Photo courtesy of DigitalTrends
Earlier this year, Lady Gaga’s Born This Way reached the #1 spot on the Billboard Top 200, selling some 1,108,000 copies in its first week. A large chunk of those sales (an estimated 440,000) were thanks to Amazon.com’s $0.99 price point, which clearly bolstered sales and opened up a new stream of revenue for labels to explore. But despite the massive success of the reduced price scheme, the industry didn’t have long to explore the brave new world as Billboard has announced that beginning Novemeber 21st, 2011, they’re changing their pricing policy, shutting the door on the immediate turn-around for future fire sales.
According to Billboard, “albums priced below $3.49 during their first four weeks of release will not be eligible for inclusion on the Billboard album charts and will not count towards sales data presented by Nielsen SoundScan” (exceptions for EPs, multi-disc albums, and digital-only deluxe editions were also enacted). As well, digital songs “priced below $0.39 during their first three months of release will not be eligible for inclusion on Billboard’s digital songs charts.” Billboard editorial director Bill Werde explained the changes were implemented to better represent today’s vastly nuanced record-buying landscape.
“We ultimately chose $3.49 for two reasons. One, it’s roughly half of wholesale in the digital world, where albums cost retailers about $7.50 on average. And two, this price point wouldn’t interfere with any regular or semi-regular pricing currently in effect at any of the five biggest retailers Walmart, Amazon, iTunes, Best Buy and Target.” He also added that “free or almost-free albums don’t represent a marketplace.”
The change comes after several publications, including Entertainment Weekly, questioned the validity of low price-points, despite the numbers leading to an overall increase in album sales for the first time since 2004. To read the full policy change, head here.