UPDATE: Well, goes to show ya. It’s been pointed out to me that this article is two years old which I didn’t notice when I found it. What’s interesting is that while the situation hasn’t really changed as far as music is concerned, the money now is in DVDs and again, WalMart is the leader in retailing them. Their primary competition is with Apple and iTunes, so here’s a recent article on what WalMart is doing to — I suppose technically it’s the right word, although using it in the same sentence with WalMart is a little odd — compete.
Wal-Mart to RIAA: We’re not gonna take it!
As a quick recap, the music industry was running a “minimum advertised pricing” scheme (MAPS), under which they’d withold valuable in-store promotional materials (i.e. giant cardboard cut-outs of Outkast, posters of Britney, and the like) from large retail chains that advertised CDs at low prices as a way of drawing people into the store. Wal-Mart is one of the chains that uses CDs as a loss leader, so when the feds found that MAPS was another just word for “illegal price fixing” Wal-Mart went right back to its loss-leading ways.
Now, the retailer is tired of losing money on CDs, and has told the music industry to lower prices, or else. Wal-Mart is looking to sell CDs for under $10 (still a rip-off in a world of $15 DVDs), and still make a profit. Here’s a quote from the Rolling Stone coverage of this that gives you an idea of how much clout Wal-Mart has in the music industry:
Tensions are not as high now as they were last winter, but making sure Wal-Mart is happy remains one of the music industry’s major priorities. That’s because if Wal-Mart cut back on music, industry sales would suffer severely — though Wal-Mart’s shareholders would barely bat an eye. While Wal-Mart represents nearly twenty percent of major-label music sales, music represents only about two percent of Wal-Mart’s total sales. “If they got out of selling music, it would mean nothing to them,” says another label executive. “This keeps me awake at night.”
Wal Mart feels they need to compete with online media purchases. CDs have been overpriced for years now, and actually cost much less to make than the old vinly records of yore.
One things for sure, is that online media does not come close to the disc s. Online music and video is much lower quality, and it doesn’t take an audio/videophile to tell the difference. Add to this the fact that you really don’t quite “own” this media. Oh, maybe you do if you burn your iTunes music to a CD, but if you do, the sound quality drops just a bit more.
I’d much rather have a CD, or DVD, but I’d definitely like to pay a bit less for them.
Finally, a sudo-Monopsony breaking up an Ogopoly! (something the Government is unable, or unwilling to do) This is an example of the “market” actually doing what it’s supposed to do for once.
2 Online music and video is much lower quality, and it doesn’t take an audio/videophile to tell the difference.
The problem for people who can tell the difference is that the world got “napstered”…
Symptoms in the general populace: 128k became “okay”, 192k became “good”, and >200k VBR became “sweet!”… while 320k transitioned from “best” [or, as I like to think of it: “minimum acceptable”] to “overkill” & “wasted space” on portable players. 🙁
People may use lossless to archive their CDs, but how many of them listen to music that has not been run through a mp3/aac/wma regurgatron? And may not ever, the way things are going?
You shouldn’t be buying at Wal-Mart anyways. They don’t give health care to their workers. The CD prices should stay high and you should pay more at smaller stores.
She looks just fine too. 🙂
6. I am such a weak man, Uncle Dave, I am soooo weak…
#5 How can you tell she looks fine? You can’t see her face. 😮
On the subject at hand: CD is the way to go. Period. Or SACD or DVD-audio, or whatever physical media they come up with. Online music selling is such a racketeering business: you get bad quality, no libretto, and no ownership for an Album at 9.99$. Sometimes you can get the same CD at amazon for less. Then rip it to 128AAC and play it on your iPod, ok sure, for portable audio is fine. But for everything else, CD quality is the absolute minimum. If consumers settle for anything less, the CD will go the same way SACD. And we’ll be stuck with recordings @ a lesser quality standard than the 60’s recordings.
Yeah well, the RIAA ain’t gonna squirm too much or too far until we get their grubby hands off our ballz. Why do we need legal monoplies and why do we continue to let our corporate “benefactors” create them ?!? Bah !!
Darn..I almost forgot…as for the picture shown…I say to her,” PROVE IT”..to me first.
The “loss leader” in marketing is an interesting concept. Up in Canada, for example, you can get a complete breakfast at Ikea for $1 Canadian – what, 80 cents US? That’s almost like a “dumping” price. Of course, Ikea couldn’t care less about making a profit on this. And then the poor mom & pop down the street has to deal with that. Just an observation.
Maybe soon you’ll be able to buy everything at cost because somewhere you can get the item as a loss leader. Pick out a sofa to go with your Denny’s Grand Slam.
RBG
#7 & 9: Her shirt says she FEELS just fine. I believe you have to, um, feel her to know that the slogan is correct rather than see her.
So how much should these things cost?
And here’s the rest of her.
That was a let down.
[edited: see comments guide]
From the Rolling Stone article:
This breakdown of the cost of a typical major-label release by the independent market-research firm Almighty Institute of Music Retail shows where the money goes for a new album with a list price of $15.99.
$0.17 Musicians’ unions
$0.80 Packaging/manufacturing
$0.82 Publishing royalties
$0.80 Retail profit
$0.90 Distribution
$1.60 Artists’ royalties
$1.70 Label profit
$2.40 Marketing/promotion
$2.91 Label overhead
$3.89 Retail overhead
Note the label earns more then the artists.
What is the label “overhead”, they already broke down the manufacturing, marketing, distribution, and royalties. What else is there?
What about the executive offices? The lawyers? The STUDIOS? And all the midlevel employees and even the janitors?
#15 so send Wing Attack PLAN R to the bombers already!
Nothing is going to happen. Even if Wal-Mart stopped selling CDs, other stores would take up the slack.. Heck, even Tower Records would get back in business!
What is the label “overhead”, they already broke down the manufacturing, marketing, distribution, and royalties. What else is there?
“Label Overhead” looks pretty much like a bill of “costs” you get from a criminal defense lawyer. $2 for each photocopy they make in your behalf, paperclips, staples, envelopes, postage, plus legal fees (where the costs begin to get recursive.) Besides, have you priced limo rental and cristal champagne lately?
It is alleged (ahem) that “organized criminals” took over MCA at one point (look up the story of ElectroHarmonix), but the business turned out to be too cutthroat for them.