[78-L] The 1940 price cut (was: Columbia Records and HRS/UHCA Reissues)

[Michael Biel]

Geoffrey Wheeler wrote:
>  on Tuesday, August 6,[1940] Columbia Recording Corp. announced that it was cutting its 
> retail prices on both its classical Masterworks line and its popular 
> red-label line. RCA Victor soon followed suit. The effect of the price 
> cuts was almost immediate. An article in the Financial section of the 
> September 12th issue of The New York Times was headlined: “Price Cut 
> Brings Boom in Records; Sales This Year will Far Exceed 1939 Total of 
> 60,000,000, Companies Report; RCA-Victor Total Spurts; Dealer Stocks 
> Cut; Columbia Orders Up 1500%; 

Thanks for the reference to this article because I have been gathering 
together contemporary published info on the price cut.  One of the 
outlandish claims being made by the Steinweiss supporters is that his 
illustrated album cover on an unspecified Beethoven symphony increased 
sales 800%.  It obviously was the price cut that made the real difference. 

There are fascinating editorial comments in the Sept and Oct 1940  
issues of H. Royer Smith's "The New Records".  Since a very large part 
of this Philadelphia store's market was classical music, once Victor and 
all the others followed suit with the price reduction they found that 
they had to sell  twice as much to make the same profit.  The editorials 
bemoaned that the companies would have to sell 3 times the amount of 
records to reach the same profit they had before, and that after the 
first flush of increased sales settled down when customers learned to 
treat the new prices as the regular prices, the companies will find 
their sales eventually increased by only 10 to 25%.  They predicted that 
less profitable recordings would be deleted, leaving only the 
potboilers, noting that one company with 600 albums would only find 50 
of them profitable at the new prices.   They suggested that companies 
raise the prices back to the old level but then reissue albums at a 
lower price on a different label once they have made back their costs -- 
predicting the Camden label about 13 years early! 

Mike Biel  mbiel at mbiel.com
> According to the Times article, “With price cuts on classical types of 
> phonograph records increasing orders from 200 to 1500 percent during 
> the last month, the record industry is now moving toward a new high in 
> disc output and sales, executives of leading companies here said 
> yesterday. They made the prediction that the 1939 total of close to 
> 60,000,000 records will be far outstripped this year that the industry 
> after a slump to around 12,000,000 records in 1932 [sic: 6 million] is 
> now headed toward the 100,000,000 annual mark. The previous high of 
> 125,000,000 records was reached in the middle Nineteen Twenties.
>