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Thread started 07/20/06 3:10pm

lastdecember

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The problem with labels and their thinking

Heres the whole issue of what labels are doing that is basically leading to their destruction, and its all in their way of thinking, and the bottom line. First problem is Pricing, not many people know how this goes, but since i put in 18 years in Music Retail and basically did the ordering let me break it down. Stores have NO control on this, the reason a Best Buy can charge 8-10 dollars for a CD and others have to charge 11-15 comes down to this, Best Buy and those types of stores, lose about 2 dollars a cd, new releases that is, thats why you are limited to the amount you can buy in those stores, also because chains like Best Buy are not considered music stores, they make their $$ of electronics and all the other stuff they sell. Other chains like Tower, Sam Goody have to sell at a higher price. A label will charge a store about 11 dollars for a CD, now in turn a store has to charge 12-15 because it has to make $$. The reason people forget is that these stores, have to pay rent, employees, electric bills, etc.. So if it only sells CDs and DVDs they cant lose money on those things. This obviously in turn led to alot of these chains shutting down 60-70% of their stores. So why do labels charge so much? well they employ too many people, between media people and lawyers and all that stuff, its out of control.

And the big problem with labels is BOTTOM LINE, how many units can we sell week one is what they think about, music is no where on the list of their thinking. To quote an actual LABEL exec i spoke to recently. I asked someone at UNIVERSAL about a-ha, now a-ha is signed to Universal everywhere BUT here. The new album since its release has sold a million+ in European markets and spawned 3 hit singles, I asked him why Universal didnt release them here. He basically said, first of all they are from the "80's we cant market that", also "the members are 40 years old at least and so we cant do anything with that here, in europe it works but no here, and lastly we need them to sell 100,000 week one, we cant expect them to do that, so we cannot put the push into it. So i told him "its a great record, alot of Critical success worldwide" and he said, reviews dont mean anything because we are selling mainly to people who dont really read reviews, its not about the quality of work for an artist. WOW pretty damn said, now thats the leading label in the USA talking.

"We went where our music was appreciated, and that was everywhere but the USA, we knew we had fans, but there is only so much of the world you can play at once" Magne F
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Forums > Music: Non-Prince > The problem with labels and their thinking