The 800lb gorilla vs a 10,000 gorilla

[Rob Babcock]

I have to say I take a perverse delight in the idea of Wal-Mart sticking it to Big Music. As much as people love to hate them, they're apply a lot of pressure on the industry to lower CD prices. WM has "hinted" in no uncertain terms that if the recoring companies won't lower prices on CDs, they might easily decide to stop carrying music in favor of something more profitable.

Wal-Mart sells over 1/4 of all the music that gets sold in the US, yet that accounts for only 2% of Wal-Mart's total sales. So they could quit selling CDs and not miss the money, but the recording industry would take it right between the cheeks.

A quote- ""If they got out of selling music, it would mean nothing to them," explained another label executive. "This keeps me awake at night."

Another juicy one: One major-label rep is reported to have said, "I don't think there is a music supplier in America who really enjoys doing business with Wal-Mart."

I love it!

 

[Seth=L]

That is funny, and disturbing. Wal-Mart is a pushy guy.

 

[MDS]

Sounds great but I wonder how long it will last. About a year ago Best Buy and Circuit City also pushed for lower wholesale prices with the goal of making the average CD cost $12. They had an agreement but sure enough before the lower prices ever hit the retail store the music industry reneged on the deal and nothing changed.

 

[Nomo]

Sorry, I'm having a hard time picturing Walmart as the good guy here. (And Rob I realize this was not your intention).
Walmart made the decision to underprice it's CDs to draw in other sales.
Now they expect the music industry to lower prices to accomodate them? Get real Walmart.

 

[Rock&Roll Ninja]

Hmmm..... I can get the "clean" $9.72 album or the correct $18.99 album.

I'm screwed no matter who wins!

 

[Geno]

Personally, I find Wal-Mart's business practices so distastateful and predatory that I refuse to do business with them just on principal. That leaves me with Costco and Amazon.com (and a few other online sites ) for my music and DVD purchases. Being an old guy, I still like to own the source; my downloading experiences have been very unsatisfactory.

God, I'm turning into a curmudgeon!

 

[Seth=L]

Wal-Marts tactics in business are very cut-throat. They save money everywhere they can even if it makes people angry. They know that even though most people know these things about Wal-Mart will still shop there, because they are cheaper.

 

[Rob Babcock]

Sounds great but I wonder how long it will last. About a year ago Best Buy and Circuit City also pushed for lower wholesale prices with the goal of making the average CD cost $12. They had an agreement but sure enough before the lower prices ever hit the retail store the music industry reneged on the deal and nothing changed.

Those "little guys" don't have the clout of Wal-Mart. The mere threat from them that they may stop selling music has the industry in a panic. No, Wal-Mart isn't necessarily the "good guy" here, but I think the Big Five are definately the Bad Guys. Anything that makes them squirm makes me smile.

The reality of the situation as I see it is that CD prices are too high. Given the poor sound quality of most recent releases, the relative lack of worthwhile content and the poor value-for-money vs DVD movies & videogames I'd say the prices will have to come down for Big Music will die. No amount of lawsuits can turn back the clock and put the toothpaste back in the tube.

 

[Rob Babcock]

Hmmm..... I can get the "clean" $9.72 album or the correct $18.99 album.

I'm screwed no matter who wins!

I think you're laboring under a misconception- the CD you buy there is usually the same CD you'd get at BB. The only ones that are edited for content are labelled as such, and are uncommon. So far as I know, that is.

 

[MDS]

If WalMart is sucessful at this strategy it will good for everyone but especially those like me that are a bit older (40). I like the music of the 70s, 80s and maybe a little of the 90s [personally I feel the music died in the mid 90s when the record excecs started pusing Rap and the CD loudness wars took off in full steam]. Most of those are already in the $10 category because the younger folks don't want them.

I think there are a handful of newer bands that write good music but I have no desire to pay $19 for a CD where I will probably like only one song. Of course taste changes over time and I think a band like 3 Doors Down has a chance at being a 'supergroup' like 70s/80s/90s bands like Journey, Styx, etc that have had 30+ year careers. So I am slowly warming up to some of the newer music - just not at $19 a pop.

 

[Audioholics]

Wal-Marts tactics in business are very cut-throat. They save money everywhere they can even if it makes people angry.

In my opinion (and experience) they don't make "people" angry... People love them (employees, customers, etc) They make "companies" angry because they KNOW what things cost and refuse to allow businesses to make insane profits in any one particular sector... They are very in tune with consumers and manufacturing/pricing.

The breakdowns the music industry give for the price of a CD are outrageous lies... Bottom line is they have $1 in manufacturing and $4 in production and promotion, giving them PLENTY of profits for an $8 sale to Walmart.

 

[Rock&Roll Ninja]

I think you're laboring under a misconception- the CD you buy there is usually the same CD you'd get at BB. The only ones that are edited for content are labelled as such, and are uncommon. So far as I know, that is.

Yes they are labeled as clean, but they do not also carry the unedited copies. So if I wanted something by The Velvet Revolver, I'd have to shop at FYE. And edited albums are quite common in the heavy metal genre.

As a side note, Yourmusic is still in business selling Cds at $6. So there must be profit in $10 disks.

 

[Rob Babcock]

Yes they are labeled as clean, but they do not also carry the unedited copies. So if I wanted something by The Velvet Revolver, I'd have to shop at FYE. And edited albums are quite common in the heavy metal genre.

Are you sure this is the case? I've purchased several CDs @ Wal-Mart that were a bit on the "racy" side and never come across an edited one. Maybe my tastes aren't as filthy as they were in my youth.

 

[Buckeye_Nut]

In my opinion (and experience) they don't make "people" angry... People love them (employees, customers, etc) They make "companies" angry because they KNOW what things cost and refuse to allow businesses to make insane profits in any one particular sector... They are very in tune with consumers and manufacturing/pricing.

The breakdowns the music industry give for the price of a CD are outrageous lies... Bottom line is they have $1 in manufacturing and $4 in production and promotion, giving them PLENTY of profits for an $8 sale to Walmart.

Very well said!! Based on some of the catty responses, it sounds like a bunch of liberalspeak to me.

 

[10010011]

Are you sure this is the case? I've purchased several CDs @ Wal-Mart that were a bit on the "racy" side and never come across an edited one. Maybe my tastes aren't as filthy as they were in my youth.

I bought a CD a Wal-Mart once, and it was NOT labled as being edited for content, but it was indeed edited.

I do remeber thinking that it was intresting that it was not labled "Contains Explict Lyrics".

Apperently the lack of an explict lable counts as an edited for content label.

But either way, they can stop selling CD's for all I care. I don't shop there anymore anyway. Too many times we were over charged for items then had to stand in a long customer service line to get our money back. That is part of their scam, so check your receipts closely.

 

[Rock&Roll Ninja]

Bottom line is they have $1 in manufacturing and $4 in production and promotion, .....

I find it hard to believe that a major label spent an entire $4 on the production of this.

 

[majorloser]

I find it hard to believe that a major label spent an entire $4 on the production of this.

Nah, half of the money came out of her personal checking account

 

[Biscokid]

In my opinion (and experience) they don't make "people" angry... People love them (employees, customers, etc) They make "companies" angry because they KNOW what things cost and refuse to allow businesses to make insane profits in any one particular sector... They are very in tune with consumers and manufacturing/pricing.

Yes they know how much stuff costs to produce in China. Also the editors of this site talk a lot about the "dumbing down" of recordings etc. Do you think with less money coming in they will produce a higher or lower quality product? I firmly believe in a global market and I care for people in China just as much as my nieghbor(more then some) but the quality is just not there. That Walmart movie was intersting also, did any of you see it? There have been some good american compaies put out of bussiness by this company. Did walmart deem these companies profits too high?

 

[Nick250]

My personal subjective non scientific view is that CD sound quality has always has been a hit or miss proposition since CD's started coming out back in the dark ages. I would guess one good one for every ten bad ones that I have bought. It does not seem to be price related, though if I see a CD I want, I don't look at the price so maybe I am off on that.

Nick

 

[STRONGBADF1]

Go Team Go

Go Capitalism!!!

What's wrong with Walmart putting pressure on a supplier for better pricing? The record companies don't have to give it to them. Either there is enough profit there or there's not and if there is not let Walmart walk if they can afford to let there profit drop 2% and spend the capital it will take to find something more profitable and revamp their stores to sell it.

People are always crying about wanting or deserving more. Me, You, Walmart, the record companies... The market will find it self and we will all make our choises based on our own value system. (moral and economical)

Again... Go Capitalism!!!

SBF1

p.s. What's wrong with recordings has more to do with the musicians low standards and greed than anything else.