Universal Records announced last week a new pricing plan to help boost CD sales, which have plummeted by 16% for 2010.  The plan will lower new releases to a price of $10 or less.  In what is being called the "Velocity" pricing program by the label, targets increasing sales at brick-and-mortar retail stores that have scaled back on floor space dedicated to music. The pricing adjustments will also bring CD prices more in line with what consumers pay for digital albums at online retailers like iTunes and Amazon.

"We think it will really bring new life into the physical format," Universal Music Group Distribution chairman/CEO Jim Urie says.

Universal, which accounts for 28.7 percent of year-to-date U.S. album sales, according to Nielsen SoundScan, will cut UMG's main wholesale price point of $10.35 to about $7.50 or less for front-line releases, which are generally by established current artists. It's also breaking with prevailing industry practice by putting suggested retail prices on CDs, ranging from $6 to $10.

UMG is betting that it can offset the loss in revenue per CD with increased sales volume and the rollout of greater numbers of higher-priced, higher-margin deluxe editions of albums. The new CD pricing structure could also spur UMG imprints to find ways to reduce CD costs, such as embracing less elaborate packaging on standard single CD releases or placing fewer songs on albums in order to reduce mechanical royalty payments to songwriters.

Sources say the first titles to be released under Velocity are expected to include new albums by Godsmack, Game and Taio Cruz.

Will you consider buying physical CDs in stores if the price is under $10?