Universal Music puts its faith in memory cure for sliding sales

October 13, 2007
Dan Sabbagh, Media Editor

Universal Music, the world’s biggest music company, is to release singles on USB memory sticks this month, in an attempt to arrest the decline in music sales.

The Vivendi-owned company plans to charge about £4.99 for USB singles starting on October 29 with releases from piano rock band Keane and Nicole, the lead singer of the Pussycat Dolls. That compares with £2.99 for a typical CD single.

However, the hope is that fans will be willing to pay extra because the extra storage capacity on a USB allows the addition of videos and other multimedia.

Brian Rose, the commercial director for Universal UK, said: “This is aimed at the younger, 12 to 24 year olds, who no longer believe that the CD is as cool as it used to be”.

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Hurt hard by music piracy and legal downloads, sales of CDs are down by 19 per cent in the US and 10 per cent in the UK in the first half of the year.

But with physical music more profitable than downloads, the music business is eager to find formats that will keep consumers coming back to record stores.

Universal’s move is being gradually followed by the other three majors, although by contrast their efforts only amount to dipping their toe in the water, with EMI planning to release Pink Floyd’s studio albums on the format, while Warner Music is aiming squarely at the younger market with a November release of a part-album from electro-punk band Hadouken!

An agreement between the music companies and the Offical Charts Company, which runs the Top 40, means that USB sticks are eligible for inclusion in the chart. That now justifies making them available at the same time as a normal release.

Eric Daugan, vice-president, of digital business in Europe for Warner Music, said: “The CD is an old technology that has not evolved. Fortunately people still want to own a physical product, so with the extra storage, the idea is to offer a better consumer experience”.

Warner Music is hoping that Hadouken!’s USB will retail at £7.99. Promoted as being “halfway between a single and album” by the record company it includes six new songs and five old ones, with links to multimedia content on the internet, and an interface whose job it is to replace the look and feel of the paper album cover.

For Universal, the UK is the test market for the USB format worldwide, partly because it believes the UK is the last important market for singles.

The company hopes to release USB albums before the end of the year from acts such as Kanye West and Amy Winehouse – although rivals privately query its emphasis on the technology when there are alternatives such as MVI, a DVD-based format that combines music and video.

Mr Rose said: “We’re hoping that people will see USB singles as a piece of merchandise. There’s obviously a demand for collectable physical music the kind of format people want to stick up on their wall”.

http://business.timesonline.co.uk/tol/business/industry_sectors/media/article2648613.ece