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Last Updated: Monday, 18 August, 2003, 11:32 GMT 12:32 UK
Q&A: Cheaper CDs
A record number of albums were sold in the UK in the last year as CDs fell to their cheapest price yet, industry figures have revealed.

BBC News Online looks at what this could mean for music fans, and the wider issues for the industry.

Why are more albums being sold than at any time in the past?

Albums on sale in high street stores and online outlets are at their cheapest yet, according to the British Phonographic Industry (BPI).

This is partly due to a constant round of discounting and sales campaigns in the the bigger stores which shape the market.

Retailers also point to strong sales from a small number of major artists such as Robbie Williams, Coldplay and emerging bands like The Darkness.

Why are albums now cheaper than in the past?

Major retailers such as HMV and Virgin have been forced to respond to greater competition from supermarkets such as Tesco and online retailers which can sell them at lower profit margins.

Why is the value of sales down, despite the strongest record sales yet?

To promote high turnover, record companies have reduced the price at which they sell stock to the retailer - allowing retailers in turn to offer customers a discounted rate.

What impact will cheaper albums have on the business long-term?

Some analysts say lower prices will be difficult to sustain because if record companies are providing cheaper product they will not have as much money to invest in developing new artists.

Others believe that once consumers have "stocked up" on cheap back catalogue albums by their favourite artists, the market will reach a plateau and begin to slow down - although optimists say fresh talent will continue to bring customers into record shops.

Are retailers suffering from the cost of cheaper albums?

With the wholesale trade price of a CD about 9, many smaller independent and specialist stores have suffered because they do not have the volume of sales or the financial muscle to negotiate discounts like multiple retailers and supermarkets.

Many smaller retailers have folded, blaming competition from major buyers, the internet and online piracy.

Bigger retailers selling cheaper product may take a small hit but compensate by volume of sales.

How do sales compare with the rest of world?

Sales are flatter in major world territories such as North America and Japan.

Retailers say the figures show there is a big appetite for music in the UK, and the nation should celebrate the strength of sales.

If albums sales are so strong, why are singles sales down?

Industry watchers say singles sales are in decline because of their expense relative to the cost of albums, combined with over-exposure prior to their release and the problem of illegal internet file-swapping.

The record industry is reacting, with EMI promising a cheaper basic two-track single and a pledge to reduce a single's airplay before it is due out.

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