POP BEAT : PRICES RISE FOR ALBUMS, CASSETTES
Record prices, relatively stable in recent years, are creeping up again.
Since record companies have raised their wholesale prices from 30 cents to 60 cents per title in recent weeks because of rising costs, many retailers are charging anywhere from 30 cents to $1 more for pop albums and cassettes.
That means many stores, which have generally been discounting key new releases to $5.99 for the last five years, have lifted that figure to $6.99. Non-sale albums, formerly going for $7.99, have been hiked to $8.29 or more.
Alan Schwartz, director of creative marketing for Show Industries, which owns the 38-store Music Plus chain, is one of several area retailers who’s unhappy with the wholesale boost.
“It comes at a tough time,” he said. “There hasn’t been such a wonderful slew of great releases that the business is just booming.”
Schwartz said Music Plus is holding the line on record prices. “It’s hard to ask the consumer to continue to pay more and more,” he said. “It seems to me the more you raise prices, the more you’re giving them reasons to choose other entertainment options.
“Labels have talked a great deal about how concerned they are with breaking new artists and trying to get new blood into the industry. Part of how you do that is with price. I think $7.99 or even $6.99 is a lot to ask somebody to pay to take a blind chance on a new artist.”
Record companies, however, are quick to defend the hikes.
Bob Altshuler, vice president of press and public affairs for CBS Records, the nation’s leading record manufacturer, stressed that the company’s recent wholesale price hike--amounting to 3%--was its first in five years.
“This industry has been reluctant to make any price increases,” he said. “And when it has been required, it’s only because the pressure of manufacturing, marketing and recording costs can no longer be absorbed.
“From a pricing standpoint, records and tapes remain probably the best bargain of all the entertainment possibilities. When I think of the difference in the cost of books and the theater, there has been a much greater percentage of increase in everything else than with records and tapes.”
Randy Gerston, marketing director for the 34-store Licorice Pizza chain, said his company continues to sale-price $8.98-list albums at $5.99 but has raised the charge for non-sale merchandise from $7.99 to $8.29.
“Consumer awareness is based on sale price, not shelf price,” he said. “A lot of consumer awareness is what they see in the ads and the giant signs when they walk into the store: Do they see a lot of $5.99 or a lot of $6.99? We’re trying to be out there with as much $5.99 as we can--making almost no margin.”
While critical of the boosts, several retailers expressed relief that record labels didn’t make the more sweeping change of increasing the standard “suggested list price” from the current $8.98 to $9.98.
Though labels have applied the $9.98-list for the last three years to sound tracks and superstar albums, they’ve been reluctant to make it the industry standard because of anticipated consumer resistance.
Henry Droz, president of WEA (Warner/Elektra/Atlantic) Corp., said the three WEA record labels may release a combined total of 15 to 20 albums this year with a $9.98-list price, up from about 10 last year. But he added that he foresees no move to a $9.98-list standard.
“I don’t think the market would bear it at this time,” he said. “For one thing, the business is really just coming out of an early ‘80s slump. We’ve had some exceptional years (since 1983), and we don’t want to disturb that resurgence.
“Also, we’re concerned with home taping. The greater the disparity between the cost of taping and the cost of purchasing a cassette, the greater the attraction of home taping. That’s a constant concern and threat to us.”
Richard Susser, an administrative assistant at Sacramento-based, 36-store Tower Records, said the industry should also heed the growing popularity of compact discs, most of which list for $15.98 but are generally discounted from $1 to $3.
“If the price of records and cassettes starts creeping up real close to what compact discs are selling for, I think the bottom will fall out of the black vinyl and cassette business and people will just switch over to CDs,” Susser said.
LIVE ACTION: Tickets go on sale Monday for the Art of Noise’s July 31 show at the Pacific Amphitheatre. The techno trio will also be at the Palace July 29. . . . Tickets will also be available Monday for these shows: UB40 Sept. 16 at the Greek and Sept. 20 at the Pacific, Bruce Cockburn July 18 at the Wiltern, Jimmy Buffett July 29-30 at the Greek, and Smokey Robinson Sept. 11-12 at the Greek. . . . Tickets go on sale Sunday for three Universal Amphitheatre shows: a New York doo-wop lineup Aug. 3, Chuck Mangione Aug. 8 and Steven Wright Aug. 9; also on sale Sunday is Oingo Boingo’s Sept. 13 date at the Forum Concert Theater and Simply Red’s July 24 show at the Santa Monica Civic.