JUMPSTART GETS ANOTHER KICKSTART

The distribution company will simultaneously raise wholesale prices on frontline product, while lowering them on catalog. All changes will go into effect April 26.

For frontline CD product, prices have been raised from $10.10 to $10.35 and from $9.09 to $9.49. Suggested MSRP will now be $13.98 and $12.98.

Catalog prices can now be discounted from $9.49 to $7.78, while on midline product, the price can be lowered from $6.06 to $5.51. In order to receive the new catalog discounts, retailers must price and position the titles much like the UMVD’s former "Flex Catalog" rules. Otherwise titles will stay at the $9.49 and $6.06 price points.

Said UMVD's Jim Urie: "The reason we’re doing this is because we believe in JUMPStart and we want to stay in it. And the price change was necessitated strictly by us having to make it financially viable to stay. It lowers our lift to what we believe is a reasonable level."

The program was first announced last September by Urie (see hitsdailydouble.com, 9/4/03) and has, according to a source, "helped drive retail prices down across the board for consumers."

Although insiders insist that co-op will not return in any form, some surmise that it’s not out of the question that discounts on frontline product could now become a part of the equation at some point in time as a mechanism to "juice" the marketplace on developing artists.

Sources say the adjustments will help make the program competitive. UMVD will continue with its aggressive consumer advertising campaign, which includes network and cable TV, and such print publications as Entertainment Weekly, USA Today and Rolling Stone.

As part of JUMPstart, UMVD requires all participating retailers to devote 27% of their floor space to UMG product. Sources indicate that most retailers have done even better than that, with between 30-42% set aside for UMVD titles.

Obviously the big box retailers such as Best Buy, Wal-Mart and Circuit City are going to be very bullish on the new terms, but Urie insists that he has had other retailers have responded positively as well.

Added a prominent executive from a competing record group: "Frankly, I would have expected a more dramatic change. I’m sure that it’s well thought out, but we’ll have to wait and see the impact over time."