Record Price Cut

Last week Columbia Recording Corp.

made the biggest record news in six years: it slashed classical-record prices. Of the money that the U. S. spends for phonograph records, at least 30% goes for classical records, but the volume of classical record sales is only 10% of the annual output. On them the record companies try to turn a profit by a low volume-high price policy. Yet their big business in discs is in the popular 35-c--to-75-c- record field. Record manufacturers have always explained the low volume of classical record sales on the ground that there are comparatively few high-brow record buyers. But two years ago one record manufacturer, Columbia's President Edward Wallerstein, began to think there might be another explanation.

President Wallerstein became convinced that the potential classical record-buying public was much larger than commonly supposed; because 1) the U. S. had sprouted some 250 full-fledged symphony orchestras, some 45,000 smaller but still serious groups; 2) the size of outdoor summer audiences for classical music had boomed unprecedentedly; 3) radio surveys showed that some 9,000,000 listeners tuned in regularly on the broadcasts of Manhattan's New York Philharmonic-Symphony, 10,000,000 on those of the Metropolitan Opera Company; 4) when, late in 1938, the New York Post began offering albums of symphonic records at $1.93 as premiums to Post buyers (TIME, July 3, 1939), 200,000 albums were sold in the first seven months.

Swearing his Columbia colleagues to secrecy, Mr. Wallerstein planned his campaign as carefully as a Blitzkrieg. Last week, out of a clear sky, President Wallerstein made his dramatic announcement: that Columbia's entire classical list (old releases as well as new ones) was now on sale at half price. To profit by the change, Columbia plans to sell three times as many classical records as it had sold before. Wallerstein has readied his Bridgeport, Conn, plant for three times its normal production.

The price cut threw the rest of the record industry into the whoops & jingles. Victor, Columbia's towering competitor, went into a huddle to consider ways & means of countering Wallerstein's move.

Effect on record retailers was to cut their profits, per record, almost two thirds. Retailers found they would have to handle three times the former volume of Columbia classics if they were to keep their profits up. But one big record retailer, Manhattan's Macy's department store, reported that within three days after the announcement, buyers had walked off with more Columbia records than ever before.

Macy's reported that increased volume already makes up for lowered retail profits.

Asked whether the new half-price records (75-c- and $1 a disc) would be as good as the old ones, Columbia officials explained that they would be even better. The trick would be turned by mass sales. Said they: "If the price is right, we can sell as many classical as popular records."

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