Greg_Y
Screenwriter
- Joined
- Mar 7, 1999
- Messages
- 1,466
(and yes, I saw this at Fark.)
http://www.courierjournal.com/featur...020816pop.html
http://www.courierjournal.com/featur...020816pop.html
When Bruce Springsteen's new album "The Rising" went on sale a couple of weeks ago, John Timmons did what a lot of fans did. He rushed to the megastore Best Buy -- in this instance, via its Web site -- and bought the heavily hyped CD.
But he didn't stop at one. Timmons bought 150 copies.
Not to engage in some whacked-out form of musical evangelism but to sell in his own record store.
Timmons, owner of ear X-tacy in the Highlands, was taking advantage of a price war that is roiling the music industry these days. At $9.99 (shipping included), the Best Buy CD cost less than Timmons' distributor was charging, meaning he could sell it at a discount and make a profit.
"It's just another aspect of the industry that is totally insane," said Timmons, a longtime music retailer.
It's not the first time he has done this, and it probably won't be the last, as long as the huge stores continue to slash prices on their CDs. Timmons bought multiple copies of The Dave Matthews Band's latest release, "Busted Stuff," at Best Buy for the same $9.99 price as the Springsteen CD and resold them for $12.99.
"I think the music companies are desperate," music industry analyst Michael Nathanson told The Boston Globe. "This is what they have to do. It's not going to be pretty, but it's great for consumers."
No doubt about it: The big record labels are getting whacked worse than a turncoat on "The Sopranos." If the explosion of online file-swapping was the first blow, the lagging economy completed the double-whammy.
According to the Recording Industry Association of America, the labels' powerful lobbying arm, the number of albums shipped to stores dropped 10 percent from 2000 to 2001, from 1.08 billion to 969 million. This year isn't expected to be any better, hence the priceslashing.
The debut album from the Australian punk-pop band The Vines, for example, hit major stores at $6.99 -- an unheard-of price in an era where CDs had been inching toward the $20 mark. Circuit City, meanwhile, went even lower for soul singer Amerie, marking her new CD down to $5.99.
While the big chains are taking advantage of the industry's woes, independent retailers must hustle if they want to get in on it. That's because the labels are not always extending the deep discounts to the smaller stores, said Ben Jones, owner of Better Days Records.
"I still have to pay $12.65 to my distributor, whether I buy one copy or a thousand of them," said Jones, who has a store in the West End and another in the Highlands.
Even if Jones were to buy in bulk from Best Buy or Circuit City, simple arithmetic says he can't beat the big stores.
"This situation is almost impossible for us. It's just another way to put us (independent stores) out of business."
Yet the deep-discounting isn't entirely the doing of major labels. In some cases, it has as much to do with microwave ovens and big-screen TV sets as it does Jimmy Eat World or Ashanti. In the same way a car dealer hands out free hotdogs to lure you onto the lot, large chains use CDs as a way to attract potential buyers of big-ticket, high-profit appliances.
"They're using them as a loss-leader to sell refrigerators," Timmons said flatly. "They see music as a commodity, while we kind of depend on it for a livelihood."
Timmons, however, doesn't share Jones' dour assessment of the megastores' price-cutting. Even though he refuses to sell the Springsteen CD at a loss, he can still discount it thanks to Best Buy.
He believes his loyal customers appreciate that, citing his willingness to stock music by obscure artists outside the mainstream and his insistence on hiring knowledgable staffers as two things ear X-tacy customers are willing to pay for through prices higher than the chains'.
Still, he knows he must keep a wary eye on the marketplace.
"I want to create the image that, yeah, we have competitive prices as well. Selling CDs from $7.99 to $10.99 creates that perception that we're competing with the other guys."
Jones has responded by giving away more and more promotional material, such as T-shirts and posters, known in the industry as "swag," with select CDs.
"It's hard on us, but it's not the end. The independent guy is just going to have to be more savvy."
Meanwhile, Better Days also does a thriving trade in used CDs, a chunk of the business that the major labels all but ignore.
"I tell people who come in here looking for a new release to wait until we get it used, and I can sell it for half-price," Jones said. "You won't have it the first day it's out there, but it's one way to go."
The summer of the $6.99 CD makes for an interesting economic debate: Have the consumers finally won, or is this just a momentary aberration?
Timmons said he has long believed that the record industry can combat listener indifference and online piracy simply by lowering prices. While one could argue that people are willing to pay outrageous sums for sneakers and concert tickets, you can't easily rip those things off via the Internet.
"It's easier to sell a record to somebody for eight bucks than for 15 bucks. Someone is much more likely to take a chance on something they are unfamiliar with if it is selling for $7.99."
One hopeful sign is the success of The Vines' record, "Highly Evolved," which seems to have justified the deeply discounted price when it made its debut at No. 11 on Billboard's Hot 200 album chart. Another, said Timmons, is the willingness of some labels to cut the wholesale prices on older records in their back catalogs.
While he wants to believe the major labels have finally gotten that, Timmons said he's still not sure most record executives realize the level of discontent among the record bins.
"There are a lot of people in the record industry who have no idea what it's like to go to a record store and plop down $15 for something."NP: Charlie Hunter - 4/27/2001 - Vienna, VA
