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hbgator

Wed 05 Jul, 2006


CD format gets a "reboot" from Universal Music

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The world's biggest record company is not ready to give the compact disc up for dead just yet,<b style="color:#FFA34F"></b> and is giving the venerable music format a revamp.<b style="color:#FFA34F"></b> <b style="color:#FFA34F"></b>
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Universal Music Group,<b style="color:#FFA34F"></b> home to artists such as U2 and Mariah Carey,<b style="color:#FFA34F"></b> is rolling out three new tiers of CD packaging in Europe,<b style="color:#FFA34F"></b> ranging from lush deluxe editions down to bare-bones cardboard sleeves that are designed to compete with albums sold online.<b style="color:#FFA34F"></b>
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Despite the hype about online music stores like iTunes,<b style="color:#FFA34F"></b> the huge majority of music is still sold on CDs,<b style="color:#FFA34F"></b> usually inside the <b style="color:#FFA34F"></b>"jewel boxes"<b style="color:#FFA34F"></b> that have been around for decades.<b style="color:#FFA34F"></b>
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<b style="color:#FFA34F"></b>"We thought we should reboot the consumer's experience of buying CDs,<b style="color:#FFA34F"></b>"<b style="color:#FFA34F"></b> said Max Hole,<b style="color:#FFA34F"></b> executive vice president for marketing and A&R at Universal Music Group International.<b style="color:#FFA34F"></b> <b style="color:#FFA34F"></b>"Ninety percent of what we sell is physical goods,<b style="color:#FFA34F"></b> and the CD hasn't had much of a revamp in the last 20 years.<b style="color:#FFA34F"></b>"<b style="color:#FFA34F"></b>
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The middle tier of Universal's CDs will be sold in a new <b style="color:#FFA34F"></b>"super jewel box"<b style="color:#FFA34F"></b> designed to be stronger and more durable than the standard jewel box.<b style="color:#FFA34F"></b> Universal Music plans to absorb the extra manufacturing costs,<b style="color:#FFA34F"></b> estimated to be about 3 to 5 euro cents per unit.<b style="color:#FFA34F"></b>
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Although it does not set retail prices,<b style="color:#FFA34F"></b> Universal Music expects the deluxe CDs to sell for an average of 19.99 euros <b style="color:#FFA34F"></b>(<b style="color:#FFA34F"></b>$25.61)<b style="color:#FFA34F"></b>,<b style="color:#FFA34F"></b> the standard for 14.99 euros and the basic for 9.99 euros.<b style="color:#FFA34F"></b> The group is part of France's Vivendi <b style="color:#FFA34F"></b>.<b style="color:#FFA34F"></b>
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The basic package will be used to stimulate sales for catalog albums that have been on sale for a while,<b style="color:#FFA34F"></b> <b style="color:#FFA34F"></b>"similar to a paperback book,<b style="color:#FFA34F"></b>"<b style="color:#FFA34F"></b> Hole said.<b style="color:#FFA34F"></b>
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Universal Music expects digital sales to double to about 10 percent of its sales this year,<b style="color:#FFA34F"></b> with digital making up 25 percent of revenues by 2010.<b style="color:#FFA34F"></b>