Peter Gabriel has a new double live CD listing for $19.98. But for dozens of other groups whose fans the record companies figure will take it, it's been $16.98 for the past year: Soundgarden, Stone Temple Pilots, Nine Inch Nails, the Rolling Stones.

"People still buy it," notes Kvidera. "If they want the new Pearl Jam, they're going to buy it."

Hitsville was surprised at the mention of Pearl Jam--wouldn't the band, currently involved in a holy war with Ticketmaster over concert-ticket prices, be at the forefront of keeping record costs reasonable? "We'll see," shot back Kvidera. The source of his cynicism: the list price of the band's records, both the recent Vs. and the 1991 debut, Ten, is currently $16.98. (Nirvana's Nevermind, released the same time as Ten, remains at a $13.98 list.) What's up with that? "I didn't know," sighs Pearl Jam's manager, Kelly Curtis. Worse, there wasn't much the band could do. "We don't have much control over it," Curtis confesses. "And even if we did it's still a problem, because the retailers will just sell it for whatever."

Of course the bands' royalties are set, so the record companies end up mainlining the extra cash that accrues with price increases. And since most of the acts involved are multiplatinum artists, that 50 cents per album turns into a lot of money quickly. Curtis promises Pearl Jam will bring the matter up when they meet with Epic in New York next week to discuss their upcoming third album. But he sighs again at the myriad ways the industry has for separating fans from their money: "We're trying to take it one issue at a time." Neil Young's manager didn't return a call for comment.

A final twist on industry pricing: Classical titles, like sound tracks, are traditionally priced a dollar more than those by top rock acts. But for Three Tenors in Concert 1994--the album chronicling the Pavarotti-Domingo-Carreras Dodgers Stadium gig--middlebrow classical-music fans are getting hit with a $19.98 list! "Traditionally," Kvideras says, "record companies have said these are specialty markets; they had to charge more because they had less sales. On the other hand, their justification for the superstar artists is that more people want them, so they charge more for that, too."

Art accompanying story in printed newspaper (not available in this archive): photo/Yael Routtenberg.

Comments

Subscribe to this thread:

Add a comment

More by Bill Wyman

Agenda Teaser

Music
Acid King, Rezn, Inebrium Reggie's Rock Club
September 22
Music
September 22

Tabbed Event Search

Popular Stories