EMI Stops Selling CDs To Indie Record Stores
from the you're-on-your-own dept
Apparently, EMI has had enough of independent record stores. Via Digg come reports that EMI has been calling various smaller independent record stores and telling them that it won't sell them product directly any more. Instead, they'll have to source it from third parties -- meaning that it will be more expensive. Basically, this means most of those stores will carry fewer EMI CDs. Of course, some might argue that this won't really mean much, since independent record stores are smaller (and don't always sell as much major label product), but it still seems like an odd choice by EMI. You would think the company would be working overtime to keep the few retail channels pushing its product happy.
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Filed Under: cds, indie record stores
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in most retailers, vendors pay the retailer to get premium space -- that means end-caps, high-traffic areas, near other high-traffic items, etc., and they pay a lot. ever notice why coke and pepsi products dominate almost a whole aisle in every grocery store? that's because they pay a lot to keep it that way.
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The death throws begin?
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Re: The death throws begin?
if you go by the "too big to fail" approach, the american auto industry went bad in the 70's and it took 30+ years for the corpse to stop kicking.
media companies went bad in the late 90's, so it could still be a few years before they finally bleed out.
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Re: The death throws begin?
B. This is hardly the beginning of the end. When one of the major labels goes into bankruptcy/bailout/"we're too big to fail!" mode, THEN you can say that.
The major labels will look up and shout "we're too big to fail!", and the world will whisper back, "the hell you are".
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Does this mean
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That makes sense
I thought EMI was going to do things differently?
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Re: That makes sense
The Spinal Tap school of marketing!
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Re: Re: That makes sense
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At that point we knew we were dead, which is ironic as none of us could have known about Napster coming about several years later. For those readers with brains who figured this out, yes.
The internet did not kill off the music store. The labels did.
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Who buys CDs
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So I will only download high quality mp3's (192 & above) for now on & I will not support anymore labels but I do support the artists by going to the concerts & maybe buying a shirt or something. Screw the major labels they are killing themselves & a lot quicker than I originally thought.
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Sale or Return
EMI don't want the cost of having to keep track of small volumes of discs across large number of shops. They want to count these as a sale.
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You're forgetting the distributors
Since this was the major source of revenue for record labels in the past, they monopolized it internally. Since the majority of their money came from this they began to believe (or at least act like they believe) that they were in the music distribution business. While this is a revenue generator it requires large companies, in this case EMI, to be concerned with small ones, here the independent record stores. It requires building and maintaining good relationships with the customers, and when they serviced the entire retail music business, they had a lot of independent music stores to relate to. That gets time consuming and expensive so they sought ways to stop doing it. As Ima Fish said, they killed the independent record store to cut down on their customers and thus their cost.
However, outsourcing gained popularity and distribution companies came into the picture. The labels could then sell all their product to a very limited number of customers. The money saved by not having to invest as much time in smaller companies and not having the same staff costs became more attractive than the money made by doing it all themselves. Since there was a smaller piece of the price to take, these distribution companies put less effort into marketing to small businesses, gave less incentives to small business, and pretty much let small businesses languish in favor of larger, higher volume customers.
One of the side effects of the labels removing themselves from contact with the independent store is that they lost contact with the independents stores' customers. These are the customers who drive the new music development (once someone is big enough to get into a big box store like Best Buy they are already in heavy radio rotation). If you wanted to see where music was headed up through the 90's, you went to an independent store. If you wanted to find the next big thing you went to an independent store. If you wanted to find a band before they sold out, you pretty much had to go to an independent music store.
EMI, by cutting themselves off from indies completely, is truly signing its own death warrant. Given how long the labels have tried to kill the independents (after all, most independents never really pushed the cash-cow-of-the-month-pop-idol) is it really any wonder they would be so far removed from the will of their ultimate clientele? They believe their customer is either the big box store of the the distributor rather than the end consumer. Everything they are doing makes total sense as trying to protect their perceived customer base from threats to their perceived customer base.
I know this is a very simplified and macro view of the situation. There are many other bits and pieces that fit in and play a role, but the all the major labels have lost sight of who their true customer is and what business they are actually in. Unless and until they realize where they need to focus to make money now, they are doomed and this boneheaded moves proves it.
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Who Buys CDs
As far as CDs go... for people who actually do support - artists buying CDs or vinyl is the way to go. You get the artist's true vision of the art form they have created and after you pay for it is yours to keep. Downloads are for chumps.
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The average group will make about $1/album sale. Yes they make $1 for a $12-$16 CD. Then they divide that $1 between the other members of the band. All the CD/recorded music is now is an advertisement tool!! Don't get me wrong I will buy the physical CD (if its good) but I will not buy it new I will always buy used.
Yes, they make most of their money from touring & merchandise. Why do you think the band tours a lot longer than they used to & produce less new music then they used to. Music bands used to produce an album a year sometimes even two. I know they don't care about a shirt but they do get a bigger percentage from the shirt/merchandise sale then they do from each CD sold. That is the only reason I will spend $20-$25 for a stupid t-shirt.
Another thing if you go straight to the venue you avoid paying Ticketmaster fees so no I don't support Ticketmaster either but that's even hard to because they pretty much own most of the venues in my area now.
If buying the CD makes you feel better than buy it but it is the labels that are killing themselves. That is the only person making money off of the CD sales.
Music will always be here it's the old fashioned labels that will be gone.
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Shouting in the Wilderness
If new CDs cost $3.99-5.99, I would buy a dozen every month
The problems with the recording industry is a testament to how delusional people can become once they've enjoyed monopoly power - they seemingly cannot come to grips with market fundamentals after that.
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Wayne Rosso's story is NOT accurate see link
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EMI works with lots of independent retailers.
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Last Shop Standing exposes even worse...
They would prefer to ship to fewer accounts on a misguided money saving exercise. They seem to forget that it is independent record shops that champion new bands and local artists. Who is going to do this in the future? Anybody interested in this subject should check out the book Last Shop Standing which gives a real insight into how all the record companies have let down record shops and contributed to thousands closing. I read it last week and have since been in shock at the horrific corruption of the music industry.
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