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In light of the looming economy and the rise of Internet downloads, Universal Records is announcing plans to lower the price of new releases.

The record company’s sales have dropped an estimated 16% in 2010 alone based largely on the sale of digital albums on ITunes and Amazon.

In order to compete with the digital music providers, Universal will provide physical copies of CDs at $10 or less.

Speaking on the new sales initiative, Universal Music Group Distribution Chairman/CEO Jim Urie hopes it will “bring new life into the physical format.”

The new idea is being called the “Velocity” pricing program and will target increasing sales at retail shops that have scaled back on floor space dedicated to music.

Beginning in the second quarter and continuing through most of the year, the company’s Velocity program will test lower CD prices. Single CDs will have the suggested list prices of $10, $9, $8, $7 and $6.

Universal Records accounts for 28.7 percent of year-to-date U.S. album sales.

The first titles to be released under the “Velocity” campaign are reportedly from GodSmack, Taio Cruz and R.E.D. from the Game.