Students strapped for cash usually have to think carefully about how to spend their money. Twenty dollars could pay half of this month’s electricity bill. It could buy 200 miles worth of gas or go toward doing 11 loads of laundry. Or, that $20 could buy just one CD from most record stores. Universal Record’s recent CD price cuts may change that.

Universal announced a plan to lower CD list prices from around $18 to $12 – almost a 33 percent drop. The plan is a response to a decline in CD sales and increasing complaints from retailers about the high price of CDs. The initial reports from major news sources stated that independent retailers were angry when they realized that the wholesale price would only drop about $2, or 10 percent, effectively squeezing their already tight profit margins.

However, many independent record stores in Upstate New York that specialize in carrying greater variety in punk, indie-rock, rap, blues and oldies are hoping the changes will have positive results on their business.

‘I think the price cuts are a positive thing, absolutely,’ said Music Shack owner and manager Rocky Rorry, who notes that many young music fans have not been able to afford the $18 for a single CD.

Scott Ressler, a senior television, radio and film major, says he has not bought a CD in years.

‘I could not believe how expensive CDs had become,’ he said of a trip to a nearby music store. ‘I can’t afford to pay that much for music right now.’

In past years, record companies have seen drastic drops in CD sales due to high album prices and the availability of music on the Internet.

Rorry, who has owned the Music Shack in Albany for 33 years, feels the lowered prices will help students like Ressler afford CDs. This may consequently help records compete with the Internet and CD-burning.

As for the tightened profit margins, store owners disapprove of the edge the cuts will give to the larger chains, but they are looking at ways to work around Universal’s plan. Some have entertained the idea of selling blank CDs or T-shirts to make up for the profit loss in Universal sales.

Soundgarden manager Mike Hentz points out that for stores like Target and Best Buy, these extras are what give them the advantage.

‘In [the bigger stores] music is a draw to get customers in to buy something like a washing machine,’ Hentz said. ‘So they can take a hit in CD sales and make up for it somewhere else.’

Local independent stores, like Sounds Fine Records in Ithaca, don’t always have the same luxury. Owner and manager Rick Hofkins says he may respond to the margin cuts by shrinking his in-store availability and relying more on special orders.

‘With such a tight profit margin you can’t have 10 copies of a Jimi Hendrix album in stock,’ he said. However, Hofkins points out that one of the advantages of shopping at an independent store is better customer service, so special ordering a CD would not be a problem.

But some local music storeowners are skeptical that the Universal margin cuts will make any difference at all. At Soundgarden, Hentz points out that although Universal is the largest of the top five music labels and controls over 50 percent of the market, it is only one label. Much of the store’s stock is made up of independent labels that, according to Hentz, are staying tough on prices.

So far, none of the other major labels have followed suit. This leads owners like Biff Pock of the family-owned Blue Note Records in Albany to doubt Universal’s ability to influence price cuts across the board.

‘It’s a nice advertising point,’ he said. ‘But we’ll see if [Universal] can actually do what they say they are going to do.’

If other labels do not choose to follow suit, and prices remain high, the record industry may loose the already waning loyalty of young buyers and seriously endanger the bottom lines of all record stores.

Many believe that Universal’s price cuts are only a small step in regaining sales – and possibly a step in the wrong direction.

Senior music industry major Jenna Gilfoil feels that Universal’s new plan is a short-term solution. If the label wants to see results in the long run, she said, they need to start looking to new music technology.

‘It seems like the business is scared to move toward the Internet,’ she said. ‘They’re busting their heads open for a solution and they don’t see that the answer is the Internet.’

Since the Recording Industry Association of America’s recent barrage of lawsuits against file-sharers, many labels have agreed to make their music available on the Internet for a low price.

Apple headed up the experiment with its iTunes service that sells individual songs for 99 cents. The program has been so successful that the company plans to offer iTunes to Windows users this week, according to The New York Times. Napster will follow Apple’s success at the end of October, making albums available to download for $9.95.

101.5 ‘The Dog’ DJ Bob Schmidt agrees that giving the customer a choice between buying an entire album or a single song is a good move for the record companies.

‘Giving people a choice puts the power in the hands of the customers,’ he said. ‘Labels [like Universal] need to stop strong-arming customers into buying entire albums.’

Some artists, tired of paying for high-priced CDs and not willing to overcharge their fans, have chosen not to sign with a record label at all. By cutting out the middleman, these independent bands are able to sell their CDs at shows for much less money.

Senior Scott Wiener, promoter for Planet 505 and drummer of Martha Dumptruck Massacre, says that most independent bands charge barely more than they paid to have CDs made. Fans end up paying around $5 for a CD, instead of $18.

However, Wiener doesn’t disregard the importance of independent stores like Soundgarden. Unlike the big chains, indie stores have more loyal customers interested in listening to more obscure music unavailable at other stores.

Although the results of Universal’s price cuts remain to be seen, it seems that for now independent music stores and owners like Rorry will be able to remain afloat.

‘Independent stores just need to hold their course,’ Rorry said. ‘We’ve got a good thing right now in concentrating on the niches that allow us to survive.’

Published on October 14, 2003 at 12:00 pm