[78-L] The 1940 price cut

[David Lennick]

Did Columbia (i.e. Edward Wallerstein) just decide to drop the prices and see 
what happened, or did the popularity of drop-auto changers and the success in 
1939 of the anonymous but well-produced (by Victor!) "World's Greatest" series 
play a part?

dl

Michael Biel wrote:
> 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.
>>   
>