Appetite For Disruption

Wal-Mart Exclusives Redux

The NY Times chimes in with more on the general trend at Wal-Mart for their artist-specific exclusive.

Some further thoughts - from an artist's perspective.  With all due apologies to the Coalition of Independent Music Stores (CIMS) - who are doing a fantasic job waving the banner of the traditional music retailer - has music retail been so eviscerated that we no longer care where we buy our music from?  If that is the case - and I believe that it is - then labels and artists need to strategize whether releases need to be marketed to a wide swath of retailers, or just to a single retailer, to garner the proper sales impact.

In the world of "alternative distribution" labels are seeking to place their commercial product into so-called "non-traditional retail."  They seek to get chains to buy a few hundred or a few thousand copies of CD releases which are also marketed to traditional record retail brands.  But hasn't the recent history of Wal-Mart, Best Buy, and Target shown us the key to getting the most out of a retail partner is to get that partner to double down and commit to an exclusive that retailer needs to provide marketing for?

There is a downside to all these exclusives.  Some people just don't wish to go to Wal-Mart to shop for music because they want a more memorable music shopping experience.  They want to be able to browse through many more CD titles than Wal-Marts stock.  But artists are saying to the consumer: "I appreciate that you may cherish a different kind of music purchasing experience, but I just want to get my record out to a mass audience with as much marketing and as cheaply to you, the fan, as possible.  I care less about your music-buying experience than in your 'buying MY music experience.'  Wal-Mart delivers the best value to you on that front."

We all know the "long tail" can't be replicated at brick-and-mortar retail.  The question is now: are retailers (figuratively) cutting off most of the body and selling just the head, the top tier of marketable artists?  Is this the trend which will leave most music shoppers left with no physical place left to shop for even basic CD product selection?  Will Amazon win with these music fans just due to competitive atrition?

E-commerce Sales of Physical Product - Revisited

As I mentioned in my last post - sales of physical CDs were up 2.4% at E-commerce sites last year.  E-commerce sites can offer up wider selection of product, allow customers to listen to audio clips of tracks, and peruse editorial and customer reviews of the album.  What the E-commerce experience lacks in immediate customer gratification it gains in terms of ease of shopping experience.

Yet sales of albums at E-commerce sites represent just 6% of overall album sales.  For labels with huge catalogs facing further consolidation of record retail floor space E-commerce sites represent the last best hope for the compact disc.  So where is the great marketing effort on the part of the major labels, the RIAA, and independent labels to drive customers online to purchase physical product.  This does not mean shunning label retail partners.  So many major music retailers have online sites which sell music as well.

But it also broadens the number of accounts the distribution companies ought to be targeting to sell physical product (and digital music as well).  So many "non-traditional" retailers operate E-commerce operations.  Why not get these accounts to test the viability of music sales via their web site?  How can the labels get these retailers to give them visbility on their site?

The point is this: in this area where the labels have a growth story to sell we hear little from the industry touting this success.  Now is not the time to play possum.  Now is the time to flaunt your plumage like a peacock and go out and convert the non-believers.  CDs, especially catalog and deep catalog in this current market, need to be championed.  Get out there and grind it out!