Best Buy to Indies: Drop Dead
 

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from pitchforkmedia:

Best Buy to Indies: Drop Dead

Mairead Case reports:
On January 24, Best Buy announced its latest promotion: a sale on a handful of albums from "left of the dial indie heroes," such as the Arcade Fire, Cat Power, Danger Doom, Antony & the Johnsons, Atmosphere, New Pornographers, and Broken Social Scene-- all listed at the obscenely low price of $7.99. Yes, that's cheaper than every other store on the planet, including iTunes. In fact, it's cheaper than distribution wholesale.

How can Best Buy get away with that? Isn't that illegal or something? Well, no. Welcome to the wonderful world of co-ops. Co-op campaigns are deals in which labels exchange money or extra CDs ("cleans") for prominent placement in stores, bulk initial orders, sale pricing, and advertising presence. Co-ops exist everywhere, from megastores to Mom and Pops alike. In other words, whenever you see some Next Big Thing featured at the end of an aisle, nine times out of ten, the label paid for that artist to be there.

This isn't intrinsically a bad thing. However, when co-op money is used to lower prices as substantially as Best Buy has, it's independent record shops that suffer the blow: Given the recent plunge in album sales over the past five years, these stores are already struggling. And while it may seem dramatic to say that something like this could make these kinds of stores extinct, the danger is very real. For many, it will be the final straw that puts them out of business.

It's no surprise, then, that Best Buy's "Artists Outside the Mainstream" program has inspired a lightning-quick backlash from small stores and non-participating labels. Tongues are lashing at Saki Store, the blog home of indie distro Carrot Top Distribution and Carrot Top Records (Handsome Family, Antietem, the Coctails, Archer Prewitt). On January 24, CTD, Ltd. President Patrick Monaghan posted a screed lambasting Best Buy and the labels involved in the program. His post inspired a heated discussion that spread across the web, with label executives and store owners joining the fray.

"I don't really see any way you can blame the customer," Monaghan told Pitchfork. "Hell, what decision is a consumer supposed to make, assuming they actually want to pay for their music, when faced with a $7.99 vs. $13.99 CD? I also don't think you can blame Best Buy. You can't shame the sociopath, so what good does it do to try? In my humble opinion, the blame falls on the labels and bands who are participating in this co-op advertisement deal."

Monaghan continued, "It's a question of extreme pricing and sale. If there is no indie retail to help build new bands, we are left with MySpace, the unfiltered Internet, and ad/TV/movie placement to introduce people to new bands. Retail would be left to the Best Buy/Starbucks axis. That's not too appealing of a scenario to me."

Mac McCaughan, Superchunk/Portastatic frontman and co-owner of Merge Records, responded point-blank: "Obviously, Merge's job is to get our artists' records in as many stores as possible, and make them available to as many people as possible who want to buy them," he commented on Saki Store. "Someone who discovers an artist because the 'popular' record is on sale at Best Buy will then hopefully be driven to find out more about the band. [Then,] they'll have to get the back catalogue at a store that sells mostly music."

According to the labels involved in "Artists Outside the Mainstream", Best Buy never mentioned the $7.99 price plan when discussing the program. The promotional paperwork specified only print circular placement, special positioning, and sale pricing, but no disclosure of how low that sale pricing might be.

In this sense, the labels, prevented from price-point negotiations under 2002 price fixing legislations, were truly blindsided. As Secretly Canadian's Nick Blandford wrote to the label's retailers and distros, "To say that [the price] was a shock to us is an understatement. Before approving the program, we specifically confirmed with ADA, Secretly Canadian's exclusive distributor, that Best Buy would not receive any sort of discount."

Matador president Gerard Cosloy told Pitchfork, "I don't deny for a second that using hot indie titles as a loss leader is a total sucker punch to mom and pop record stores. But without diminishing the significance of such an event, cool record stores should have something else up their sleeves besides using Best Buy as the bogeyman. We've used Best Buy for years, but the vast majority of our time and energy has been devoted to selling records through independent retailers. To date, we've yet to do any instores with Best Buy or any exclusive titles with a chain store or non-music retailer, and we continue to come up with specific releases [like the 99¢ Cat Power seven-inch and Interpol remixes] that you can't purchase anywhere other than indie retail."

So how do artists feel about the situation? "Artists have never complained to us that their record was in a chain store or on sale at a chain store," McCaughan told Pitchfork. "However, artists have often complained if they couldn't find their records in a chain store."

McCaughan was blunter on the Saki Store blog, arguing that "if [Merge] announced to our bands, especially bands that sell a lot of records, that their CDs would only be available at the cool stores and no longer at any chains, the roster of artists that Merge fans love would evaporate. If you don't think that's true, then you're living on a different planet."

"In any event," Cosloy told Pitchfork, "it should be stressed that [Matador] is pretty circumspect about which titles we choose to put into a co-op program at the chain level. Unless an artist's sales history, touring, press or airplay justifies such a thing, you won't see us trying to place 30,000 CDs on the shelves of your favorite appliance retailer."

Although the $7.99 promotion has ended, and most of the "Artists Outside the Mainstream" titles are now selling for a sensible $12.99, the principle remains: Don't take your local independent record stores for granted.

* Saki Store Blog: http://sakistore.blogspot.com/

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Interesting read. What do you all think?

I have to admit I bought that Antony & the Johnsons CD for $7.99 at Best Buy. Would I have spent $10/$12/$14 on the album? Nope.

Discuss.

As much as I love the feeling of walking into an indie store, I would have to side with Mr. Merge and Mr. Matador. I buy most of my stuff online now and don't really care about Best Buy whipping up on other stores who can't sell for less. I doubt I've bought a CD at my favorite record store in more than five years because of online purchasing. And if I was an owner of a label I'd do just as these guys are doing. Paying a dollar more at the indie store for support? Sure. Five dollars? No way.

Think I'll wear my Superchunk shirt after work.

I'm really conflicted about this. On the one hand, I detest "chain" stores. On the other, I detest paying ridiculous prices for CDs.

So, I don't know...

Oh, and perhaps they should've called it "Best Buy to Mom 'n Pop Stores: Drop Dead"

Given a choice of paying $7.99 for a cd as opposed to $12.99, 100% of the time I'm going to choose the $7.99 price.

Plus, I get reward zone points. ;)

This will further wipe out bad small stores, yes. But Best Buy can't ever carry everything. For example, how much of Pitchfork's Best New Music is available at Best Buy? I'm willing to bet half, at most. And Best Buy won't carry local bands, or LPs, or guitars, etc. For mom-n-pop shops who want to compete by offering the latest Dem Franchise Boyz CD, you've got a new thing coming. But I don't see Best Buy sinking Amoeba Records anytime soon.

How about the REAL Headline


BEST BUY TO INDIE MUSIC - Welcome!

What a retarted headline

The thread title should be: record companies to indies: drop dead

I can't see how the artist could hate this. The cheap price gets their album into more peoples hands. Best Buy is one of the largest retailers and promoting their work, which in turn generates more sales.

As for Mom & Pop. Goodbye. I'm surprised you have been around as long as you have.

"If there is no indie retail to help build new bands, we are left with MySpace, the unfiltered Internet, and ad/TV/movie placement to introduce people to new bands."

Yeah, cause there's no way anyone could find any information about a new band or album with only those three sources.

Basically this guy is saying "The indie labels are giving some freebies so they get preferred placement, and BB is selling them for cheap"? Waah. Sorry people like paying 8 bucks instead of 13.

The mom and pops can't beat BB on price, that's pretty much a given. They need to compete with something else; information, knowledge, selection, service, etc. Personally, as long as I can find someone to sell me something, service is not a big deal to me when buying something like this. Info/knowledge, well, that's what the internet is for. It comes down to selection. If the mom and pop stores are the only place to buy the indie things, then they'll stay in business [of course, then it's something similar to a monopoly, and they can charge whatever they want]. But if a chain store is going to sell the same thing, cheaper, well, that's the marketplace. Harsh but true. They can survive by selling LPs, paraphernalia, or stuff that no other retailer will, but then they'd be competing with the net as well.

I personally don't recall buying a CD in any B&M since three Christmases ago, and that was only because I waited too long to order online. Since then, my few and far between CD purchases have been either Yourmusic.com or Half.com

Other record stores sell CDs for too much because the record companies set the prices too high. There's no reason they can't drop the retail prices and let them sell for $7.99 everywhere.

Another biased PF article.

or retarded even.


related:

i actually don't have a problem paying a little bit more for my indie or hard-to-find titles at a local/indie store. that is, if they're offering something to make it worth my while to go there rather than just cool points.

the local Easy Street Records in Seattle does just that. besides having a great huge used and new selection, they have stamp cards. a full card will get you a free new cd, up to 18.00. comes in handy when you need that import-only release or whatnot.

that's a store that probably gets more business than the tower down the road, by virtue of having frequent indie band in-stores, a nonstop flow of used vinyl/dvds/cds, and a big big selection of all types of music.

that being said, i still go to best buy if there's a new release being offered at one of those 7.99 prices. how can i resist that?

Yeah, this is the quote that really stood out to me too. Sounds kinda clueless.

And of course it doesn't occur to them to lower the prices across the board to help boost sales :rolleyes:

blah blah capitalism is evil


This is the disturbing part of the article
http://mighty.typepad.com/mighty/ima...rrot_gross.jpg

If MSRP is 7.99, then Best Buy's bulk buying power will allow them to sell for 5.99

They'll still be cheaper than mom & pop no matter what

Of course, this whole concept is ironic if not paradoxical:
'Best Buy's "Artists Outside the Mainstream"

and yes, to this point I had made it through this thread without seeing Carrot Top.

When I read this thread's title, I thought "that's funny, considering BB is partnering with CD Baby."

Don't these count as loss-leaders for best buy?
Lower priced items meant to get customers in the store, and while there, sucker them into making additional purchases?

I, for one, love listening to my $7.99 copy of The Arcade Fire

This just doesn't make any sense to me, but maybe it's due to my limited knowledge. From my (ADMITTEDLY, VERY BASIC) knowledge of how performers earn money, bands make basically nothing, or very little, off of CD sales. The CDs are used to get their names out and the labels reap most of the cash and profits. The bands make their dough on their concerts and tours through ticket sales and merchandise. So wouldn't the bands be f'n thrilled to sell their CDs cheap? Especially if they're actually good and inspire people to look into their older CDs?

And I'm not talking about those idiotic bands that don't want to be part of "corporate America" and don't want their names associated with somewhere like Best Buy. Let them take that up with the labels that they signed on with. It seems to me that the labels, the bands, Best Buy, and the consumers all profit from this deal. So they're actually complaining that they've come up with a system that is TOO beneficial? The fact that smaller stores can't compete is part of the risk of going into a business where you compete with corporations ten thousand times the size of your store. I DO agree that there needs to be a compelling reason to enter these stores, and for me personally, that reason is that most of my local stores have very affordable used, hard to find discs. But I almost never buy anything new, because it's never on sale and usually about .50 cents lower than MSRP.

You are essentially right bravesmg in some ways. From what I understand bands do make very little from CD sales and a very large portion (ie most) of what they make come from being on the road and selling shirts and such. That is why most of these 'indie' bands are road warriors. That is where the money comes from and how they survive for the most part. You can say that about most musicians but in general 'indie' bands are the most thought about when it comes to it. I'd like to say I will cry an eye for some Mom and Pop stores but not so much. More people will listen to the music perhaps and that is a good thing I believe. I feel bad for these Mom and Pop stores I suppose but in the long run some can survive because it is not like Best Buy will be carrying everything in existence. It will just slow some down a bit and that to me is not a huge problem but maybe I am jaded since I don't like paying $20 for CD's.

I side with Mr. Merge and Mr. Matador.

ya...frankly I could care less who gives me my music...as long as I have it...again...i bought these cds instead of simply downloading or borrowing them and burning them from someone else...i mean when i walk into a store and 1799 or 1899 for a cd I tend to tell the store to fuck off...plus i could do without half the kids workin in small record stores now a days or the music snobs who laugh when u buy a cd that wasnt engineered in the back of a pickup truck and actually sounds decent because a record label put it out!

On the otherhand I HATE how people at Best Buy THINK they know what you NEED and what you WANT and they dont hesitate to tell you! I treat there employees the same way i would any stranger who gave me a cd and said here, by this...they get the cd thrown back at them! Surprised best buy hasnt tried selling warranties on their cds

I go to whoever has what I want (in stock) for the cheapest price.

If Best Buy had the Japanese import Backyard Babies live CD/DVD combo for a cheap price, I'd buy from them. If not, then I have no problem spending $40 for it at the indie store.

I don't know about other areas, but some of the indie stores around me have cheaper prices than the Best Buys on some major items (like the last Foo Fighters DVD. Indie store had it for $7.99 when it came out. Best Buy had it for $9.99).

To tell you the truth though, both the indie store I go to and Best Buy have been very poor at stocking items I'd want though. I usually end up going to interpunk or amazon used to get what I'm looking for.

Fuck'em all.

Music is grossly over-priced anyway. We shoudln't be paying more than ten dollars for any fucking CD.

Until the recording industry and the retailers can figure that one out, sales will continue to decline.