15 October 2010 Last updated at 13:19

Album price 'should drop to £1'

By Ian Youngs Entertainment reporter, BBC News

The price of music albums should be slashed to around £1, a former major record label boss has suggested.

Rob Dickins, who ran Warner Music in the UK for 15 years, said "radically" lowering prices would help beat piracy and lead to a rapid sales rise.

Mr Dickins was in charge of the label from 1983-98, working with acts like Madonna, REM and Simply Red.

But his "revolution" in album prices has been met with scepticism from many in the music business.

Speaking at the In The City music conference in Manchester, Mr Dickins said album prices had already been pushed down by price wars and declining demand, and were likely to fall further.

"What we need is a revolution. What we've got is an erosion. When I was running Warners, a chart CD could be £12.99. A chart CD now can be £6.99, maybe even £5.99."

Some major album downloads currently sell for as little as £3.99 through retailers such as Amazon.

If record labels made the decision to charge much less, fans would not think twice about buying an album on impulse and the resulting sales boost would make up for the price drop, he predicted.

Making the comments during a debate with REM manager Bertis Downs, Mr Dickins advocated a "micro-economy" in which fans would make many small payments.

He said: "If you're a fan of REM and you've got 10 albums and there's a new album coming out, you've got to make that decision about whether you want it or not.

"If we lived in a micro-economy, that wouldn't be a decision. You'd just say 'I like REM' and you'd buy it."

Major albums would sell 200 million copies, he predicted. Last year's global best-seller, Susan Boyle's I Dreamed A Dream, sold eight million.

He added: "To a degree it solves piracy because if it's such a small amount people are more likely to pay it than [download for] free."

In his scenario, record labels would be able to make "big money" from other sources such as gig tickets and merchandising.

Mr Dickins said Prince went down this route when he gave his album Planet Earth away with the Mail on Sunday newspaper in 2007.

Fans had to pay a relatively small amount - the cost of the newspaper - but it generated enough interest to sell out 21 nights at the O2 arena in London.

Mr Dickins chaired the BPI, which represents UK record labels and stages the Brit Awards, four times between 1986 and 2002 and was made a CBE when he stepped down.

But he was dismissed by some at In The City as being out of touch and his idea is unlikely to be embraced by the current music industry.

Paul Quirk, chairman of the Entertainment Retailers Association, said: "Rob Dickins is part of the generation of executives who benefited from the age of £14 CDs and gave the music business a bad name.

"So it is ironic to hear him espouse the cause of the £1 album. Basic arithmetic indicates that this is a non-starter."

Jonathan Shalit, who discovered Charlotte Church and manages N Dubz and Russell Watson, described it as a "totally ridiculous suggestion".

"Right now if you buy a bottle of water it's £1," he said. "A piece of music is a valuable form of art. If you want the person to respect it and value it, it's got to cost them not a huge sum of money but a significant sum of money."

Chris Cooke, editor of music industry newsletter CMU, predicted that the major labels would "resist it hugely".

"It is a gamble," he said. "Once you've slashed the price of an album you can't really go back. It's a big risk and the record companies will resist it. But he's not alone, outside the record companies, in saying perhaps that is the future."