Tag Archives: universal-music

Are Compact Discs Dead?

In just a few months, Universal Music Group is dropping the prices on their CDs to between six and ten dollars each in an effort to boost sales. While the company does have its hand in the music download and streaming side of things, their profit margins are much better with physical disc sales. Up until now, however, it usually cost far more to buy a copy at the local WalMart than it did to purchase the entire album digitally.

In addition to the lower cost, UMG plans to add extra content to physical CDs that cannot be purchased online. Their hope is the combination of the lower cost packed with additional features will bring sales out of the serious slump they find themselves in. I personally love this idea, and will likely buy more compact discs than normal. I do buy music online, sure. But there’s just something about owning those sweet little silver discs that I am hopelessly addicted to. What about you? Will the lower cost cause you to go out and buy more music in hard copy form?

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Veoh Files Bankruptcy

Veoh was once considered to be in direct competition with YouTube. Veoh founder Dmitry Shapiro has said that the company would be liquidating and filing Chapter 7 bankruptcy. The company announced back in April that it would lay off 25 staffers, despite the $70 million in capital that the company raised from investors such as Intel, Time Warner, and Goldman Sachs. The company has been plagued by lawsuits during the past few years. Even though they have come out of those victorious, the cost of fighting has amassed to an astronomical amount.

Sadly, the news of closure doesn’t come as a surprise to many people. Traffic has been on a steady decline, dropping from more than 5 million unique visitors in December, 2008 to around 3 million uniques as of December, 2009. The company let go of what was left of their staff on Wednesday. Mister Shapiro stated on his own blog that “Unfortunately, great vision, a passionate team, tens of millions of users, millions in revenues and victory in court were not enough. The distraction of the legal battles, and the challenges of the broader macro-economic climate have led to our Chapter 7 bankruptcy”.

Veoh is just another in a long line of promising startups which has now failed in today’s economy. Even when there are investors on board, a company can still lose everything it has, just in the fight to stay alive. Online content consumers are finicky. We want what we want, and won’t accept something different. I’m not saying this is the case with Veoh. The number of visitors the site boasts is quite large. However, when compared with what YouTube brings in, those millions are apparently a drop in the bucket.