Earlier this month, Universal Music Group (UMG) announced plans to reduce compact disc prices by nearly one-third in an attempt to rejuvenate slumping record sales.

The price slashing marks the first of its kind since CDs hit the market in August 1982.

Universal formed in 1996 when MCA Inc. merged with several smaller record companies. In the last decade, Universal has reaped nearly a quarter of global sales and has climbed atop the record industry sales pyramid with a roster containing sales giants like U2, Shania Twain, Blink182 and Eminem.

Prices for CDs are scheduled to drop from $18.98 to a reasonable $12.98 in October, and sale items may enter the market at less than $10. The first album to be released at the updated price is “Chicken and Beer” by Ludacris on Oct. 7.

This reconstruction is designed to entice penny-pinchers to unplug their computers and travel to their nearest retailer. But retailers will be harmed the most.

Stores still will be expected to pay the conglomerate the same amount per item sold. In addition, Universal will lower the payments it makes to retailers for in-store promotions and shared marketing, but plans to increase direct-to-consumer advertising.

Universal will expect independent retailers, who traditionally keep 27 percent of each sale, to reduce their share to 18 percent. Misleadingly, the corporation informed vendors that their income would decrease by 9 percent. However, establishments that sell only CDs will lose one-third of their total revenue.

“It’s tough to say exactly what will happen. The initial indication is that we are going to have our margins squeezed,” said Steve Warrenfeltz, owner of Batavia’s Kiss The Sky. “We may have to bring in different products to sell.”

These fears seem justified. National sales reached their highest in 1999, but have since declined 30 percent. Last year saw more than 600 independent music retailers across the country close shop. Recently, a Forresters Research survey estimated that 33 percent of music sales would come via the Internet, coupled with a 19 percent decrease in total sales by 2008.

Labels have begun licensing music to such Internet companies as Apple Computer’s iTunes. These Web sites allow music to be downloaded for as little as 99 cents per song, and they also comply with artist royalty laws.

Mark Cerny, owner of Record Revolution, 817 W. Lincoln Highway, has an optimistic viewpoint. “I’m looking forward to selling (CDs) at the new price,” Cerny said. “Anything to get customers back into the stores is a good thing.”

The national price cut has found support from the nation’s leading retailer: Wal-Mart. Best Buy, who is currently in court battling a California lawsuit for illegally under-pricing CDs, additionally released a statement supporting the move.

Larger stores stand to lose less money than mom-and-pop retailers. Due to their size, these stores are able to order products directly from the record company. Independent stores needing fewer items are forced to use a regional distributor to stock their shelves. This difference causes prices to vary between 50 cents and $1 per album ordered.

Some older establishments, such as Record Revolution, are able to place orders directly with Universal.

“Because of how long I have been around, I’m in a better place than some of the newer stores,” said a relieved Cerny.

Not only will independent retailers feel the pinch, artists will sing a sour note, too.

In a bold public relations move, as stated on music.com, Universal announced intentions to “step out and invigorate the market” on Sept. 4. Yet, a stealth operation of price cuts has been in effect since 2002. The first of this undercover movement was a release by the artist Ashanti, which debuted at No.1 and sold 751,000 copies in two weeks.

The Universal umbrella contains such labels as Bad Boy and Geffen Records. Though the company reportedly plans to reduce prices on all CDs, many labels under Universal’s control are not participating. Both Dreamworks and Hollywood Records have no plans to change their $18.98 list prices.

“People are going to come into our store and expect slashed prices all over. We’re going to have to tell them that only a few of the discs are going to be reduced. It makes us look like the bad guys,” said Mike Messershmidt, who orders all products for Kiss The Sky.

Weeks after the price-shattering announcement, Universal remains the only major label planning a cut. The four others, Sony Music, BMG, EMI and Warner Music, are reluctant to lower prices. In a statement released by AOL Time Warner, which is the parent company of Warner Music, the conglomerate indicated that, “They are constantly looking over their pricing policies, yet have no specific plans at this time.” The other three have yet to comment.

This last-gasp effort by to appease a public accustomed to continual price increases may be too little too late. Forresters Research reported that about $700 million was lost last year due to 41 million fewer records sold.

Universal’s price reduction isn’t shaping up to be music to everyone’s ears. The cut has retailers wondering what lies ahead.

Warrenfeltz laments, “They should have dropped their prices four or five years ago or just never raised them. Downloading, a slow economy and high prices are all to blame for poor sales. It’s not just the label’s fault.”

In 1975, a prophetic John Lennon sang, “Instant karma’s gonna get you/ Gonna knock ya right on the head/ Better get yourself together darling, pretty soon you’re gonna be dead.”

Universal should have paid closer attention. But, it seems it is not Universal that will need saving.