Hey, Found it -- here's the abstract. Now I see that the people advancing the viewpoint that it would hurt the little guy were actually execs at other corporations. But it explains the whole promo budget thing. BUSINESS/FINANCIAL DESK | September 5, 2003, Friday Music Industry Ponders Costs Of Steep Cut in Prices of CD's By DAVID D. KIRKPATRICK with CONSTANCE L. HAYS (NYT) 901 words Late Edition - Final , Section C , Page 2 , Column 5 ABSTRACT - Universal Music Group's decision to lower prices of its compact discs leaves rest of music industry scrambling to respond, with some arguing that long-term effects could hurt struggling specialty chains and independent music stores and favor discounters like Wal-Mart; other side of Universal's price cut is simultaneous cutback in payments company makes to retailers for shared advertising and in-store promotions; executives at rival labels say those cuts will hurt small stores, which rely on payments, more than major chains, which have lower costs and more bargaining power; music industry executives say companies like Universal typically offer stores about $1.20 in promotional subsidies for each CD sold to retailers for $12; Universal will keep $1.20, but lower wholesale price to $9, instead of $12; representatives of other major industry players say they will defer judgment on Universal's pricing plan; Warner Music spokeswoman Dawn Bridges says company has no specific plans to do something about its pricing policy; EMI and music division of Sony Corp decline comment (M) ----- Original Message ----- From: "zampino" <zampino@squidco.com> To: "Dave Smey" <dsmey@mindspring.com>; "zorn" <zorn-list@lists.xmission.com> Sent: Friday, September 19, 2003 11:05 AM Subject: Re: universal agreement
Is that NY Times article online? I've looked through their music section and used their search engine but haven't found the article.
Thanks, philz
On 9/19/03 7:16 AM, "Dave Smey" <dsmey@mindspring.com> wrote:
It also seems inportant to understand that both the big chains and small guys are already highly dependant on manipulative fees for product placement in the stores... Indeed, in the NYTimes coverage of the Universal price cut, the author claimed that smaller stores were bummed because their promo budgets were getting slashed as part of the deal. These provisions in the contract are clearly Universals attempt to somehow retain the control they used to buy with straight-up cash.
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