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Tuesday, January 24

Best Buy BS

Link to Latest Best Buy ad mailer 1/24 Street Date
Best Buy BS


Pick one:

1. A bad dream that returns every time you close your eyes, no matter how many pages of your book you read in the middle of the night to try and shake it from your mind.

2. A portrayal of the myth of Sisyphus, doomed for eternity to roll his boulder to the pinnacle of a mountain with great exertion only to have it roll back down into the valley so he could begin again. Forever.

3. Real life karma in action, actually visible to the naked eye, where past acts affect future lives and where sins are punished into eternity until a lesson is learned from them enabling you to move on.

4. A manifestation of Martin Luther King, Jr's quotation about the Arc of Justice. "The arc of the moral universe is long, but it bends toward justice."- Dr. Martin Luther King, Jr.

We have been here before, and it was awful. In the 90's, labels hungry for sales (and who isn't?) rushed into deals with Best Buy, and other big box chains now since defunct, that allowed Best Buy to sell below cost with a minimum amount of pain, if any, and then make money off the folks lured into the store on their toasters and TV sets (now iPods and Xbox). Soon, indie stores all over America started going belly up. Pier Platters. Go!. Final Frontier. Rockaway. On and on and on. Remember, this was when file sharing still consisted of a chrome C90 without the holes punched.

After freeing much of America of their indie retailers, the accountants for Best Buy and the others realized the age old maxim, you can't make up for a negative margin with volume. Their margin was hurt even more when the returns started piling up. Millions of dollars of returns. Why? Because of their size, they were and are unable to pick and choose what might sell at their stores. They have no in-store culture to support indie music sales in knowledgeable floor staff, in-stores, magazines, a comfy couch, upcoming show listings, or a cool kid behind the counter to play the new stuff and talk with customers not only about what's new that week, but what's coming out next month and recommend that cool record by the Slits you might really dig if you like Bloc Party. You like Antony? Check Jeff Buckley or Van Morrison or Current 93's "Earth Covers Earth." At Best Buy, the single most frequent employee comment is "When's my next break?".

The combination of poor buying in huge quantities and their lack of ability to sell through eventually lead to so many returns that Best Buy stopped carrying indie music almost entirely. The huge racks at Best Buy that had housed music were suddenly empty, and then shortly they were gone, slowly to be replaced over the next few years by discounted DVDs and video games.

In the wake of this prolonged disaster lay cities all over the country without record stores, labels either driven to bankruptcy or crippled for years by 50+% returns on titles for which bands were already paid and saddled with enormous pressing plant bills, and a public who had finally realized that maybe music wasn't worth what it always had seemed. Maybe $16.98 was too much for a CD. Maybe $8 was the right price. That's what the labels and their complicit artists were telling them. And this dent in the collective music consciousness came at the dawn of broadband internet service and file sharing. If it wasn't worth $16, maybe it wasn't even worth $8. Maybe free was the way to go. If the stores, labels, and bands don't value their music enough to sell it at a decent price, why should the music fan feel any differently about it? So the whole industry had unwittingly conspired over three to four years to torch the value of an album at just the right time for the Best Buy shell game/Ponzi scheme to collapse in on itself, leaving an opening for Napster to tap the wired music junkie on the shoulder and take advantage.

Fast forward through rampant unchecked file sharing/piracy, MAP, oops! not MAP that's illegal, RIAA lawsuits against music fans, the boom of iTunes and Spitzer investigations of price fixing.

Why are we going back there again? Voluntarily even? Why are labels AGAIN selling to Best Buy at rock bottom prices and then buying into coop programs (billable back to the Artist of course) that allow Best Buy to break even selling their cds so cheaply-not only below retail cost, BUT BELOW DISTRIBUTOR WHOLESALE COST? At prices even below the album price on iTunes and others! So now you're all devaluing not only your packaged goods but your digital ones as well. If it's worth only $7.99 with package at Best Buy, why is it worth $9.90 at iTunes? Consumer answer: IT'S NOT.

When a distributor can buy your stuff with tax at Best Buy cheaper than from you directly, something is wrong. Very wrong.

And even better, I have heard that Best Buy is not only planning on targeting 10-20 of the hippest titles, but greatly expanding their indie offerings. That's great! They've set this up for a complete repeat of the mid-late 90's. Drive the final nail in the coffins of the remaining independent retailers, at least those savvy enough to have staggered through the first round and survived unlike their bankrupt counterparts across the country. Mortally wound the labels and their thin margin distributors with staggeringly high return rates a year or two or three down the road. Leave the bands without stores, labels or distributors to support them. And then, finally, when the bean counters with the short memories at Corporate figure out that it's not working for Best Buy, again, they slash their music sections back to a Top 40 and go back to ignoring it. Except this go round, it is entirely possible that there will not be enough of an independent music industry remaining to survive and bounce back. What's left? A rush to cash in on high volume for a few frontline hip titles leads to the elimination of the entire culture that nurtured the baby bands to the point where anybody even paid attention to them in the first place. Where they were suddenly cool enough to move out of the zines and blogs to get featured on the OC or VW commercial or the latest Farrelly Brothers movie, and then get big enough where it actually seemed to make sense to somebody that this might really sell at Best Buy. Cash in now and simultaneously salt the fertile earth that allowed it to happen in the first place, killing any chance of it happening again.



Worst case scenario? Fear mongering? Maybe. Except probably not. Because WE'VE ALREADY BEEN HERE. Sisyphus HAS rolled this rock up this very same god damned hill. Unlike Sisyphus, however, we are not doomed to hell for eternity to feed the Best Buy monster that will eventually eat us. We have choices. And we have history, RECENT history, from which to learn if we will only heed it.

And here is the saddest thing to me. Everybody in management at Touch and Go, Caroline, Secretly Canadian, even Matador, and yes Best Buy, has been at this long enough to know better. The difference is that Best Buy doesn't care. It doesn't have to. It will be around in 10 years selling, uh, whatever, HD HUDs for wireless iPod video and other consumer electronics, and if this unsavory practice continues, you and we will not be. And I guarantee you that if they even notice, nobody at Best Buy will care.


"He gives the American people the finger and barks out: 'I got mine, fuck you! Every crumb for himself.'"-William S. Burroughs "The Western Lands"


In the meantime, I'll head by Best Buy Stores #323 and #814, (aren't those great names!) on the way home tonight so I can buy their stock on titles we carry, give the kids who come in an empty shelf to look at hopefully driving them to an indie store and putting them off from the hassle of returning for future sales, sell them where we can and then return them to you at a profit.

Thanks for a great Tuesday. Thanks for your foresight. Your check's in the mail.

Patrick Monaghan, President
CTD, Ltd./Carrot Top Records, Inc.

4 comments:

  1. I think this falls under the dont bite the hand that feeds you category. I'm a reluctant participant in this whole mess as I dropped out 15 years ago and put my little label, Bona Fide Records, on ice. Last year we restarted and put out two George Brigman CDs to try and thwart the sales of two European bootlegs of George's material From Radioactive(UK) and Synton(Austria). I havent figured out the distribution situation yet as it seems to have gotten worse. It just does not make any sense to make sweetheart deals with chains while you thumb your nose at the independent stores whom remain the lifeblood of any small company.

    As you succinctly pointed out, getting your product in the stores is no guarantee of sales. Most of those 7.99 CDs are watered down attempts at the mass market or simply crap I wouldnt want to buy. The whole indie scene is so overrun by bands it practically chokes the market for the bands deserving of attention. Having charts in countless categories and skimming off the top only insures that you get a bland crosssection of bands who are generally interchangable. Stores like Other Music, Aquarius, Dusty Groove,Ameoba, Joes Record Paradise, Low YO Yo Stuff, the True Vine etc etc should be commended and placed on the pedestal they deserve.

    They are the ones that deserve any break, not the mega stores. The mega stores desire to sell indie is commendable, but let them cost cut the majors and give the indies a chance to make what little they can scrape up. My product is not made for megastores, but made for fans by fans and our DIY mentality runs deep. I urge everyone to shop their local independent retailer so every store does not turn into a carbon copy and, by default, the music as well!

    Some lessons are hard to learn, but I fail to see how the $7.99 price will help anyone at all, except Best Buy. The desire to sell prouduct must not be so great that you trample over your friends in what may even be a futile effort to sell more copies.Patrick, I am on your side with an emphatic, Amen, Brother!

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  2. pm,

    i don't know a lot of the titles on this list (no surprise, i don't really keep up with the "scene"), but it just baffles me that the few i do recognize, which i can guess have sold or will sell six figures, would be discounted. these should be the last titles anyone would discount: everybody is glad to pay full price for them! why discount titles you don't have to work to sell? why butcher the cow that gives milk? not that i know a single fucking thing about this business...

    of course i agree with you. the problem is that as soon as best buy turns one of the big players (matador, t&g, whoever), then the others decide that they better play too lest they lose whatever edge they think they see. you know us, we never buy into any of these rip-off sales programs at stores that don't even sell anything for us. but i guess coming from someone that runs a label that is not even on their radar, that statement doesn't carry much water in the context of this argument.

    the future looks bleak to be sure. i have been telling everyone who has recently asked about the state of the music business that i can't even guess if what we currently do will be a viable business model in 5 years. will the retail cd become the new vinyl, only bought and sold by the 1/10 of 1% of the population that gets totally geeked at the notion of listening to something new and unusual?

    all this is also a good analogy for the american economy in general too. we
    allow large corporations to foment the wholesale destruction of the very
    markets they work in (and dominate) and then watch the captains of industry
    (archaic term that, how about "profit pirates"? "margin maulers"? "pension
    plunderers"?) ride into the sunset on golden parachutes while the out of work employees are left sitting numb on the side of the road wondering what happened, and the taxpayer foots the bill for the cleanup and grumbles "oh well, business as usual...".

    time for a revolution.

    regards,

    mr. kranky

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  3. Independent labels, if they are fortunate enough to release a record that actually ends up being relevant for a big box retailer to carry, face quite a dilemna: stay true to their indie retail support base or take a chance and opt-in for potentially bigger sales via retailers that serve a different type of consumer.

    As the former head of sales and marketing for Grand Royal Records for over 7 years, I sympathize with the struggle labels like Matador, T&G, etc. must go through when deciding to do these type of "deals with the devil." It's certainly true that you can get burned. However, I refuse to categorically demonize these labels for making a good-faith attempt at trying to sell more records via different retail avenues.

    That said, I think it is incumbent upon independent labels to do everything they can to "super-serve" their independent retailer kin in every way possible to make sure they stay healthy, profitable and viable sources of new music for the adventurous music consumer. After all, independent retail is where it all starts and those of us running independent labels should not forget where our most regular and reliable source of support comes from.

    CJ/Prana Entertainment

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  4. I agree, it's unfair, but I will not (as a TG employee, still)
    find fault with those labels that chose to do this with Best Buy. Harp all you want, but these are the avenues - labels either take them or leave them.

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Be nice!