Best Buy: indie music distributor???

[johnS]

Can a "big box" chain like Best Buy become a channel for independent artists to bypass the big record labels and offer their music direct to a very wide audience . . . or at least people who visit Best Buy's web site?

The hubub is over Best Buy's deal with CD Baby.

http://www.cdbaby.com/

http://www.bestbuy.com/olspage.jsp?i...&type=category

Basically, it works like this: The artist decides how to price the CDs, CD Baby (the online aggregator/distributor) gets a $4.00 cut, and Best Buy takes its piece of the action out of CD Baby's $4.00.

Check out this NPR report:

http://www.npr.org/templates/story/s...toryId=5184853

Is this a big deal or a non-story?

[smopo24]

this is not a big deal, depending on what their angle is. the way best buy or any of these consumer electronics stores works with media is this:

they get a bulk discount, cheaper than mom and pop (even cheaper than chain) music stores. they even sell things at a loss just to undercut the competition ( cost is $8 per unit, they sell for $7.50) to get you in the door, just in case you feel like buying a cd player, washer/dryer combo, or microwave too. these are loss leaders. on top of that, they say "since we're a huge retailer (best buy, wallmart, target, etc) that we will not carry cd x if you don't give us cd y for cheaper." not to mention the disgusting cencorship of artists for content.


honestly, selling "independant" artists' albums is good because at least these kids may have another option to that new scott stapp piece of trash that is being marketed to them. hopefully it will teach kids that just because you aren't popular, you can still make "good music."

[dagosto]

Originally Posted by johnS

Basically, it works like this: The artist decides how to price the CDs, CD Baby (the online aggregator/distributor) gets a $4.00 cut, and Best Buy takes its piece of the action out of CD Baby's $4.00.

Check out this NPR report:

http://www.npr.org/templates/story/s...toryId=5184853

Is this a big deal or a non-story?

Where's Clear Channel gonna get their cut?

[smopo24]

Originally Posted by dagosto

Where's Clear Channel gonna get their cut?

they get their cut when the touring acts have to pay to play their "club" venues on their tour.

[bwethera]

They still do not have the marketing muscle to push the album out to the front though, so unless the kids decide to seek them out they still just sit on the shelves

[smopo24]

Originally Posted by bwethera

They still do not have the marketing muscle to push the album out to the front though, so unless the kids decide to seek them out they still just sit on the shelves

very true. endcaps, displays, and in-store advertisements are purchased by the record companies or given away to those companies that "play ball" with the retailer. the little guy has almost no shot at exposure inside the store, other than having a disk available for purchase there.

[smopo24]

here is an update to this story that i found on pitchfork:

Best Buy to Indies: Drop Dead

Mairead Case reports:
On January 24, Best Buy announced its latest promotion: a sale on a handful of albums from "left of the dial indie heroes," such as the Arcade Fire, Cat Power, Danger Doom, Antony & the Johnsons, Atmosphere, New Pornographers, and Broken Social Scene-- all listed at the obscenely low price of $7.99. Yes, that's cheaper than every other store on the planet, including iTunes. In fact, it's cheaper than distribution wholesale.

How can Best Buy get away with that? Isn't that illegal or something? Well, no. Welcome to the wonderful world of co-ops. Co-op campaigns are deals in which labels exchange money or extra CDs ("cleans") for prominent placement in stores, bulk initial orders, sale pricing, and advertising presence. Co-ops exist everywhere, from megastores to Mom and Pops alike. In other words, whenever you see some Next Big Thing featured at the end of an aisle, nine times out of ten, the label paid for that artist to be there.

This isn't intrinsically a bad thing. However, when co-op money is used to lower prices as substantially as Best Buy has, it's independent record shops that suffer the blow: Given the recent plunge in album sales over the past five years, these stores are already struggling. And while it may seem dramatic to say that something like this could make these kinds of stores extinct, the danger is very real. For many, it will be the final straw that puts them out of business.

It's no surprise, then, that Best Buy's "Artists Outside the Mainstream" program has inspired a lightning-quick backlash from small stores and non-participating labels. Tongues are lashing at Saki Store, the blog home of indie distro Carrot Top Distribution and Carrot Top Records (Handsome Family, Antietem, the Coctails, Archer Prewitt). On January 24, CTD, Ltd. President Patrick Monaghan posted a screed lambasting Best Buy and the labels involved in the program. His post inspired a heated discussion that spread across the web, with label executives and store owners joining the fray.

"I don't really see any way you can blame the customer," Monaghan told Pitchfork. "Hell, what decision is a consumer supposed to make, assuming they actually want to pay for their music, when faced with a $7.99 vs. $13.99 CD? I also don't think you can blame Best Buy. You can't shame the sociopath, so what good does it do to try? In my humble opinion, the blame falls on the labels and bands who are participating in this co-op advertisement deal."

Monaghan continued, "It's a question of extreme pricing and sale. If there is no indie retail to help build new bands, we are left with MySpace, the unfiltered Internet, and ad/TV/movie placement to introduce people to new bands. Retail would be left to the Best Buy/Starbucks axis. That's not too appealing of a scenario to me."

Mac McCaughan, Superchunk/Portastatic frontman and co-owner of Merge Records, responded point-blank: "Obviously, Merge's job is to get our artists' records in as many stores as possible, and make them available to as many people as possible who want to buy them," he commented on Saki Store. "Someone who discovers an artist because the 'popular' record is on sale at Best Buy will then hopefully be driven to find out more about the band. [Then,] they'll have to get the back catalogue at a store that sells mostly music."

According to the labels involved in "Artists Outside the Mainstream", Best Buy never mentioned the $7.99 price plan when discussing the program. The promotional paperwork specified only print circular placement, special positioning, and sale pricing, but no disclosure of how low that sale pricing might be.

In this sense, the labels, prevented from price-point negotiations under 2002 price fixing legislations, were truly blindsided. As Secretly Canadian's Nick Blandford wrote to the label's retailers and distros, "To say that [the price] was a shock to us is an understatement. Before approving the program, we specifically confirmed with ADA, Secretly Canadian's exclusive distributor, that Best Buy would not receive any sort of discount."

Matador president Gerard Cosloy told Pitchfork, "I don't deny for a second that using hot indie titles as a loss leader is a total sucker punch to mom and pop record stores. But without diminishing the significance of such an event, cool record stores should have something else up their sleeves besides using Best Buy as the bogeyman. We've used Best Buy for years, but the vast majority of our time and energy has been devoted to selling records through independent retailers. To date, we've yet to do any instores with Best Buy or any exclusive titles with a chain store or non-music retailer, and we continue to come up with specific releases [like the 99¢ Cat Power seven-inch and Interpol remixes] that you can't purchase anywhere other than indie retail."

So how do artists feel about the situation? "Artists have never complained to us that their record was in a chain store or on sale at a chain store," McCaughan told Pitchfork. "However, artists have often complained if they couldn't find their records in a chain store."

McCaughan was blunter on the Saki Store blog, arguing that "if [Merge] announced to our bands, especially bands that sell a lot of records, that their CDs would only be available at the cool stores and no longer at any chains, the roster of artists that Merge fans love would evaporate. If you don't think that's true, then you're living on a different planet."

"In any event," Cosloy told Pitchfork, "it should be stressed that [Matador] is pretty circumspect about which titles we choose to put into a co-op program at the chain level. Unless an artist's sales history, touring, press or airplay justifies such a thing, you won't see us trying to place 30,000 CDs on the shelves of your favorite appliance retailer."

Although the $7.99 promotion has ended, and most of the "Artists Outside the Mainstream" titles are now selling for a sensible $12.99, the principle remains: Don't take your local independent record stores for granted.

* Saki Store Blog: http://sakistore.blogspot.com/

[mikegee]

this story reminds me of the "american idol" tv show. IF you are an established artist, and you want to continue selling gold/platinum #s, ya really want to go with the big retailers for maximum exposure. the tie-in with american idol tv show is this;

the american idol show has featured musicians (rod stewart, queen etc etc etc) on their show, and the artists catch a lot of flack for being on the show, but they say on the average, the week after an artist guest spots on the show, their record sales automatically hit the roof, and if they have any records on the billboard charts, those #s skyrocket also. as lame as american idol tv show may be to some, its a given that if you are an established recording artist with albums-catalogs to sell, you will guest spot on it. it is huge exposure...

[dolivas]

Originally Posted by mikegee

this story reminds me of the "american idol" tv show. IF you are an established artist, and you want to continue selling gold/platinum #s, ya really want to go with the big retailers for maximum exposure. the tie-in with american idol tv show is this;

the american idol show has featured musicians (rod stewart, queen etc etc etc) on their show, and the artists catch a lot of flack for being on the show, but they say on the average, the week after an artist guest spots on the show, their record sales automatically hit the roof, and if they have any records on the billboard charts, those #s skyrocket also. as lame as american idol tv show may be to some, its a given that if you are an established recording artist with albums-catalogs to sell, you will guest spot on it. it is huge exposure...

That says alot about the artists who go on to begin with. Won't previous royalties, commercial deals, savings etc. gotten from their own work provide enough money to begin with so that they wouldn't have to go personally around and sell themselves out for something they know will lose them any kind of credibility they have. I'm pretty sure for most of them pure avarice and trying to prove that they still can shift numbers is the reason they do it, I mean helping a couple of kids sing for their dreams is disingenuine in the first place.

It would be cool if they actually did something in the US like the equally bland Eurovision contests do which would be at least force contestants to do their own proper compositions and truly see who is the best all around victor. Plus if some washed up performer want's to push some numbers they can have him as a judge and not completely whore him as part of the spectacle. Anyways, if people have to go through the mud of talentless clowns at least have a few turn out to be ABBA and be bigger movers in the long run than movers in the short run.

Maybe that's the movement in music distribution, trying to match the mainstream corporate market. The fleeting stars you ride them as short term high gain (for the company) commodities and dump them (i.e. by putting less money on promotion/recording budgets for that artist) when the next flavor of the month comes along that can help you build money. Im pretty sure the major labels are doing that but it I'm pretty sure with such a stagnant music scene out there right now dealers like Best Buy are trying to get into some of that market by trumping up indie bands they can use for a short term and then let their labels handle the dirty work once the next album won't sell.

[mikegee]

Originally Posted by dolivas

That says alot about the artists who go on to begin with. Won't previous royalties, commercial deals, savings etc. gotten from their own work provide enough money to begin with so that they wouldn't have to go personally around and sell themselves out for something they know will lose them any kind of credibility they have. I'm pretty sure for most of them pure avarice and trying to prove that they still can shift numbers is the reason they do it, I mean helping a couple of kids sing for their dreams is disingenuine in the first place.

It would be cool if they actually did something in the US like the equally bland Eurovision contests do which would be at least force contestants to do their own proper compositions and truly see who is the best all around victor. Plus if some washed up performer want's to push some numbers they can have him as a judge and not completely whore him as part of the spectacle. Anyways, if people have to go through the mud of talentless clowns at least have a few turn out to be ABBA and be bigger movers in the long run than movers in the short run.

Maybe that's the movement in music distribution, trying to match the mainstream corporate market. The fleeting stars you ride them as short term high gain (for the company) commodities and dump them (i.e. by putting less money on promotion/recording budgets for that artist) when the next flavor of the month comes along that can help you build money. Im pretty sure the major labels are doing that but it I'm pretty sure with such a stagnant music scene out there right now dealers like Best Buy are trying to get into some of that market by trumping up indie bands they can use for a short term and then let their labels handle the dirty work once the next album won't sell.

awesome points, i totally agree; it's REALLY becoming ALL about the money. Using huge established platinum selling acts/artists to contribute to/prop up "up and coming" potential huge platinum selling artists. and if they happen to go platinum, keep pushing them, but if they dont sell on the sophomore try, adios amigos... and then, there are some bad aspects to the music business too (hehe)