SIDENOTE: Forget downloading, Wal-Mart is going to put the RIAA out of business.

http://www.zeropaid.com/n...wer+Prices

posted by soulxtc in music // 12 days 5 hours 38 minutes ago

Proposes five-tiered pricing plan that would allow it to sell albums at even lower prices and require the labels to bear more of the costs.

The world's largest music retailer has more bad news for the music industry and this time it's that it's demanding a five-tiered pricing plan similar to the one it currently has with DVDs. Some speculate that it will remove music entirely if they refuse.

Already suffering from slumping physical CD sales and ever present illegal file-sharing, the news comes at a difficult time for an industry trying to stay afloat. But, it will be a difficult choice considering that Wal-Mart comprises some 20% of the domestic music market.

"The decision might come down to: Do we give up 20 percent of our business (i.e., Wal-Mart) in order to not lose the entire business?" says one music exec.

The Wal-Mart proposal consists of a promotional program that could comprise the top 15 to 20 hottest titles, each at $10. The rest of the pricing structure would apparently have hits and current titles retailing for $12, top catalog at $9, midline catalog at $7 and budget product at $5. The move would also shift the store's pricing from its $9.88 and $13.88 model to rounder sales prices.

The reason for the move is that slumping CD sales have forced Wal-Mart to recognize the reality that the music industry seems unwilling to face - the music biz is changing.

"When you look at sales declines with physical product, and you have a category declining like it is, you have to make decisions about what the future looks like," said Wal-Mart's Jeff Maas, divisional merchandise manager for home entertainment. "If you have a business that is declining and you want to turn it around, it really takes looking at it from all angles."

He cited DVDs as a model for tiered pricing. "(It) has been around for years and has worked very well," he said.

One music label executive said that "This sounds like the Hail Mary pass, and if it doesn't work, they could be out of the music business; or maybe they reduce music down to a couple of racks" from the 4,000 titles carried by Wal-Marts with larger selections."

One thing's for sure, and that's that the music industry, whether it likes it or not, may be forced to embrace the future of music distribution whether it likes it or not. With illegal file-sharing as rampant as they claim you'd think they'd be interested in increasing demand for physical CDs vis a vis cheaper prices. I guess not.

Maybe Wal-Mart's not such a bad guy after all.

The demand for CDs is going down... so the price should be lowered.

Problem is when the demand was high, the price was already "low".

Cinnie said:

.....and the selections were (and still are) few.

But THIS is classic Wal-Mart for you. With the economy looking more doom than before, lower prices on all items are exactly what the lower & middle class needs.

I'm going to Wal-Mart from now on! If every CD I see that I WANT costs only $5, my broke ass is getting it!

They're lucky Wal-Mart has let them slide this long.
Wal-Mart is notorious for grinding their suppliers to come in with a lower price every year.

From a PBS Frontline documentary, Is Wal-Mart Good for America?
Former multi store manager Jon Lehman is being interviewed...

Well, take a case like Rubbermaid. There was a very, very well-known American company. They're making all kinds of products, office products, in-and-out trays and garbage cans and all kinds of things in plastics and so forth. And they got into quite a confrontation [with Wal-Mart]. Who's in charge at that point? Was Rubbermaid selling stuff to Wal-Mart, or was Wal-Mart dictating terms of what it wants to buy? ...

... Wal-Mart puts the pressure on these manufacturers to: "Come in here and sell me the same merchandise you sold me last year, but sell it at a reduced cost. And we know you can sell it to us at a reduced cost, because we've been to your factory. We've seen your books. We've seen your cost of product, cost of shipping," so on and so forth, "your wage cost." They look at all that, and they call it "partnership."


So this information technology -- I mean, Wal-Mart makes a big thing about sharing information technology. I guess Retail Link was the software that they had.

Retail Link, that's right.


Retail Link. They shared Retail Link with their suppliers. So this is presented as being really a win-win situation. This is a partnership. You're saying it's something else?

I think it's arrogance. I think what it boils down to -- and we talked about Rubbermaid for a second there. Rubbermaid had a situation they got into with the cost of resin to produce their product. Rubbermaid tried to communicate that there was a price increase in the cost of raw materials that it took to make these totes and storage containers that they sold at Wal-Mart.

And the buyers at Wal-Mart -- my understanding is that the buyer said: "No way. You're not going to raise your cost. If you can't sell it to us for the same price or less than you did last year, we'll find somebody else. We'll go to another company." And that's what Wal-Mart tried to do, and it really hurt Rubbermaid.

The communication is one way: It's our way or the highway. You do it our way, or you hit the highway. We'll find somebody else.

http://www.pbs.org/wgbh/p...ehman.html
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=

And because Wal-Mart has become the largest music retailer, they will not allow the majors to ignore this proposal.

This ought to be fun to watch.



tA

Tribal Disorder

http://www.soundclick.com...dID=182431

TonyVanDam said:

I wouldn't put it pass Target, Best Buy, OR Circuit City to do the same thing if Wal-Mart gets the last laugh at the RIAA.

Trust me, if Walmart does this, then Target, Best Buy AND Circuit City will all follow Walmart's lead. When Walmart lowered their generic prescription drug prices to $4.00 for fill, Target and Costco quick jumped in to match their prices. Once Walmart can dictate the price of CD's, then the whole retail industry will follow their lead.

DREAM ON PEOPLE! No way will walmart get major corporations to lower their prices. Even the biggest companies back in the day couldnt get them to do it, this is the reason you lost Musicland, Sam Goody,Tower and now you are losing FYE and tranzworld and very soon Virgin will be gone. Best Buy is cutting their CD stock by 30% in stores, Circuit City is closing locations, the physical "form" of music is gone, unless you live in major cities and have little record shops, you better get yourself a good fast computer and start downloading iTunes and whatever. But dont think for a minute that this isnt all related.

For years and years i had to school people on how the business works, people always bitched about prices and thought it was the record stores ripping them off. Just this past friday i picked up the new Danity Kane prior to street date in a local cd store here in NYC (mom and pop store) and the price was 15.99, do you know why? because the label charged them 14.49 to buy it for their store, than factor in all the other costs that stores deal with, RENT,LIGHTS,Workers etc..im surprised any are still open. I always said that the places selling their stuff CHEAP for 9 and 10 bucks were going to lose it sooner or later, and now its taking its toll, walmart and best buy lost about 3 dollars or more per cd.

lastdecember said:

If (and I say "if" loosely!) the RIAA were to turn down Wal-Mart's idea of lowering the album prices, it will not kill Wal-Mart at all. They're still get by by selling other items as usual.

For anything, the RIAA will be the real losers because now all of the sudden, none of the retail stores are going to stock up on mainstream albums at all. How else are the major labels or the RIAA are going the make their money then?

Who buys CDs at Wal Mart?

we just bought the vampire weekend CD at target because it was a lousy $7.98. curiosity about the hype plus the cheap price is what sold us. i dunno if this is a good thing, a bad thing, or a bit of both, but if it wasn't priced cheaper than most used CDs at a regular wrecka stow, i doubt we would have picked it up.

bboy87 said:

Well everybody parades around Wal Mart where I'm at. We nickname it "Wally World".

Timmy84 said:

cats stopped buying CDs at Walmart when they started editing the content
I'll buy everything else though. Hell, my mall replaced Sears with a Walmart!

Walmart's cool, but I love Target and Costco/Sam's Club

theAudience said:

I remember some documentary about the Rubbermaid incident.
Wal-mart are such gangsters. All they care about is the profit margin.
The retailer I worked for at least cared about the vendors & suppliers,
because we all have to feed our families.

Wal-Mart is evil

Janfriend said:

They sure are...
they only care about the money,
not really the people.
They put the local factories out of business
then they have the nerve to build
a store in the same town
and the former business owners
are forced to work for walmart.

theAudience said:

This is an interesting move coming from an company that's Anti-Union .
[Edited 3/18/08 0:59am]

bboy87 said:

Yeah I feel you. Target IS a better store now.

Anxiety said:

Janfriend said:

...and so are the record labels.

Janfriend said:

So is Wal-E.



Don't believe the hype.

I've noticed prices going up lately at Wal-Mart-esque Meijer. They used to put out all the major new releases at the Best Buy type prices of $9.99 for huge major label albums (the ones that peak at number one or damn close) and $11.99 for albums for albums with less expectations...now it's like $13.99 and they carry a hellvu a lot less CDs. Wonder why? Prices do have to go down to be competetive, that's for damn sure. Wal-Mart sucks but they are right. And prices should not jsut go down for Wal-Mart but every store out there.

bboy87 said:

I hate Wal-Mart and I think I've only spent maybe a total of $20 there in my entire life (part of that was a He-Man Best Of Set that I had to have as soon as possible...at midnight!). But I wouldn't doubt that the general public buys a ton of CDs there...after all, the Eagles sold their CD only at Wal-Mart (and on their site...but I assume most copies came out of that even store).

A Wal-Mart at a mall is terrible!

It's a damn shame when a company that sells such a wide variety of items such as Walmart would even be successful enough selling music to have a say so. Even before Walmart, stores like Howard's, Roses, TG&Y, etc. had a small selection of music but people knew where to go to get the real jams and it sure wasn't those stores because they only carried the most popular. Walmart is no different when it comes to selection.

The problem is, people today have let stores like Walmart as well as other large corporations become their taste in music. I'd like to see Walmart and the record labels go down the drain together.

vainandy said:

That won't ever happen as long as greed runs this world.

Timmy84 said:

Costco is my store. Where else can you get baby bearskin rugs for $15?!

Last time I was in a Wal-Mart while visiting my mom, I perused the CD section to see if they had anything good for the ride home.

Nope.

I ended up buying some CDRs and going over to my buddy's house for a dubbing session!

In all seriousness, the first thing that comes to mind when I see that is:






How are they going to get the artists to bear the brunt of the cost-cutting?





Someone is already looking into it. Those guys know how to count money.




And if the value of a new LP is set at $11 or $13, what's that going to do to independents who are already scraping by?

bobzilla77 said:

b]Like artists would have a choice. I hate to quote a sorry ass rap movie but they would have to either "get down or lay down" just like the labels. Artists would have to go independant, skip out on the big budget music videos and sell their product online through various distributors like iTunes.[/b]