Two Tiered Future of CDs? (1 Viewer)

[Lee Scoggins]

You likely aren't going to move the same number of discs you could through a major, but you don't need to make equivalent income.

okay, but does this not reinforce my argument for a two-tiered market?
Maybe the indie artists use a lossy MP3 format until they get popular to attract major attention and get full resolution CDs. The economics favorability to the artist could change also, if things get bad enough for the majors under the current scheme...
Maybe the key is to kick off the "indie" concept and if successful for many artists (Jimmy Buffett is trying to do this for musicians with his label, for example), the majors will change their ways or continue to lose all market share over time.
It would be cool to see $7 CDs in a rack from indies alongside $14 discs from majors. The challenging part will be convincing the retailers to adopt a new sales channel from the indies as product.

 

[Jeff Ulmer]

I don't think you're going to see $7 discs in a rack for the same reason you won't see major label titles for that price - the cost of distribution and retail markup.

I don't think the two tiered system is a good one, since it dilutes the market. If an artist is going to spend the time and money to make an album, indie or not, they are going to want it presented in the best possible form to the end user, after all, it has to compete with everything else out there. It's not the manufacturing of the CDs that is the biggest hurdle, it's financing the project from inception through to finished product.

Retail doesn't want to change their distribution model, and I don't blame them. Buyers want to deal with as few people as possible, since it saves money all around - shipping, warehousing, accounting... not to mention being able to rely on product being in your store when it is supposed to be. I can't imagine trying to stock a store while dealing with each artist individually, that would be a nightmare.

For retail, there needs to be a single distribution coop, where independents can have their product available to retail chains on demand, much like the one that went under some time ago (I forget the name). The problem with that distributor was (like all retail sale) the stores want terms, then don't pay, so the distributor goes broke, hanging the artists out to dry.

It would work far better if consumers got used to buying direct from the artists, bypassing retail all together, except for the crap from the majors. The key is having the mindset that you can actually pay for something on the net, not just expect it to be free.

 

[Lee Scoggins]

Retail doesn't want to change their distribution model

I'm glad you brought this up. Please allow me a weird analogy that is close to home:
My day job is Managing Director of a new software company that is trying to change the way that general contractors do business...Well, let's just say that contractors to a person think they know best and want to keep doing everything the same way it been done for decades. Our solution is to force the concept upon them by tackling the key drivers of value, in our case the insurance firms and project owners. In our case, it is working albeit slowly which we expected.
In the case of retail distribution, all we have to win is the consumer and the musicians. With pressure from both sides, they will slowly change...or they may lose to file sharing (already happening)...or lose to better business model Internet retailers like Amazon.
A lot of revolutionary technologies and ways of doing business get started this way. The majors do exhibit a lot of power currently, but this is eroding and many resent such concentrated power. We also see this in the construction business.