Universal Music & Video Distribution (UMVD) will celebrate its Grammy-nominated artists in full-page newspapers ads starting Friday. However, the move could sound a sour note for some merchants, a
Universal Music & Video Distribution (UMVD) will celebrate its Grammy-nominated artists in full-page newspapers ads starting Friday. However, the move could sound a sour note for some merchants, as the spots will include the $12.98 "JumpStart" list price.
The ads will likely describe the $12.98 price point as "manufacturer's suggested retail price" (MSRP); they might carry small print explaining that the price may not be offered at all merchants. But this is not going to soothe retailers, who say they fear customers will come to stores and demand the $12.98 CDs. In fact, one chain executive says the ads will likely "reignite bad feelings toward JumpStart."
"I am sorry if some retailers are annoyed; that is not our intention," UMVD president Jim Urie tells Billboard.biz. "But [$12.98] is our MSRP, and we are allowed to put it in our advertising." Urie says the ad schedule was intended to capitalize on the Grammy broadcast.
When UMVD introduced the JumpStart price-cutting program last year, it initially planned to put a $12.98 sticker on all albums. But an outcry from the account base caused UMVD executives to change the sticker to read "new low price."
While some merchants repriced UMVD titles downward to match the lower JumpStart boxlot cost of $9.09, there was little change in pricing on UMVD products at most stores during the fourth quarter. During that time, UMVD execs privately said they were disappointed that more retailers had not repriced the company's product.
Merchants, meanwhile, said that since UMVD did not offer price protection on catalog, they wanted to capture as much profit as possible during the fourth quarter, in order to offset the inventory devaluation of CDs that were bought for $12.07 but would be credited at only $9.09 if returned after Jan. 1.