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Confusion, high prices hurt DualDisc

UPDATE: Warner to introduce DVD album that combines visual, music

By Susanne Ault -- Video Business, 9/29/2006

SEPT. 29 | Puncturing industry hopes it would save physical music sales, CD/DVD hybrid product DualDisc is quickly disappearing.

Retailers blame high pricing and consumer confusion for contributing to the downfall of the format, which features a CD on one side of a single disc and a DVD on the other.

At its May-June 2005 peak, DualDiscs represented 2.1% of all music items sold, the vast majority of which were CDs and two-disc combo CD/DVD albums, according to NPD research. During that same period in 2006, DualDisc’s music share was 0.8%.

MVD Distribution’s wholesale business, which services most record label DVD product, reports that new DualDisc releases slimmed this year by about 80% from 2005. Fifty-seven DualDiscs have streeted since January, versus 274 during the same frame in 2005.

Hybrid discs can be priced as much as $4 over the artist’s regular CD, but many said the video content featured on the DualDisc was rarely worth that price difference.

“The customer is shouting for $9.99 CDs, and when [labels] come up with $19.99, that is just a wacky old model,” Newbury Comics buyer Carl Mello said.

For example, Sony BMG’s most recent release, Bruce Springsteen’s We Shall Overcome, which bowed in April, was listed at $19.98.

“That is very high,” Mello said. At Newbury, “70% or more of the time, the artist’s straight CD album would sell better than its DualDisc counterpart.”

We Shall Overcome was available only on DualDisc. But albums have been released in multiple versions, contributing to shopper confusion.

In March, Virginia chain Plan 9 stocked only Teddy Geiger’s $15.99 Underage Thinking CD, rather than his $19.99 Underage Thinking DualDisc, also from Sony BMG. A third special edition of the album streets Oct. 10.

One of Plan 9’s best-selling DualDiscs, Fiona Apple’s Extraordinary Machine, also from Sony BMG, sold 163 copies, but that was far less than the 450 copies sold of Apple’s regular CD of the title.

“It just wasn’t vibrant enough video,” MVD Distribution chief operating officer Ed Seaman said. “CD was always the bigger play with the product. Labels wanted to combat the downloading problem. But for consumers, it ended up being a pain to flip a disc over and then see a side that wasn’t even very good.”

Sony BMG, which has been the only label to release DualDiscs over the last several months, declined comment.

Traditional music DVD titles, in which CDs are generally not part of releases, continue to make up less than 10% of the overall audio business, according to the Recording Institute Assn. of America. Faced with that uphill battle for consumer attraction to visual audio product, record labels should have presented more comprehensive DualDisc advertising campaigns, retailers say.

However, Warner Music Group is not yet throwing in the towel on visual audio products. The label plans to introduce a DVD album, according to company sources. The format is modeled after a CD, containing individual music tracks plus visual content on a single DVD.

The product is expected to be designed for today’s tastes, with tracks that can be easily accessed as compressed formats for computer use.

Warner is expected to release its first DVD albums next year, but might test a handful of releases at retail earlier.

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