Sony Music Slashes Its Music DVD Prices9 Feb, 2004 By: Erik Gruenwedel
To help jump-start music DVD sales, New York-based Sony Music Distribution is cutting retail prices up to 50 percent on more than 40 DVD titles. The new prices, which range from $19.98 to $9.98, take effect Feb. 9 and include material from artists AC/DC, Aerosmith, Tony Bennett, Celine Dion, Gloria Estefan, Good Charlotte, Benny Goodman, Jennifer Lopez, Meat Loaf, Pearl Jam, Rage Against the Machine and Sade, among others.
A Sony spokesperson confirmed the new pricing structure but declined to comment further.
Sources familiar with the company say retailers are being encouraged to support the new pricing through incentives that include free product on new orders, aggressive consumer co-op print ads and cable TV spots.
Reports have suggested that Sony overshipped DVD product during the holidays, and rather than face returned inventory from retailers pressed to move titles in a market under siege from Internet piracy and indifferent consumers, has opted to combat the DVD format's shorter shelf life (compared to CDs) with restructured pricing.
Faced with fickle consumers, music DVD titles need to drive volume to secure retail space, insiders say. That's a challenge, considering experts say consumer knowledge of music DVD is low compared to DVD movies.
“If you don't step up and get this product in front of consumers with a sharper price, [they] won't even know it exists,” a source familiar to the strategy said. “Awareness of music on DVD is about as low as it can get. Most people who buy music on DVD find out about it when they are in the store. It's not a planned purchase.”
BR>Despite varying levels of consumer knowledge of music DVD, experts say Sony's DVD price of $14.98 on select titles has already been successful.
“[They] are up 2 million DVD units in the [fiscal] 2003 year,” said one source. “You can't really measure the shelf life of a music DVD because Sade's Lovers Live came out two years ago and people are only discovering it today. And price reduction is one way to get [their attention].”