The discussion of cd pricing has much to do with the economic principle
of price elasticity.  The argument that lowering prices by a particular
percentage will increase sales by at least that percentage doesn't hold
true on its own.

Naxos would appear to be a fine example of strong price elasiticity,
but Arte Nova is an equally good example of a lack of elasiticity.
The difference between the two labels is that Naxos became perceived
as a low price/high quality record label.  Arte Nova just was perceived
as a low price label.

I'm sure most of us could point out many inexpensive discs in our local
stores that just sit on the shelves month after month.  Consumers are
wary of cheap prices without confidence of fine performances.

The Naxos empire made sure that its products would be highly thought of
through the use of quality performers and the marketing regimen.  Only
through these efforts did the price elasticity reach a favorable level.

Would a large increase in sales take place if the so-called "Majors"
such as Sony, RCA, and the Universal crew reduced their prices a few
dollars?  I have my doubts.  There would likely be a short-term increase
as buyers gobbled up those prized major label recordings that were not
bought due to cost considerations.  Once that was done, the market would
flatten.

Naxos has proven that low price combined with quality performance is a
winning combination.  The Majors still continue to charge premium price
regardless of the quality of performance.  This fact, along with the
consideration that all of us have already replaced our LP recordings
with their CD equivalents, has turned the market down for the Majors to
the degree that each of them has retrenched and cancelled many recording
contracts for well-known performers, conductors, and orchestras.  Yet,
their prices remain at premium level.  Their policies don't appear too
bright, but I have no idea what their profit margins have been in recent
years.  Further, through the use of creative accounting techniques(legal
or otherwise), I wouldn't trust those figures if I had them.

Overall, I don't worry about these economic factors and business decisions.
As long as the cadre of classical music enthusiasts is intense about its
love of classical music, all will go well for record buyers.  As i have
said before on the List, buying music(for live performances and/or discs)
is essential to insure that classical music doesn't fade into the night.

On average, classical music fans have greater education and income than
folks more inclined to other musical categories.  We need to take full
advantage through our spending money on the services and products we
love.  If that's elitism, so be it - it's only a word people use when
they are disgruntled.

Don Satz
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