CDs or DVDs: 2 for $25

March 30, 2004 6:45am by Barry Ritholtz

Altitunes is a Music retailer located almost exclusively in airports. Not exactly the most competitve of retail spaces — captive audience and all that.

The one non-airport location is Grand Central Station — right across from my office. I walk by it a few times aweek. Their latest promotion is 2 CDs or DVDs for $25.

This may not be the best pure sale prices — Target regularly runs $7.99 CD and $9.99 DVD sales, and this week, Best Buy is advertising a “3 DVDs for $20 sale.”

But it points out an interesting conundrum facing the music industry: The competitve pressures they have been facing from the Film industry are actually increasing.

If DVDs — with 2+ hours audio/video, plus many extra features, interviews, fan items — can be sold at the price point of 3 for $20, then why can’t CDs? Even if the BestBuy promotion is a loss leader (I’m not sure it is) — there is something unequivocally broken about the CD pricing model.

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BusinessPundit commented on Mar 31

Does the Entertainment Industry Get It?

Barry Ritholtz has a nice pair of posts on Atlitunes, which rents CDs or DVDs, and DVD station, which rents DVDs for a buck. Maybe…

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Rally Follow Up

DVD rentals: $1

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