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