Recession busters, and other forms of whistling in the dark

So as you may have heard, last week McCray Dove announced that the Dove Brothers were cutting the price of their product to $10 a piece. According to the press release, the move is a response to the economic crisis:

[T]he Dove Brothers have decided that until our nation is over this recession and the economy is back on its feet that all of our cds and dvds here on our web store and at our product table at a concert near you can be purchase for ten dollars each.

Certainly you can’t say this decision was made with the bottom line in mind! (I guess this could be seen to make bidness sense viewed as an effort to get more music in the hands of more people. Presumably, the more people who own your music, the more likely they are to become repeat customers. Presumably.)

But I confess, this whole “helping the nation during tough times” feels a wee titch gimmicky to me. I mean, just two years ago Dove announced that - lo! - he was hiking CD prices to $23 per, and actively solicited other groups to do the same. Hard to imagine that that move is paying off for him, and so now he’s overcorrecting in the other direction with the sg equivalent of the “recession buster” lunch special that’s been running at the Applebees down the street from me most of the summer.

Make what you will of this as a bidness decision. But it’s pretty much guaranteed to annoy many of Dove’s peers (not that I have any reason to think this matters to him in the least). I mean, imagine if you’re, say, GV, L5, BB or the Hoppers. In each of those cases, you’ve just dumped a lot of cash into a Lari Goss recording, which means it will take you a lot longer to recoup on the project, even at regular CD prices of $15-$20. And along comes Dove and undercuts you by $5-$10 per unit, and immediately fans start praising him for giving the industry a much-needed jolt. There might be some satisfaction in telling yourself you’ve put out a Lari Goss album of superior quality to DBQ’s stuff, but among sg consumers, “quality” production has never been a reliable way to move product.

Mind you, I know of no law that says sg is immune from price wars, but unless Dove starts moving more than twice the product he was selling before the price cut, or starts producing projects that cost substantially less (both unlikely in the long run), it’s hard to see how this will be a financially sustainable move. Then again, that’s what I thought about the price hike a few years ago, and I assume this latest move will work just about as well, until Dove decides the economy has turned around sufficiently and re-reprices his product.

But really, the issue here isn’t what the next “bold move” from DBQ’s pricing department will be. Rather, it’s that all this to-ing and froing about CD pricing ignores the underlying problem that no one really seems to be grappling with: namely, that selling CDs is rapidly becoming pretty much the best way to go broke in the music business. Just because your CDs might be making a joyful noise for the Lord doesn’t mean you too can’t go broke selling them - whether they’re produced by Lari Goss or now available at a new, reduced, recession-friendly price.

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Comments

  1. MityCats wrote:

    One thing to note - it is DVDs as well that the price has been cut to $10. That was more impressive to me than the $10 CDs.

    Whether or not this boosts Dove Brothers’ sales is yet to be seen. The gesture alone to try to help those of buying product was appreciated.

  2. noninsider wrote:

    I don’t mean this in anyway as a big slam to the Dove Brothers but the DVD I recently purchased from them is NOT worth $10… (You couldn’t give me one now) The quality is the worst I have seen on a SG DVD… It looks like a home video shot in a barn…

  3. Brett wrote:

    CD’s Are so LP’s I can’t believe anyone would have paid 23 dollars for one.

  4. pk wrote:

    I just wish the SG people would get on the bandwagon with iPod and get the music that is on the radio now, on to iPod! by the time they do get it on, you’ve forgotten about it and don’t download it.

  5. j-mo wrote:

    Countdown to a poorly worded rebuttal from McRay Dove in 5…4….3….2

  6. David Bruce Murray wrote:

    I spoke with McCray on the phone a few days ago. He said this decision is to help more people take their CDs home. It’s pretty much what the press release stated, in other words. If it was a business decision, I’m sure he’d leave CDs priced at $20.

    It’s true that many…maybe even most…people won’t pay that much for a CD. Enough will, though, to make it a good price point from a strictly business point of view. People will pay more at a concert where they get to meet the artist than they will online or in a store.

    The volume he will have to sell at $10 to make the same amount of money is basically tripled (certainly more than just doubled). He doesn’t get CDs for free.

    The price war analogy doesn’t really apply at all. The Doves Brothers aren’t selling Hoppers CDs and vice versa.

    j-mo,
    McCray’s grammar is always interesting to say the least. What makes your observation funny is that in the process of pointing out his propensity for writing mistakes, you didn’t spell his name correctly.

  7. The SG Stache wrote:

    Well, in the secular world, a couple of years ago, Radiohead put out their long-awaited “Rainbows” album. It was available for download via their website, for…whatever you wanted to pay. I had a friend pay $00.01 for it (pretty lame of him, I know and kinda made me mad), and another friend paid $30.00 just because he was enthused and affected by this revolutionary idea that was simply in the hands of the fans. 1.2 digital downloads were sold by the day of release and the attention arose and boosted later retail sales. The band won 2 grammy’s and 4 nominations for the album. Don’t know how well that will work in SG, given the limited internet users, but maybe one day…

  8. wanderer wrote:

    Hmmm. Interesting considering he now has a band to pay. He still does have a band to pay doesn’t he?

  9. j-mo wrote:

    ops.

  10. noninsider wrote:

    Stache I hope you meant 1.2 million albums were sold, not just 1.2… :)

  11. Aaron Swain wrote:

    #7: I thought I had seen an SG group doing the “pay whatever” thing on their website for individual tracks recently, but I can’t remember who it was.

  12. The Gospel Stache wrote:

    #10, noninsider, yes, 1.2 million. my bad. 1.2 alone, would quite an awkard number of albums sold.
    #11 Swain didn’t know that. it would be interesting to see how that turned out.

  13. Tjeerd wrote:

    This is what freedom and free enterprise is all about.
    I urge everyone to read Milton Friedman, F.A Hayak, Ludwig Von Mises, or Hans Sennholz.
    Any group can sell their CD’s for any price they wish. Government, Unions, Artist Guilds, Southern Gospel Associations, or anyone for that matter have no buisness telling the Dove Brothers how much they should sell their CD`s.

  14. GospelMusicFan wrote:

    The one that that have a business telling a group/artist how much to sell their products are the customers who buy their products.
    Folks, you charge what the market will bear.
    You might have to add an “add on” an enticement to buy the unnecessary products to maintain a basic quality of life and enjoyment in these days.
    Bill Gaither knew that fact long before we ever started talking about hard selling with drive thru and adding on.

  15. Bones wrote:

    Don’t groups who sell Gaither product have a set price and can’t go below it? Heard in the Rumor Mill.

  16. cdguy wrote:

    Not only Gaither, but in the 60’s and 70’s, nearly ALL groups had 3/$10 or 3/$15 specials. The old Benson Company even created a custom label (Vista), so their artists could have table projects to sell at lower prices.

    “There’s nothing new under the sun.”

  17. Alan wrote:

    Okay, I’m a soloist, and even if Enlighten plays my songs, (for which I’m very grateful) I’m not mainstream sgm. I was intrigued by this story, though, as in my little world, I did the same thing last year. Regardless of the debate, we can’t assume that people have the discretionary income today that they might have had 5 years ago. I dropped my CD prices to $13, and have run a website special of 6 CD’s for $60, which includes shipping. Sales have never been better since I did that. There seems to be an emotional bond of sorts in this; people realize what you’re doing and why, and appreciate it. Some who might have only ordered 2-3 CD’s will order the set of 6, and two good things happen: You move more product, and more people hear your music. What I’ve noticed is that many will play it for family members/friends, and you get new orders. I had one man in Canada order the set, and since, I’ve sold and sent 13 sets to his associates. As a business model, this works. Our product, after all, is just like any commodity; there are costs to produce it which are high in the beginning, but on reorders, the unit price drops significantly. So, if my older projects now cost me $1.15 per CD to make, selling one for a net of $8.85 isn’t a bad profit margin. McCray and the Doves will probably have this same thing happen to them. Even if every song on a 12-song project requires mechanical licensing, royalties only add $1.10 or so to each unit. It’s still a good profit margin. I know that this might be quite simplistic, but my point is that this will probably work, and others will be trying this technique to move items that are not necessities in a trying time.

  18. cdguy wrote:

    Alan, you’re right. And the major Christian record label have been doing the same thing. Maybe not as drastically as McCray Dove, but lowering prices, none-the-less. Many new releases are coming out as low as $9.99, but most new CCM, SGM, and P&W titles not priced over $13.99.

    When a consumer goes into a Christian bookstore with $15. in his/her pocket, and sees 2 cd’s he/she likes: One priced @ $12.99, and the other priced $16.99, which one is he/she going to buy?

  19. Scott Pyle wrote:

    They are making up for it in jelly sales. :) Seriously that is some good jelly.

  20. David Bruce Murray wrote:

    Yeah, I bought the latest Newsboys CD a few days ago for $9.99.

  21. Nate Stainbrook wrote:

    Yes that is some very good Jelly… :)

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