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Wednesday, January 25

Can I Go Home Now?

Wow. What a weird day. Heartening in many aspects, a bummer in others, and pretty overwhelming on all fronts.

Thanks to everybody who has flooded the Inbox here. I'll get back to all of you as soon as I am able but rest assured that you have been heard.

Thanks to Mac (and Paul for the email and phone call) at Merge, Nick (and Ben and Paul for the emails) at Secretly Canadian, Windy from Stormy, and everybody else for writing well thought out and reasoned responses to all of this and posting their comments here. If you have not read their thoughts, please do so on the comments links below and please feel free to leave your thoughts as well. I've finally got it set up so you can do that. Sorry if you tried earlier and it didn't work.

I think that our point of view on this was made pretty well in my initial letter/post, but there are a couple of points I'd like to try to clear up.

First, nowhere in our letter do we accuse anybody of selling to Best Buy directly at a lower price. What is happening, and perhaps many people didn't understand the mechanism here, is that coop dollars are being used by a gigantor retailer to offset their loss when a piece is sold below cost. Tons of stores do coops. In fact, many are partially kept afloat by the extra dollars that coop dollars bring in. In exchange for cash or free cd's ("cleans"), retailers promise "Price and Position" to labels. Releases are featured at end caps or other high visibility parts of the store, titles are usually put on sale for the time of the deal, and a picture and of the record and sometimes a blurb runs in the paper. Sometimes a listening post is included for customers. 90% of those listening posts are bought, not put there by the grace of the store owner. Usually (but not always), the bigger the store, the more this is true. There's your lesson on the Coop Monster.

I have not seen the text of the deal with Best Buy. Our titles do not sell well enough to appear on their radar. However, these sorts of deals are pretty standard around the industry with a little variation. The difference in this instance is that by now, everybody knows or should know that Best Buy does not use their coop dollars in the manner that most other stores do. They are (in)famous for predatory practices and lowballing titles, and in this instance, they really lowballed. So even without selling to Best Buy at a lower price than everyone, what has essentially happened with the coop is that a large bucket of money was put in the corner that nominally had nothing to do with the pricing of the record on the invoice from ADA or RED or whoever. But for anybody in the chain of action (from artist to label to distributor) to claim surprise when that weird bucket of cash that just happens to be sitting in the corner is used by infamous lowballer Best Buy to offset their losses on selling it below wholesale cost, well, it seems a bit disingenuous to us here. Forgive our cynicism on that point, but we're from Chicago where the City That Works feeds itself on mysteriously appearing, large buckets of cash. But here only the Mayor can pretend he didn't know what it was for. (I'm shocked. Shocked!!) In the instance of the Best Buy coop, it may not be ruled illegal under US law, but that does not mean it is not wrong.

It also seems somehow to have been inferred that I was suggesting that selling these titles at Best Buy for $7.99 for one week was somehow going to kill the music industry and put every indie retailer out of business, perhaps by this Sunday. I didn't and obviously it will not. The first round of the Best Buy Merry-Go-Round (pre-MAP), happened over the course of about 3-4 years in the mid-90's. It didn't happen in one week, or one month, or even in one year. But over the course of their spree of lowballing titles and stocking large amounts of indie music, the momentum grew. Stores started dropping. Millions of dollars of returns started happening from Best Buy. You may be able to debate the direct causation of indie store closures to Best Buy pricing, but the correlation is there. What you cannot debate is the hit that every label and distributor who put titles into Best Buy's expanded music section took when the stuff just didn't sell. Pick a reason for it not selling. But it didn't. And it came back. And it hurt. A lot. And payment terms were extended and then extended again. And people went away. Labels went away. Distributors went away. (Remember Feedback? Say what you want about their management team, but their biggest customer was Best Buy and they got pounded into the ground...with the music publishers putting in the final dagger.) And now I hear that after 5 years Best Buy is again "committing to music" and expanding their music section. Great.

Labels and distributors may not tell retailers what prices they can set for their artists' work, but they can choose to play or not play the coop game with them on a case by case basis, based upon all the available information that they can muster and the short and long term ramifications of their behavior. And while labels may not be abandoning indie retailers, they can kill them just the same. Giving them water while you salt their ground will still kill them no matter how much water you pour on their poisoned earth. At some point you're wasting your water. And all that will be left is the Label and the Gigantor. Then try and grow your little bands.

So the whole point of this exercise for us is to raise some consciousness on this issue, perhaps with a spur from somebody who has been there before, has seen and felt the pain, and fears for the good of the industry that we've all helped build, big distributor down to 16 year old intern paid in records. Tons of people before us have busted tail for no money so people could hear music that wasn't filtered by the major labels and their work has led directly, for better or worse, to what we have today. And dysfunctional and dazed though the system may be, it still mostly works. And some of those people, people who I have admired from the moment I became aware of them, are a part of this mess with Best Buy. When we started CTD, one of our rules was to always examine what the people at Revolver, Mordam, and Touch and Go were doing. We did not commit ourselves to emulating them, but rather to a constant course of study and questioning of their actions and the reasons for them because they were run by people of wisdom and experience, people with their values in the right place who still managed to succeed in an otherwise abysmal hell hole of an industry. In our early years, we said over and over "If Touch and Go (or Mordam or Revolver) is doing something, then we'd better damned well know why and then decide if we should follow suit or not." And if we chose to go a different way on something, then it would not be in ignorance, but in understanding, followed by making as educated a decision as our pea brains were/are capable of making.

It pains me, pains me, to be spending my time and energy on this, questioning people for whom I have serious doubt that I could hold in any higher esteem. Some of the players in this I can mentally write off as long ago Lost Causes, succumbing to the natural way of things and growing to a point where they are beholden to others to an extent I can only imagine. Several here are not Lost, not even close, but their behavior is nearing that of the Lost. My hope is that this will at least stir some discussion in indiedom on all levels. Of course labels will still do what they will do, but at least it will not be in ignorance, their own or anyone else's, but in plain view. And others can take actions based upon those decisions that are plain to see for everyone. And perhaps, not probably, but perhaps, by dragging this ugly step child out from under the stairs, the basis for future decisions for large labels and distributors will change as the ramifications of their actions are taken into account, if for no other reason than for good old self-interest. And no one can say that they didn't know. That they weren't warned.

I've been called the Greek Chorus before, frequently not in a nice way, but in Greek tragedy the Chorus is usually ignored at the protagonist's great peril.

I'm pretty sure I'm right on the present situation, but I sure as hell hope I'm wrong about the future. You know people will ignore the warning sign that you place beside the cliff, but you put it there anyway, just in case somebody looks up and pays attention. And is not Lost.

On a more minor point, I really hope nobody seriously thought I was comparing any of us, or this mess, to MLK or the Civil Rights Movement just because I quoted him. I was no more doing that than I was comparing anybody to William Burroughs just because I quoted him as well, though a good game of William Tell does ring pretty close to our situation here, doesn't it? The point that MLK was making, as I interpret it, was one that I see as parallel to something like karma. That the arc of the universe bends toward the good, toward justice, very slowly, over time. I fear which side of this arc that we are on with this whole mess. That's all.

Metaphors for sale cheap. Below cost even!

Patrick

11 comments:

  1. Patrick,

    I appreciate your honesty and your candor about the BB/Indie Rock situation. We have been fighting these battles daily for decades now and my only solace(as always) is that for each instance such as this there is an interaction between myself and a customer where I can hopefully help them discover some music they might not otherwise hear. As an indie store owner and member of a coalition we have learned to focus on what we do right and to exploit the things which the boxes cannot.
    The frightening thing out here in indiedom is wondering where the sales have gone? Yesterday I sold 3 of Chan's CD and 2 on vinyl...those numbers should have been triple or quadruple that...so you are correct that it does hurt when the CD is 5.00 cheaper down the road. We do what we can, but at least we do our best to keep the tradition of the old record store alive. I read a lot of reactions to your diatribe(which I posted on my blog by the way...) and heard a lot of posturing about how important the indies are from people who never advertise with my group of 7 indies(and I would know since I book the ads)...most barely realize we still exist.

    Thanks for writing what you wrote, and the MLK comparison was spot on IF you read it...

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  2. I checked stock at the local Best Buy today. The $7.99 sales titles were all in stock w/people obviously purchasing the new Cat Power and limited edition Broken Social Scene, as their endcap was depleted. Mostly, this particular best buy was a medium to deep catalog source for major label titles at $13.99 and $14.99. I'm checking stock on Broken Social Scene and Arcade Fire and seeing if we should just restock via best buy's new "onestop" operation. They had "burn" by Deep Purple on cd (the special edition) for $14.99 and i was tempted to have it share some shelf space w/"fireball" but i'll wait until I hit streetlight or amoeba again. My vinyl is awful scratchy.....

    I found one revolver manufactured title, by the Butthole Surfers , filed under "H" (album title...humpty dumpty). Sweet!

    I can see all sides in this issue, but i do know how Patrick feels here. i'm glad you are stoking the flames sir!

    And our new GM here, Mr. Toppe, says that Best Buy must be deciding now that all independant label music is by "developing artists".

    I guess they must also conclude that nobody would pay more than 7.99 for a developing artist like Cat Power or Arcade Fire (even developing artists can sell 100,000+ copies , right?)

    These nationwide programs at Best Buy can cost a label , so even if there is no discounted price to Best Buy, the labels normally can expect to see a bill/ chargeback from caroline or ada
    in the thousands of dollars a few months after the programs end.....and maybe some returned stock?
    It's a risk for the label, no matter what, and many labels like merge or sc (or any of revolver's distributed labels) are working w/ artists who feel that they will get better coverage should they go to a major. So, some people have to consider working the machine in ambivalent fashion.

    This is one way an indie label can say "hey, we get coverage too, and now anyone (hypothetically) can get our important titles.

    Having said that, Glen's comment about how many less he has sold of the new Cat Power is something that Revolver has heard before from it's best accounts when it comes to "hot" albums and how many copies were sold vs. how many the store expected to sell. It's not all Best Buy, but they aren't going to be helping us out here.

    On the bright side, independant distributors and stores can now buy matador w/out having to call Rusty.

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  3. and maybe i should learn the correct spelling is "independent". i couldn't use "spellcheck" carrying the flag and all....

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  4. Rusty Clarke is a wonderful, funny, hard-working, insightful, passionate music lover. Anyone who doesn't get to speak to her at least a dozen times a week is a poorer person for it.

    This particular discussion is being well covered by many others. So I'll keep it short and sweet. Matador was unaware the Cat Power album was going to be sold for $7.99 at Best Buy. We were as surprised as anyone.

    Windy's points about chain stores routinely getting away with street date violations are well taken and this is certainly not something we condone or wish to turn a blind eye to.

    Without going through a laundry list of what we do at indie retail, we feel pretty good about our level of commitment to record stores that actually care about music...and equally grateful for their role in helping our artists, the famous and not-so-famous.

    Glen's situation, while alarming, is not universal. if yesterday's early results are anything to go by, the vast majority of independent stores we've talked to are off to a pretty fast start with the new Cat Power album. But yeah, clearly those stores are at a competitive disadvantage if someone else is selling the same title for $7.99. My only point is that not only was this $7.99 scheme not our idea, but we make a solid effort to do co-oping, discounts, etc. with stores that don't sell washer/dryers, too. I can't remember the first or last time any of our bands did an instore at a Best Buy. Nor do I recall our ever sitting around trying to come up with exclusive items you could only purchase at a Best Buy.

    Mr. Held is correct in saying there's an element of risk in entering into a program with BB, but that's probably why you aren't seeing every title on Matador, Merge or Secretly Canadian represented in that infamous circular or on the shelves of every Best Buy account.

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  5. Hey Im sorry if I said something to the effect the labels were giving best buy a break. I dont know anything about their deals. What I meant to say was I am like anyone else and want to sell as much of my product as possible whenever and wherevever it may be and I value our resellers. I respect our sellers as fellow businessmen and I expect them to act accordingly. If a rogue vendor decides to act like a fucking asshole and sell below cost, he will be a vendor no more.
    Its my decision and its a simple one to make. Too many times bands and companies make concessions only to wind up pissing in the wind. I wont sell to wal mart and it looks like best buy just got added to the list as well. To celebrate this big event our whole catalog is on sale(both releases, and more coming soon!) and we welcome new accounts! I encourage everyone to keep the faith, stay true to their friends and listen to more George Brigman. Unfortunately we just dont fit into the Best Buy scene.

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  6. im glad to see this discussion happening, and it really highlights a new angle of the age old question in independent music. how to be profitable and maximize exposure for bands while maintaining credibility and supporting the infrastructure that allows you to exist. its hard to believe that the practices of Best Buy are not more well known to labels inking deals with them, and i hope that the returns at the end of this dont force anyone under. Otherwise the only solution i see is for real music fans to continue buying records at indie outlets, and hope this sort of pricing will breed new fans that migrate to indie stores more than it cuts into those stores bottom line. Wrote about this on my blog too (orstweatherever.com), would be curious to see who else is doing the same...

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  7. hey wwe -- thanks for the comments. a couple things: we don't "ink deals" with stores like best buy, nor do we "get into bed with them" as someone else has implied over the last couple days. (the author of said email probably "gets into bed" with shell oil, time warner, monsanto, and a host of other lovely corps every day without thinking about it)

    on the "huge amounts of returns swamping the label" issue -- it is a concern, and we often are talking down a distributor or store on the number of cds they want to bring in, precisely to avoid this situation. no one is holding a gun to anyone's head in terms of how many pieces you "need" to ship to them. if someone places an order that seems unrealistic, don't ship it.

    as i've said before, best buy doesn't want 99% of what a label like merge releases anyway, they could give a crap unless they either a) know it's going to sell a lot or b) have a label (read: a major label) who can spend a bunch of money with them to try and "break" a new band. we are not that label, since we can't afford to gamble with that kind of money. hence, a record like the arcade fire record (a proven seller) you will find at best buy, but a portastatic, destroyer, or tenement halls record you will likely not find there.

    we have no illusions about this, despite some folks here warning us that we'll "be sorry when best buy abandon's us" -- since when were they ever on our side? independent retail is and always has been our base.

    however, when a record sells as many copies as the arcade fire record, it is not a case wherein if it were not in best buy, they would have sold just as many, only at cool stores. that is a fantasy. they've sold a ton of records at independent retail from day one, and of course as their audience grew to include people who just "heard a song on the radio", they also eventually sold at the chains.

    and as long as we DO have a band like spoon or the arcade fire, we can't abandon them either -- i didn't start a record label to be a certain type of label ; in other words, we didn't set out saying "i want to have a small label" or "we want our label to get big" -- it was just "we want to put out records we love" and started doing it...and we love the arcade fire and would love them if the album had sold the 10K copies we predicted it would. but my point is, they kept selling records and as their label we need to keep up with that.

    i don't want to have a label that says "we'll sign you, but if your record does really well you're on your own, it will not be stocked in chains" -- because we wouldn't be able to sign a single band with that rule in place.

    no bands, no label, and that's not what i want to have.

    i think in some markets the climate is such that it's easier for an indie to coexist with big box stores than in other places, but i still think generally that the people who shop for music at best buy are simply different people that those who shop at a store like cd alley here in chapel hill, and if they ARE just a different demographic, as i believe they are, then everyone has to adapt to the fact that we are selling records to different groups of people (well, as a label we are, not as an individual store) with different releases, and we need to have multiple approaches in order to survive. hopefully we manage to do this (and have done for 17 yrs), and for the benefit of everyone involved.

    you are correct about the tension (inherent where capitalism meets art as i mentioned in another post) between doing the best job possible for our bands while supporting the infrastructure & culture that has always supported us.

    i've been thinking about when i worked in a record store, i posted this already on the merge boards but it relates:

    I'm wondering where everyone's outrage was when this all started happening 10-12 years ago... THAT was the time to keep indie retail where it was in terms of health & viability in more markets. here in chapel hill we are lucky and the stores stuck around. but i worked in indie retail in the early 90's (schoolkids, still going strong seemingly) and while it was the indie store in town, what seemed to keep it going was big paydays when MAJOR LABEL releases would come out -- sell tons of the new metallica, pearl jam, guns n roses, whatever, on a tuesday and then sell 3 copies of a Clean or Halo of Flies the rest of the week.

    the people wanting those major lable titles i would say are who indie retail failed to keep when the big box stores opened up. i think the type of people who were then looking for pussy galore or barbara manning or beat happening records are still shopping at indie retail either physically or online.

    somehow schoolkids has survived (and grown) and chapel hill has added a great store (cd alley) since then.

    anyway i guess one of my points is, to hold labels like merge and matador responsible for indie retails woes is a bit off... things fragmented, and merge has continued to support independent retail while also still selling some of our titles through more mainstream outlets as well."

    to me, it was, unsurprisingly, MAJOR labels that abandoned indie retail, and a long time ago. it's so much easier for them to do business with places like best buy or tower or borders or whomever.

    so to have fingers pointed at us? i don't buy it. it's easy and it's satisfying for "anonymous" to get on a blog and vent, but what the hell are they doing to bring people into indie retail? nothing, i would wager.

    so one symptom of the fragmentation is that the independent marketplace has narrowed to a point where it seems like stores like cd alley here in chapel hill pretty much cater ONLY to indie buyers... i mean, they'll have the next decemberists record on capitol i'm sure, and records like that, but you get what i'm saying. it seems that one has to be able to survive in a niche (even if it's a pretty broad niche -- indie music -- that covers tons of great music, incl indie rock, jazz, world, punk, experimental, electronic, etc), the niche defined by people who love music, not the people who heard a song on the radio.

    now, those other people MIGHT come to an indie store to buy a record they heard on the radio, but indie retail has to fight for them in order to steer them away from a best buy, because doing something cool is just NOT in their daily routine; they are not aware.

    we do what we can to make them aware, but we know, too that aside from a couple artists, merge also exists in a niche, and while we'd like as many people as possible to be exposed to what we think is great music tons of indie labels are putting out, we know we always have to be prepared for a niche existence.

    starting to get that rambling feeling, so i'll sign off for now.
    thanks
    mac

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  8. as a music buyer for a not so large chain - i constantly and very recently was sent a reciept from from one of my staff who bought a CD at Best Buy before street date...i know that if one of MY stores broke street date - i would get penalized. (whatdo they do now- ? fine you? "cut you off" so you can't buy direct anymore) i know that if Indie records in debuke got busted breaking street - they would be penalized, too hell, you'd read about it in Billboard, Ed Christman would wet himself to write about it. The LA Times would probably include it in their next expose on the demise of indie retail. what do you think happened to BB for breaking street? not a fucking thing. the power of the P.O. is mightier than integrity. there are no fair business practices, and it's no longer a level playing field. The house always wins. we are fighting a losing battle. The P.O. power the big boxes weild (to music and media outlets) has the bat, the ball, (all of 'em) the glove and they even own the playing field (Best Buy Arena coming to your town soon) I think the indies should run with the act of buying their CDs from Best Buy, take the co-op dollars and use it to book ads telling people how you are being undercut - that you don't sell for $7.99 because you're forced to buy it at $12.50 (or whatever AEC charges these days) (Use it as the tag-line for your ads)I also think all Indies should get together and go with the rumour i heard last year: (that didn't happen) Nominate Best Buy for Distributor of the Year! Maybe THEN the NARM board will hear you, maybe THEN the RIAA might get wind.

    but probably not.

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  9. 12 years ago I was working at a Tower when the one thing we feared most happened. Best Buy took up residence directly across the street. We had all heard what they were planning to do. We thought that buying one of everything was crazy insane...and it was. We sure weren't quiet about it either!

    The lines were instantly shorter, the aisles empty. MTS raised it's prices, gave all the buying jobs over to the regional offices & drove out the music lovers who had worked there soley for the love of music (it sure as hell wasn't the paycheck). All I wanted to do was turn a few people on to Jawbreaker.

    I've been working for indie labels & distribution ever since & I still make only $2.50 more than the minimum wage in my state. I sacrifice a living wage for my love of music everyday.

    What doesn't help our industry?
    *the uber-cool clerks in indie stores that to this day make me feel like an idiot (& I've been doing this since 1990!)C'mon- be cool & helpful & the customer will come back. This is a small group of elitest but people notice rude behaviour much more than kindness it seems- how many times do you only hear about something you've done wrong not the things you do right? (Of course, the BB clerks are a waste of breath most times as well.) Remember High Fidelity?

    Barry's Customer: Hi, do you have the song "I Just Called To Say I Love You?" It's for my daughter's birthday.
    Barry: Yea we have it.
    Barry's Customer: Well, can I have it?
    Barry: No, actually, you can't.
    Barry's Customer: Why not?
    Barry: God. Do you even know your daughter? There's no way she likes that song. Oops, is she in a coma?

    *too many bands putting out too many records on too many labels...there IS so much talent out there, but for all the bands unwilling to tour, promote themselves or even stay together...it's unreasonable to expect any record store outside their hometown to bring it in

    *one-stop pricing...don't get me wrong- they really support the indies, but retail is spending an extra $1-2 bucks on every disc they order "conveniently". Go direct with the label or indie distro & save money & also maybe get promos more often.

    *failure on the part of us all to relay the importance of an album as a complete work of art. I have friends content to download "tracks" from the internet. Napster did a great job convincing people that music is valued by the single track! What did we do to keep the sanctity of the art alive? (I sure love what Merge recently did with vinyl sales- that's pro-active!)

    *major labels chewing up & then spitting out bands they deemed "the next big thing" when their 2nd album tanks...be forewarned any indie act being courted by the majors- they don't care about you- only how many records you'll sell. Can someone say Dandy Warhols, Possum Dixon, Cold Water Flat, my love Jawbreaker?

    The list of wrongs go on & on (I don't even understand the politics of big music biz- this is from my base level experiences). I hope that we're here to talk about the problems, put our heads together & come up with constructive solutions- together. Cuz they're gonna divide & conquer & finally crush us into a memory if we don't.

    This current situation, I'm sure, is tiring us all, not to mention distracting us from our work, but it's been lively & interesting all the same.

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  10. First, I think Anonymous (who posted directly before me) made some excellent points which I'd like to comment on.

    I will echo the sentiments regarding hipper-than-thou indie store clerks. While it's not really an issue where I live, I have certainly experienced it. Any business can benefit from good customer service, even successful businesses. The worst jerk-clerk experience I've ever had was in, what I consider to be, one of the best indie record stores in the country (and several NARM nominations for that store seem to back that though up).

    I don't really think that there is such a thing as too many bands, or too many records. In the end, it's up to the bands and the labels and a bit of luck. There have always been great records that, for one reason or another, have fallen by the wayside of critical and/or commercial success.

    Re: one-stops and buying direct. This is SOOOO important. I totally understand the convenience of one-stops. But if time in the day allows, a retailer can save an immense amount of money by ordering direct with labels and small distros (like Carrot Top and ourselves). And stores will definitely get more promos and posters (and attention) if they have a direct relationship.

    re: the value of the album. While I do think that the value of the album may not be what it was, I don't think it is quite a crisis. "Album rock" was born in the 70's. Prior to that, the music industries was sustained largely by 45s. Certainly by the 90s, people just stopped buying singles (for the most part). Digital downloads (I-tunes, Napster, whatever) are the single of the 2000's. I think we are only so threatened by them because we've gone 10 years without a viable single format. As the single format died away, the trend with major labels has been to take a single or two and build in 50 minutes worth of absolute crap to fill up a CD so that people would buy it. With the dawn of digital downloads, I think we will see some Top 40 artists putting out singles alone, not even bothering with albums. So long as good bands and independent labels stay loyal to the concept of the album as complete work, I think the market will continue to sustain it.

    all for now.
    Nick

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  11. i've have a humorous story about the last time i attempted to purchase a cd at Best Buy (due to the lack of a decent record store in the Overland Park,KS area)---i went in looking for a copy of Superchunk's "Here's To Shutting Up" a day or two after the release date when a BB clerk came up and asked if i needed help...."I'm looking for the new Superchunk cd" i told him--when he was unable to locate it on the shelf he told me to hold on a sec and he'd check the computer---about 5 mins later the clerk came back and said "Sir,the last Supertramp album came out in 1980" to which i kindly thanked him for his troubles and walked out of the store

    Luckily,a couple of friends of mine got fed up dealing with the bs that goes along with working for CD Warehouse that they opened their own store (Needmore Discs-75th & Nieman in Shawnee)so i've never had to go back to BB to look for or purchase a cd--even if they do have it at a lower price--and since my Supertramp encounter i've found alot of other reasons to despise Best Buy and have basically boycotted it completely but this just adds to the list of reasons to....thanks

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Be nice!