Consumers have been moaning about inflated CD prices for years, but their complaints have fallen on deaf ears--until now. Universal Music Group (UMG) just announced that it will dramatically reduce its CD pricing, beginning October 1, to $12.98 and below. Whenever one of the major labels has altered its pricing, the others have followed suit, meaning that most CDs should be in the $10-to-$14 range within a few months--the first time CD prices have ever dropped, despite promises from labels that prices would fall in the years following the launch of the CD.

So why, after years of consumer griping, are CD prices finally heading south? It's simple: The labels have no other choice. Corporations don't make changes such as this in the spirit of fairness, no matter how many people complain. They do it because it makes sense from a profit--and perhaps, in this case, survival--standpoint.

	CD burners such as this award-winning CenDyne model have changed the way consumers feel about expensive CDs.

People have simply reached the point where they no longer think a CD is worth $18. Before the widespread adoption of CD burners, most of us had no idea how little it cost to produce a CD, but now we're wiser, though the more expensive, nonphysical aspects of CD production remain a mystery to most. And these days, if consumers want music, they obviously have several online alternatives to record stores. Besides, many prefer to spend their money on DVDs instead--a fact not lost on UMVD (Universal Music and Video Distribution) president Jim Urie, who said UMG's "new pricing model will enable U.S. retailers to offer music at a much more appealing price point in comparison to other entertainment products."

Finally and grudgingly, the labels likely agree with the Forrester analysts who say that CDs are a doomed medium. This might be their last chance to sell shiny discs before consumers move on to pure digital formats. In the future, MP3 players might even be sold much like cell phones are today--as loss leaders for service plans. Perhaps you'll even get a free iPod in exchange for signing a contract to purchase a certain amount of music from the iTunes Music Store over the next couple of years.

	The magic number: According to retail experts, most people can buy a $199 device such as this iRiver iFP-390T without consulting their spouse beforehand. (Click to enlarge.)

But the present is a great time to be a music fan, despite the RIAA's best efforts; along with CDs, MP3 players are also becoming more reasonably priced. You can now buy a feature-packed 256MB MP3 player for $200 or a great-sounding 128MB MP3 player for less than $100. Plus, those 1.5GB hard drive-based MP3 players (such as the Rio Nitrus or the Creative MuVo²) have broken a significant capacity boundary, offering 1.5GB for less than $300 for the first time.

Best of all, both trends will most likely continue as competition heats up during the holiday season. Happy holidays indeed.