Wal-Mart Battling for $10 CDs

[Audioholics]

<P><FONT face="Arial, Helvetica, sans-serif" size=2>An article in Rolling Stone yesterday outlined how Wal-Mart wants every CD they sell to their customers to cost $10 or less - something that would be industry-changing and would be sure to inject some serious life into record sales. According to the article, in the past decade, Wal-Mart has quietly emerged as the nation's biggest record store. Wal-Mart now sells an estimated one out of every five major-label albums. It has so much power, industry insiders say, that what it chooses to stock can basically determine what becomes a hit. "If you don't have a Wal-Mart account, you probably won't have a major pop artist," says one label executive.</FONT></P>
<P><FONT face="Arial, Helvetica, sans-serif" size=2>The cool thing is that Wal-Mart is playing hardball on this. They want the record companies to lower their price for CD titles - and they are preapred to fill the gap with video game and DVDs if they don't comply. The great thing is that Wal-Mart is saying what we all have for years: It's CHEAP to make and distribute CDs, even taking into account recording, royalty&nbsp;and production costs. Could this be the start of a beautiful move against the RIAA to reduce pricing/profits/overhead? Let's hope so. Let's also hope that if the RIAA tries to squeeze the artisits to make up the difference that they will jump to independent labels in droves and send the industry reeling into free market economics. <FONT color=#ff0000 size=1>Thanks to WmAx for the article tip!</FONT></FONT></P>
<P><FONT face="Arial, Helvetica, sans-serif" size=2>[Read the Article]</FONT></P>

 

[outsider]

too bad it's Walmart.
does this mean more censored/edited albums?

 

[Az B]

too bad it's Walmart.
does this mean more censored/edited albums?

Yeah, there's good and bad in this. I like the way they're forcing major labels to lower prices, but at the expense of variety and freedom. As one who enjoys an eclectic music collection, I am concerned that this will reduce the overall quality of music that's available to the public.

It ain't all Snoop Dogg and Brittany Spears.

 

[goodman]

Woe to us if we have to look upon Walmart as a savior and paragon of virtue. Walmart censors what it stocks and is sneaky about it. If you look in the rap section at some record stores, you will find unexpurgated and censored versions of the same title clearly labeled as such. However, at Walmart, you will find only the censored version, but it is not labeled "censored", so you won't know you have the censored version until you bring it home and play it. It's awful, because there are just pauses where the deleted words were. Walmart has also been unethical in the way it responds to lawsuits of injured customers across the country. Judges usually restrain their negative comments about a litigant to the confines of the courtroom, but a judge went on national television to report Walmart's unethical behavior in a number of court cases. And Walmart has been discriminatory in the promotion of women to management positions and now faces a class action by hundreds of their present and former female employees. I'd rather spend my money elsewhere and probably get just as good a deal.

 

[outsider]

I will always shop elsewhere, even if I have to pay twice the price. I like service. I like when my questions are answered. Walmart has never been able to provide that sort of service. Some might say it's because the employees are dumb, but they can only be as dumb as the people who train them to do their job.

 

[Rob Babcock]

What's the solution to that problem? The kids that work at all the local record stores here are just as dense. You're probably better off just buying online.

I realize Wally World is the "great white whale" for many people, and upon its back they heap the sins of the corporate world, but they're no worse than any other company. I pretty much never buy anywhere else without checking their price first, since they're virtually always the lowest (with the exception of the bait & switch tactics and loss leaders a couple local grocery stores have).

When it comes to music, I rarely buy anything there mostly due to the fact that they rarely have anything I want (no DVD-A or SACDs, and I don't really buy pop music very often).

 

[Unregistered]

Many big chain stores such as Best Buy and Circuit City routinely sell CDs for around $10. Of course they are often limited to 'good' music from prior to the rap/hip-hop crap, which suits me just fine.

I wouldn't buy a cd of any of the current illiterate rap artists, clean or not, even if wal-mart offered them for $1.

 

[slmcdonald7]

I realize Wally World is the "great white whale" for many people, and upon its back they heap the sins of the corporate world, but they're no worse than any other company.

Rob, I have to disagree with you. Wal Mart is by far the largest retail chain in the US (World?), and they use this power to muscle their way to the lowest prices possible, with little to no regard to what the market really demands. Selling products for less than they are worth is good for Wal Mart as it allows them to maintain their position as the 'top banana' of retailers, but it is bad for the overall health of the economy.

Check out this article by Fast Company , it illustrates this nicely. It's an interesting read.

Personally, I shop at Wal Mart only for basic necessities and only because I'm operating on a student's budget. As soon as I start making any kind of money, it's adios Wally World for me.

 

[WmAx]

Very interesting article. Thanks!

As for the *worth* of an item, that is an all too complicated subject for me to attempt an objective analysis upon. But speaking personally/subjectively and to the topic of this thread, I find that CDs are vastly overpriced even though I love music more then most things. I feel that $10 is still too expensive, too be honest. $8 would be a good target IMO. But I'm heavily biased -- I would love to see the 5 majors go bankrupt; *independants starting to supply the majority of products.... The majors aren't good for anyone -- not the artists nor the consumers. They do their best to stab both in the backs.

-Chris

*I realize that as with any company or group of companies, the independants would eventually consolidate and become the new *majors*. However, I believe that in the time it would take for this to occur, music distribution models would be radically changed since the old model(s) proved to inadequate. This would include online distribution methods--that at current are IMO a bad value(Itunes, etc.) and provide a poor product(DRM).

Rob, I have to disagree with you. Wal Mart is by far the largest retail chain in the US (World?), and they use this power to muscle their way to the lowest prices possible, with little to no regard to what the market really demands. Selling products for less than they are worth is good for Wal Mart as it allows them to maintain their position as the 'top banana' of retailers, but it is bad for the overall health of the economy.

Check out this article by Fast Company , it illustrates this nicely. It's an interesting read.

Personally, I shop at Wal Mart only for basic necessities and only because I'm operating on a student's budget. As soon as I start making any kind of money, it's adios Wally World for me.

 

[Francious70]

I don't see why some of you guy are bashing Wal-Mart, it's a great place.

• Open 24 hours
• Low Prices
• They have virturally everything you could want
• Usually have quality stuff

Now I will agree that I don't buy music there as often as I go to a dedicated music story, but that's only because of more selection. I don't really have a problem with the editing of their CD's as I usually buy Country, Christian, and non-parental advisory Rock.

Other than that, Wal-Mart is a great store.

Paul

 

[slmcdonald7]

I don't see why some of you guy are bashing Wal-Mart, it's a great place.

• Open 24 hours
• Low Prices
• They have virturally everything you could want
• Usually have quality stuff

Now I will agree that I don't buy music there as often as I go to a dedicated music story, but that's only because of more selection. I don't really have a problem with the editing of their CD's as I usually buy Country, Christian, and non-parental advisory Rock.

Other than that, Wal-Mart is a great store.

Paul

Too funny. I'm laughing too hard to write a coherent response. You win.

Judging from your post, I think that we're too far apart ideologically to come together on an issue such as this, so I won't try to change your mind. All I ask is that you keep posting gems like that one. It made my day

 

[Audioholics]

We do all of our grocery shopping at Walmart. All of the other stores cost way more and force you to use "discount" cards to make you feel like you're getting a sale. Most of the time, the cards only get some of the items back down to where they should be normally (meanwhile you get ripped off for everything else you buy.)

I see no inherent evil in this. Capitalism, like everythign else in the world has its limits. the downside is that supply and demand will always produce companies like Walmart who "win the game" so to speak and negate smaller comapnies from being able to compete (by way of volume purchasing.)

Its a complex game, but everyone knows the rules so its at least fair.

 

[farscaper]

Hey, let Walmart and the RIAA fight it out.
I can see the consumer benefiting from this. Standard audio CDs have always been over-priced (my opinion). Selling CDs at the same price as they did in 1990s, come on now!
There will be short term problems that will hurt new and lesser known artists but there will be a light in the tunnel. A new technology and new market system for music is needed. But no new system will come if there is no allowance to storm. The RIAA & Walmart have pushed around suppliers and artists alike.
Like most businesses, it should fix itself in the wash, if played fairly. Its good to see them pick on someone their own size.
Let it be a good and aggresive fight.

 

[cbraver]

Most of my CDs I buy are between $10-14 at Best Buy. The newer country I buy tends to be in the $14 range, sometimes more if it's a popular country artist. But, for the most part, it seems to average around $12-13 bucks a CD. I can live with that.

That jive music they call rap is always the most expensive. Kind of funny. Although I did see Eminem's new video and found it halarious... I'd never buy his CD. Gotta laugh when he dresses up as Micheal Jackson, sits on a bed and has a bunch of little boys jumping up and down on the bed behind him while he does his tune.

-Chad

 

[toquemon]

Here in Mexico, WallMart is the leader too, by far. The problem i see is, like someone has posted before, the've became the first censoring entity in my country. Not even the government.
The records you can find here in WallMart are "politically correct", that's the problem.
The positive thing i can see in this situation is that other distributors will be forced to low they prices and ,because of the fact of lowering the prices, it will generate an unbalance in the market and maybe, just a tought, the music that i really like will low it's price too.

I don't know if i said it well in English, soory if i did it wrong.

 

[Westrock2000]

As for me I love Wal-Mart...I hated it when I was younger and had liquid cash and listened to what others said, but now that I'm an adult and have budgets I'm there all the time. Plus my mother and uncle in law both work for Wal-Mart and they like it there, its not the best job sure....but its nothing like what protesters and Unions make it out to be, and I'll believe someone who works there first.

As far as censoring the music...well I can see how this can go either way. Ya its an art, but it allows them to sell CD's to minors without having to worry about some special interest group sueing them, even though I've seen kids buy stuff at Best-Buy, Music Wherehouse, etc that were under age. Wal-Mart is like McDonalds, they don't have the luxory up being able to bend the rules like everyone else.

I wouldn't buy a cd of any of the current illiterate rap artists, clean or not, even if wal-mart offered them for $1.

As far as this is concerned...I have started buying music from Allofmp3. Although I would never pay $0.99 for some data, they only charge $0.01 per megabyte. You get to choose the type of file. I do 320kbps LAME MP3, and an entire album usually runs around a $1.00-$1.75. Now it may not be acceptable quality by some, but its damn close...and you try finding a Breathe or Cutting Crew album for anywhere near that price! It gives me a chance to build a healthy music collection legally from stuff that is generally hard to find....which really is the goal I think. They also have lossless compression (like FLAC) and many can even be downloaded in WAV format, but then your looking at longer downloads, and more about $6-$7 an album, still not bad though. Especially if its a reference album, like maybe some Vangelis or Classical or something. But like recently I downloaded Temple Of The Dog and Soundgarden....which 320kbps is plenty good for that type of music.

BTW, Allofmp3 is a Russian website, so if you go there and its all Russian look in the top left corner for the English button....great site though



BTW2: I think Wal-Mart sells music online ala iTunes/Napster style, and the songs are only $0.88 each....Wal-Mart will undercut anyone

 

[Rob Babcock]

I think the market will almost infallibly set the correct price. To me, the idea that Wally World's prices are "too low" is absurd. If they make a profit, then their price is just right. If no one else can compete, then they have to learn to or die. That's just the way the world works.

Some of their alleged "systematic discrimination" is probably due to the fact they are so big and have so many stores in parts of the country that are more racist & sexist. I do know people who work there and at Sam's Club, and I was surprised that they pay workers more than I figured they do. And at least in the case of Sam's, they have pretty good benefits compared to other entry level jobs. Many of the mom & pop type stores that WM has crushed generated very few jobs at minimum wage, and offer no benefits whatsoever nor any job security.

Any time a company is successful, people come out of the woodwork to bash them. Microsoft is a good example- they may have been guilty of some anticompetitive behavior, but mostly it's just sour grapes from their competitors. I don't much care for some of their practices, but most of them are perfectly legal.

Mostly I think change just scares people. Some feel it would be nice to live in a Norman Rockwell painting for the rest of their lives, but times change. The trend does seem to be towards low costs & high volumes, along with more efficient production and distribution. Eventually someone will probably come along and beat Wal-Mart at their own game. For my part I'll always buy things where I can get the best price (providing the service level is the same). Certainly in my area, the service and speed of checkout at Wal-Mart blows away any of the grocery stores.

 

[jeffwxman]

Hi I'm new to this forum but I do shop a lot at Walmart.I like their prices.I buy most of my Dvd's and Video Games from them.I don't however buy my music from them except rarely as I listen to beautiful music also called easy listening and Walmart doesn't sell that type,I have to get it at amazon.com,Yesteryearmusic,cduniverse and other places online.If I do buy music at Walmart it is usually Christmas or Christian format.I don't have a problem with them editing their music cd's but they don't edit the movies they sale on dvd.I've bought PG 13 movies and had to mute it when it gets to the fowl language.Also regarding the price I would gladley welcome cd prices coming down to less than $10 even thou I buy most of mine online I expect if Walmart is able to do this other competitors,Target,Kmart and online retailers will follow suit.

 

[Az B]

fowl language

I thought Chicken Run was a great movie!

 

[slmcdonald7]

Please don't disqualify me from the drawing for the amp...

I think the market will almost infallibly set the correct price. To me, the idea that Wally World's prices are "too low" is absurd. If they make a profit, then their price is just right. If no one else can compete, then they have to learn to or die. That's just the way the world works.

Rob, we're talking about the market, not the Catholic Church, so perhaps your faith in its infallibility is a little misplaced. The market is capable of being thrown off track by the actions of large corporations. If you doubt me, just browse some basic antitrust law. I agree that the market should theoretically set the correct price, but in light of 'the way the world works,' it would be wrong to assume that the market operates in a vacuum. To evidence this, I refer you to the article I previously posted.
If you think that the proposition that Wal Mart can set their prices 'too low', is absurd, perhaps you should check out some basic economics. There is a proper balance between supply and demand that dictates price in economics (maybe we're talking Rob-o-nomics? )
"If they make a profit, then their price is just right". Rob, it seems that you're ignoring ethical standards of corporate conduct in favor of a Goldilocks and the Three Bears view of the economy. Interesting, but perhaps it should best be filed under the "Rob-o-nomics" category.
If my responses seem a little pedantic, forgive me, I'm just trying to be thorough.

Some of their alleged "systematic discrimination" is probably due to the fact they are so big and have so many stores in parts of the country that are more racist & sexist. I do know people who work there and at Sam's Club, and I was surprised that they pay workers more than I figured they do. And at least in the case of Sam's, they have pretty good benefits compared to other entry level jobs. Many of the mom & pop type stores that WM has crushed generated very few jobs at minimum wage, and offer no benefits whatsoever nor any job security.

Rob, you’re killing me. I frequent this forum for its wonderful discussions about all things technical and audio, not for its enlightened social commentary, but come on...
“Many of the mom & pop type stores that WM has crushed generated very few jobs at minimum wage, and offer no benefits whatsoever nor any job security”
I would absolutely love to see your evidence for this claim. It’s not like Wal Mart invented benefits packages for employees. Small businesses employ over half of the private sector workforce (http://stats.bls.gov/opub/mlr/2000/04/art3full.pdf) , and I doubt that most of these jobs are devoid of all benefits and only pay minimum wage.
I will agree that Wal Mart and Sam’s Club pay reasonably and have decent benefits packages, I also know several people who have been able to support themselves at a reasonably comfortable level on the wages and benefits that these corporations offer to their employees.
As for your explanation about the ‘systematic discrimination’ charges levied against Wal Mart, perhaps all fact finding should be left to the appropriate authorities. A quick perusal of the several recent discrimination cases brought against Wal Mart reveals plaintiffs coming from all areas of the U.S. (Pennsylvania, Connecticut, North Carolina, Texas, just to name a few...), not just parts of the “country that are more racist & sexist” (not that I have any idea where these areas would be, and surely you’re not condoning such actions just based upon where they happened?!?!). Rob’s free lesson in corporate law: if a Wal Mart in one of these mysterious back-country areas engages in sexist and racist practices, Wal Mart Corp. is responsible, end of story.

Any time a company is successful, people come out of the woodwork to bash them. Microsoft is a good example- they may have been guilty of some anticompetitive behavior, but mostly it's just sour grapes from their competitors. I don't much care for some of their practices, but most of them are perfectly legal.

Rob, how can you argue that those who have a problem with Wal Mart are just coming out of the ‘woodwork to bash them’ when you admit in your next sentence that they ‘may have been guilty of some anti-competitive behavior? Isn’t it possible that these people have a legitimate problem with the business practices of these large corporations?
You argue that ‘most’ of the actions of these corporations are perfectly legal... but ‘most’ of any criminal’s actions are perfectly legal. It’s the illegal actions that the ‘woodwork’ people are concerned about, actions that you admit sometimes happen. Perhaps labeling a principled argument against Wal Mart as bash-ings from ‘woodwork people’ isn’t your best approach to this debate. The problem that people have with Wal Mart is not their level of success, it is how they wield the power that comes from that success. With greater power comes heightened responsibility, so perhaps people trying to hold them to the utmost standard of conduct is a good thing. Just a thought.

Mostly I think change just scares people. Some feel it would be nice to live in a Norman Rockwell painting for the rest of their lives, but times change. The trend does seem to be towards low costs & high volumes, along with more efficient production and distribution. Eventually someone will probably come along and beat Wal-Mart at their own game. For my part I'll always buy things where I can get the best price (providing the service level is the same). Certainly in my area, the service and speed of checkout at Wal-Mart blows away any of the grocery stores.

Yes, I agree that change scares some people, but this better explains those who were opposed to the liberation of slaves and gay marriage rather than those who frown upon corporate avarice.
The trend towards low costs & high volumes and more efficient production and distribution is a good thing, so long as it does not lead to a ‘race to the bottom’.
People will always buy things where they can get the best price, and this is often a good thing, just be open to the notion that there are instances in which the lowest price often comes with a higher, hidden cost.

- Stephen