BMG to punt cheap, no-frills CDs

German bid to extinguish home burning

From next month record company BMG will introduce cut-price and luxury versions of the same CDs in Germany in an attempt to boost record sales, CEO Maarten Steinkamp told Der Spiegel.

The no-frills version, which Kleinkamp calls "an anti-piracy CD", will look identical to a home-burn CD, with just the title on the disc. Consumers only have to pay €9.99 for a copy, about half the price of a regular CD, which typically retails for €19.99 or more.

A full-fat version, with cover and lyrics, will cost €12.99, while a luxury version with added value (additional material or DVD video) will go out for €17.99. Kleinkamp hopes consumers are willing to buy a legal copy of a music CD for a reasonable price, rather than burning an illegal copy.

Kleinkamp, who started his career at BMG Netherlands, is one of the few record executives willing to admit that his industry "sat motionless on its backside for too long". And BMG, like most other major record companies, cannot sit still much longer. German record labels have seen sales plummet a fifth since 2000. Last month the music arm of the Bertelsmann group announced a major housecleaning at the German division with over 60 per cent of its German artists leaving. 85 per cent of the new releases by BMG Germany's national artists sold fewer than 25,000 copies, a statistic Kleinkamp deemed unsustainable.

Sony, the company BMG is preparing to merge with, will also sells cheap CDs in Germany this Autumn, Der Spiegel says. Last year Universal Records lowered its CD prices in the US with 30 per cent to $12.98 (€10.55), but that had hardly any effect on record sales. ®

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