ABSTRACT
In the early 1990s, the recording industry was in the midst of the replacement cycle, where consumers were still replacing their old vinyl and cassette collections with the first digital format-the compact disc (CD). In 1994, there was a 20% increase in sales, to over $12 billion. This boom was fueled by discount retailers such as Best Buy and Circuit City aggressively entering the music
market and discounting CD prices. A calculation of the Recording Industry of America Association (RIAA) figures indicates that the average selling price of a CD dropped from $13.14 in 1993 to $12.78 in 1994. Since then, the retail price has increased to an average of $15 in 2003, but CD sales are still sluggish at best.
