CD price fall rejected

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The Independent Online
BRITISH record companies will only reduce the price of compact discs if sales begin to fall, despite pressure including a Commons select committee hearing. Maurice Oberstein, chairman of the British Phonographic Industry, said CDs would remain at present prices unless the industry lost public 'loyalty', writes Dean Nelson.

His comments came after the Commons national heritage select committee heard evidence from the managers of two of Britain's most successful rock groups. Record industry leaders will put their case on 29 April. The inquiry follows a long campaign for cheaper CDs in the Independent on Sunday.

At last week's committee hearing, Ed Bicknell, manager of Dire Straits, told MPs that the high price of CDs was preventing more people buying them. A price reduction could help lift the industry out of recession.

Mr Oberstein said that lower prices would not improve sales, but reduce profits and limit investment in new talent. 'The industry earned pounds 700m for Britain in 1991. A reduction would affect our ability to generate decent profits to invest in new talent. In 1991-1992 we spent pounds 130m on British recordings. The consumers have voted with their purses. More than 51 per cent of the record business is in CD sales. The public make the prices.'

For the Consumers' Association, which supports Dire Straits' and Simply Red's campaign, policy director Stephen Locke said: 'If it is established that CDs are too expensive, and could be priced more reasonably, the industry would have an obligation to respond. They can't say, 'If we can get away with it we will'.'