I would like to reiterate that nowhere have I argued against chain sales. We all know the perils, like higher return rates, that come with those kinds of sales and the potential benefits. But last I checked, I've never seen Borders, Barnes & Noble or Tower put stuff out below wholesale cost, or as was pointed out, at half of normal retail sale price. I don't claim to know everything about what goes on in those stores, but am I wrong on that? I hazard to speak for our retailers, and from the hundreds of notes I've read over the last week it's obvious that they're all more than capable of eloquently and stridently speaking for themselves, but I doubt that very many of them would deny indies the right to sell there either. I'm sure they'd much rather everybody shop independent retail, but I don't think many can make a great argument that indie labels should never sell to chains. Could be wrong but I doubt it.
To restate again, the central arguments here are:
- first, against playing the coop game with a retailer that has a long, long history of predatory sale pricing that allows them to offset their loss, making a loss leader a break-even leader,
- and second, against selling large volumes of stuff to Best Buy (which is the only volume they know) that will later be returned at a rate over and above regular chains, as BB further expands their indie stock in their refound "commitment to indie music."
The coop argument is already in play and is how we all got here in the first place. It remains to be seen whether the second part plays out, but I'm waving a warning flag now. Beforehand.
The other part of the label argument seems to come back to the bands and what they are owed by their labels, which is sales, damn the torpedoes! As unfair as some of the labels seem to feel to have the failure of indies laid at their feet, which is a huge extrapolation of my point but whatever, extrapolate away, you will anyway, and it's your right as an American and a blogger, it feels unfair to us that the whole impetus for the Best Buy Evil Coop is being laid at the feet of the bands. And it struck me this morning at 5am, after the dog woke me up (thanks Tiger!), that I can't say whether this is an unfair passing of the buck or not.
We have heard from labels and distributors and man have we heard from retail, but we haven't heard from any of the bands involved. I don't know any of them directly, but obviously people visiting here do. I would love to find out if the bands were consulted on a coop deal of this size, and on this one specifically. And if they were, were they told the possible consequences of such an ad buy? That while you can't discuss sale price with BB, that they have historically lowballed their sale pricing? Do they know their stuff is selling in Best Buy at half retail? Do they know what that 50% split on the ad buy that will hit their royalty statement is doing to the retailers that put them there? Have Arcade Fire, Antony, Chan, and Broken Social Scene actually come and said to the labels that this is what they want? I wonder, and would I love to have some of them comment about this because if they were not asked, or did not understand, then I'm wondering how they feel having their labels stake their defense of this program on them and only them? Seems to me either they signed off on it or they are being used as human art shields.
Before I try to get back to some real work to start my day, I would like to say "Welcome" to the traffic that we've had from BestBuy.com over the last 24 hours. We'd love to hear your comments on this as well but I'm pretty sure we won't. As a new BB One Stop customer for your sale items, I'd also like find out if we can get off of Credit Card and move up to 60 Day Terms? Credit references available from people you know! And are new releases returnable at 60 days or do we have to sit on them for 90? As a distributor, shouldn't we get an additional discount, say like 10%? We could really Move Some Units with pricing like that! Please let me know. Also the New Store Smell in Best Buy #814 is awesome! You should bottle it. But work on that customer service a little bit. Thanks for a weird week.
Patrick,
ReplyDeletenot everyone is "defending the program" as you put it. As I stated previously, we were unaware that Best Buy was going to sell our titles for $7.99.
Did Chan Marshall ever come to us and demand that her CD's be sold for $7.99 at Best Buy? Of course not. But we have had a number of bands and managers over the years get on our case over the years about their presence at the chain level. And Best Buy has been mentioned more than once.
Everyone we work with hopes to sell as many records as possible --- some are more versed in the ins and outs of how it is accomplished than others. But no one -- label, artists, etc.--- wants to do so at the expense of the independent retailers who have supported us since day one.
a couple of additional points ;
ReplyDeleteour host seems rather convinced that shipping a large quantity of CD's to Best Buy is a virtual guarantee of a high percentage of returns. Much as I appreciate the constructive criticism (always nice when someone else with greater insight is looking out for our welfare), I'll reiterate something I've stressed earlier : this is why you don't see every new release from Matador, Merge, SC, etc. sale priced at Best Buy or prominently displayed in said stores. There is some internal deliberation about which titles are most likely to succeed in that environment, and said criteria is a loose mix of sales history and what kind of crazy stuff might be happening with an artist after the release comes out (TV appearances, airplay, mainstream press, conviction for murdering the president, etc.)
So in other words, while there is always an element of risk, it's a calculated risk. For an artist that has already sold 100,000 + CD's (and perhaps as many as 20,000 of those at Best Buy), it isn't exactly a foolish gambit to have a ton of copies of the subsequent release available at Best Buy the day it comes out.
Are there indie titles that have been front loaded enmasse into chain retail that are no doubt coming back in droves? Most certainly. But it isn't my place to name them or to disect other labels' strategies.
None of that, however, is meant to condone any practice that undercuts the real music retailers that are our lifeblood. We try to demonstrate our commitment to said shops every single day and shall continue to do so.
The claim that a Best Buy program is charged back to the band is also not entirely correct. Not every label has the same sort of contract and definitions of what is or isn't recoupable vary from deal to deal.
all points taken.
ReplyDeletehowever, does this program best buy has created - gerard, chris, whomever -negatively effect the indie store, indie label, or indie artist?
if bbuy continues with these low prices and their stock of indie increases in great numbers while keeping with the extra low pricing...will this drive the indies either out of business or close to it?? (im talking over time)
isnt it a yes or no answer?
you who work with bbuy - does this concern you at all or is it just business as usual. i take no sides just sincerely curious.
thanks,
edgar
interested party
Edgar,
ReplyDeletemuch as I like the notion of good music reaching a wider audience at a low price, very little good can come of the nation's real record stores being undercut. While there's nothing illegal about popular CD's (or video games or DVD's) being used as a loss leader to bring consumers into a large department store, we're super aware of the position this puts smaller retailers in.
the short term benefit of selling a ton of one or two specific hot new releases through a big box retailer is more than outweighed by the impact on the rest of the retail community. But we've spent a good chunk of the last 17 years cultivating relationships with that particular community...and while we've been caught off-guard by a pricing scheme we weren't consulted on, we're also not going to stop selling CD's into chains.
Will Best Buy continue sell these sort of titles for $7.99? I have no idea. Probably depends on how successful this campaign was and how much traffic it brought into their stores. Though I wouldn't envision their selection of independent titles increasing beyond say, something they were pretty confident they were going to sell (or beyond what a label had paid to put on the shelf), that's their call, not mine.
I don't see how the above conditions, however, wouldn't have an effect on the bottom line for smaller stores.
We have a burden right now to try and think of ways to make the records we sell really stick out and feel like something special. Something that you'd pay $12 or $13 for instead of burning a .30 cent CDR or downloading it. Is that effort undermined by someone charging $7.99 for the same item? Or if the same people who supported an artist since day one can't stay in business long enough to share in their hard fought success?
I think you already know the answer.
We're all trying to reach those elusive "people who only buy 6 records a year". But we can't blow off the people who buy 60 records a year or the only stores they'd prefer to shop in. The former group aren't cheap to reach out to, and that's why we pick our spots.
I was able to buy $250 worth of stuff on Tuesday at 2 different stores, cleaning them out of Antony, BSS, Arcade Fire. All they said was, "wow. you must be a big fan!" or "what a shopping spree!" go for it.
ReplyDeleteRetailers who've been at this BB game for years probably have different experieneces. YMMV.