Garth Ropes a Record Price Tag : Compact discs: The head of CEMA Distribution blames the hike to $16.98 on rising costs and superstar deals. Tower Records calls it ‘pure and blatant greed.’

Garth Brooks, the first country artist ever to have an album enter the pop charts at No. 1, is about to rewrite pop history again--but he’s not happy about it, and neither are many of the nation’s retailers.

On Sept. 22, Brooks’ new “The Chase” CD on Liberty Records will hit the stores with a $16.98 price tag, $1 more than the previous ceiling. The move--which does not apply to Brooks’ just-released Christmas album, “Beyond the Season”--could lead to an across-the-board increase in the cost of top-line CDs.

“Garth thinks that because the economy is down, that prices should be kept down,” said Patsy Cox, a spokeswoman for Doyle-Lewis Management, the Nashville firm that manages Brooks, who was the best-selling recording artist of 1991. His previous album, “Ropin’ the Wind,” has sold nearly 8 million since its release in the fall.

“Garth hates to price anything out of reach of his fans, especially during economic times like these. But, unfortunately, he has no control over pricing of any kind. That’s a record company decision.”

And Brooks isn’t the only one protesting the decision by CEMA Distribution--the Los Angeles-based firm that distributes Liberty, Capitol, EMI and Virgin Records--to institute the $16.98 price on CDs by its biggest-selling artists.

Recession-pinched merchants, who in recent months have called on record companies to slash prices to stimulate business, on Tuesday also questioned the upping of prices on CDs in the middle of a sales slump.

“It only takes one word to sum up this price increase: Greed!” said Russ Solomon, president of the 73-store, Sacramento-based Tower Records. “That’s all it boils down to here. Pure and blatant greed.”

“You really have to question the timing of this price increase,” added Arnie Bernstein, president of the 1,000-outlet, Minneapolis-based Musicland, the largest retail chain in the nation. “Philosophically, it’s not entirely wrong to think that a new album by the biggest star in the business should command a premium price tag. However, CD PRICESgiven the condition of the economy, you have to wonder why anyone would choose to raise prices now.”

CEMA President Russ Bach defended the price increase as part of a price restructuring to fight inflation and help defray spiraling record company costs for cash advances, recording fees, videos and marketing budgets of superstar albums.

To offset the price hike, Bach said, CEMA intends to reduce the price of CDs by new and developing artists to as low as $9.98 suggested retail. Also, CEMA will not raise the suggested $10.98 retail price for the cassette version of superstar albums.

“We have a business to run here,” said Bach. “Inflation has taken its toll on the industry. It’s time to face the facts. Thanks to superstar deals, our costs have gone up, and prices on our top-line artists have to go up for us to maintain our profit margin. That’s just the way it is.”

Bach said he does not believe that $16.98 is an unreasonable amount for consumers to pay for superstar CDs. To the contrary, he argued that the retail price of recorded music in real inflation-adjusted dollars is at least 30% cheaper than it was seven years ago when CDs were introduced.

Record store owners and consumer advocates disagreed that the price hike is necessary to maintain CEMA’s profit margin.

They argued that manufacturing costs for compact discs have plummeted in the past decade and that record companies will reap even greater profits next year when they phase out the environmentally incorrect cardboard long box, which added 50 cents to the cost of a CD.

“This is real bad news for consumers,” said Pete Howard, editor of the International CD Exchange (ICE), the nation’s largest CD-audiophile newsletter. “It’s like this company is saying to music lovers, ‘Let’s see just how much consumers can take. Let’s see how far we can push them.’ ”

Although CEMA’s five competitors--WEA Corp., Sony Music Distribution, PolyGram Group Distribution, Bertelsmann Music Group and MCA--each have raised the wholesale price of their superstar CDs a few pennies per unit in recent months, officials at those firms say they have no immediate plans to follow in Bach’s footsteps.

“The price on Garth’s new CD certainly establishes a new plateau in pricing,” WEA President Henry Droz said. “I don’t know how many artists at this point in time fall into his category, who could command that much. But if there’s anybody out there who can do it, it’s Garth. He’s red-hot right now.”

Retailers point out that record companies already charge them $3.75 more for the same music on CD than on cassette, even though the unit manufacturing and distribution cost for CDs is only about $1 more than for cassettes.

Compact discs, industry sources estimate, cost companies about $6 a unit to make and distribute. Most record labels charge retailers about $10.30 for a CD. The companies sell cassettes, which cost about $4.75 to make and distribute, to retailers for about $6.50.

Typically, new CDs are heavily discounted during their initial weeks in the store--so that consumers would expect to pay $11.98 to $12.98 for a $15.98 release. After a few weeks in the store, however, the discount is eliminated. Presumably, the stores--whose wholesale cost of the albums will jump from $10.30 to $10.70 per CD--will now charge an extra dollar.

“The worst thing about this price increase is that it sets the stage for a very bad trend,” said Tower Records’ Solomon. “If they succeed with this, it won’t be long before all the rest of the big companies follow.”

* ORANGE COUNTY REACTION

Most CD buyers interviewed here express unhappiness but appear resigned to the increases. F2