The Wal-Mart Effect: Can They Change CD Pricing?

from the changing-world... dept

Love 'em or hate 'em, Wal-Mart may be the next biggest force in changing how the recording industry works. We've already talked about how music retailers may be the real bottleneck to changing how the recording industry views its business model. However, Wal-Mart isn't like any other music retailer. To them, selling music is a loss-leader to help them sell consumer electronics. However, Wal-Mart also has such a dominant spot in the market that they can force companies to make massive changes (see what they did with barcodes, and what they're doing with RFID). So, now, they're actively trying to force the price down on CDs, saying they want to be able to sell most CDs for less than $10. They're already taking a loss on CD sales, but want that loss to be much smaller -- and if they don't get it, they're threatening to give up more shelf space to DVDs and video games (the real threats to CD sales). This is interesting for a variety of reasons. First, Universal tried to drop prices last year, but many retailers rebelled, and none of the other major labels followed. What may also be interesting is how this impacts the idea of "the long tail". As Chris Anderson has shown, there's plenty of money to be made in selling less popular things, and here's Wal-Mart suggesting they may shrink inventory even more. Already, they only offer less than 10% the inventory of a Tower Records, and they're threatening to cut that even further. All that really means is it will open up more opportunities for those focusing on selling within the long tail, rather than worrying about how Wal-Mart competes with them.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team


Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    Brice Tebbs, 13 Oct 2004 @ 5:40pm

    Hardware Vs Software

    My local walmart sells portable cd players for under 10$. Makes sense to me that CDs would be the same.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Oct 2004 @ 8:32am

      Re: Hardware Vs Software


      Who the hell goes to Walmart for music ?

      Limited choices,
      further limited by Walmart's censorship.

      You get what you pay for.

      link to this | view in chronology ]

      • identicon
        Greeter, 14 Oct 2004 @ 8:54am

        No Subject Given

        Walmart does it for the kids.

        The thousands of underage immigrant ones they employ.

        link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Feb 2013 @ 9:52am

    Gay

    link to this | view in chronology ]


Follow Techdirt
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Discord

The latest chatter on the Techdirt Insider Discord channel...

Loading...
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.