• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Discusion of - Lower Prices on Universal releases should surface by Christmas. The Star Tribune (Minneapolis). 9 October 2003.

Extracts from this document...

Introduction

Economics Article #3 Aakash Dheer October 14, 2003 Syllabus Section: 2 Reinan, John. Lower Prices on Universal releases should surface by Christmas. The Star Tribune (Minneapolis). 9 October 2003. Essence of the Story Universal Music, the world's largest music company, is planning to reduce music CD prices from about $18.99 dollars apiece to $12.99. This is a major slash in prices, over 30%. None of the other 4 major music companies (Sony, EMI, Bertelsmann AG, or Time Warner) has promised to lower prices. This strategy is obviously an attempt to lure more customers into the record stores and get them to buy more CD's, as the music industry has suffered tremendously in terms of sales since the popularity of online file trading tools like Kazaa has increased. ...read more.

Middle

Fig 1 shows the equilibrium price1 diagram of CDs. If the price of CDs is low, as at Point A, the number of sales will be high, as at Point B. On the other hand, if the price of CD's is high, as at Point C, the number of sales will be low, as at Point D. Many people, including myself, do not buy CDs because of the very high price that is charged for them. They do not consider the cost of the CDs to equal or outweigh the benefit. If more people start to feel this way, sales will obviously go down, and will plummet further because of how easy it is to download high quality, sharable songs for free. ...read more.

Conclusion

Potential customers also avoid paying almost $20 dollars for a disc that they will only enjoy one song from. Instead, they can easily get on to a file sharing tool like Kazaa and download songs for free, like millions of other people. Universal Music is taking a step in the right direction by lowering their prices, but we do not quite know whether the prices are low enough. The companies will have to adjust their CD prices by trial and error until we reach the equilibrium price for CDs, where both the music companies and customers believe that they are receiving a benefit greater than or equal to their cost. 1. Equilibrium Price - The price in a market of good where the price set by the producers equals the demand of the consumers. Word Count: 492 (515 including footnote) ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Music section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Music essays

  1. File Sharing.

    Quite recent examples include the change from Long Plays to Tapes or 8-Tracks with a much greater acceptance to tapes. Tapes then moved away to allow Compact Discs to appear which seems to be letting MP3 players into the market. In May 1999 two American students (Shawn and John Fenning)

  2. Critical Evaluation part 1,2 & 3

    MTV was launched in 1987 and in 1975 the first music video that was broadcast was Queen's "Bohemian Rhapsody". Our video involved a linear narrative as well as a strong performance element; these elements were vital because they keep the audience entertained.

  1. critical evaluation

    Every so often there was a continuous drumbeat of 8-10 beats within the space of 2 seconds, and we wanted to make this beat more noticeable by adding effects to the video. To do this we paused the video on the last shot before these beats kicked in, and zoomed in on the still picture, getting closer with every beat.

  2. Critical Evaluation

    To organize our selves and get the best out of the time we had with the equipment we planned each day thoroughly. We created shooting scripts, storyboards and treatments (all of which are in our appendix) to enable us to get each shot correct virtually first time as in industry

  1. The Impact of File Sharing

    In the USA, file-sharing activity between March and August that same year increased by 500%, according to Jupiter Media Metrix analysts. The massive as well as rapid increase in use of this new technology has increased the interest of some of the most important recording and producing media.

  2. "Conflict is universal and comes in many forms, the conflicts we face and the ...

    The son after many years of putting up with his father reign decides he must leave to find his place in the world. He feels caged by his father's opinions and views of him. The father tells his son he is not ready for the world and patronises his son

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work