Maybe Its The Music Retailers Who Are The Problem, Not The Labels

from the a-different-perspective dept

Kevin Laws, a current VC who used to work in the music industry has been writing up a series of articles about the music industry, relating to the issues of digital music that take a different perspective than most such articles. His latest piece, suggests that the real problem isn’t the RIAA, but the music retailers who have the labels over a barrel. He mentions that the labels wanted to try electronic distribution many years ago, but it was the retailers that blocked the efforts – saying they wouldn’t sell the CDs of any distributor who supported the plans. So, while the industry claims that downloading is killing the music business, they’re really afraid that the music retailers would flip out at any real effort to offer music online – and losing the support of retailers would kill record labels much faster than any downloaders would. He predicts that as online distribution grows through non-traditional means, eventually the quiet threats from retailers won’t be as meaningful, and then the RIAA will become big supporters of the wonderful idea of distributing music online.

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Comments on “Maybe Its The Music Retailers Who Are The Problem, Not The Labels”

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Oliver Wendell Jones (profile) says:

Recent example

Sony produces an online RPG called EverQuest. The latest expansion pack for EverQuest could be purchased in one of two ways – directly (electronically) from Sony within the game interface, or in a pretty box on a shelf at your local retailer.

The price online was cheaper than the boxed edition, plus you got the satisfaction of having immediate access the day it went live, vs. having to stop at the store on the way home and pick up a copy.

To keep the retailers happy Sony put an EverQuest keychain in the boxed sets and also included a free in-game gift, but only for people who bought the retail version.

By *adding value* to the retail version they were able to sell large quantities of copies even though they were more expensive and less convenient.

Luckily Sony is also a major music publisher and a member of the RIAA. Maybe they can mention this the next time they get together.

AMetamorphosis says:

Scapegoats ...

Someone start the bar-b-Que … I see a new scapegoat available for roasting.
Never once in the past has the RIAA used this as a legitimate reason as to why they can not or will not get their act together and provide legally download-able songs. Music retailers would not be put out of business because there are always people willing to pay for ” additional content ” that could be provided @ the retail level as has been mentioned in the well written previous post.

Maya Reed says:

music retailers

As an owner of one of the last independently owned music retail stores, I can tell by your article that you have no knowledge as to the terms and conditions of owning a retail music store.

I pay $9 – $13 average per CD WHOLESALE for my inventory, so to say that we as retailers are maxxing out the pricing is an uneducated comment. It is the record labels who are setting the prices so high for the retailers, so to make just a mere $5 per CD, we have to charge upwards of $20.

The labels are keeping prices high because they are losing out from the online music industry, especially Apple and I-Tunes. A recent article in Rolling Stones Magazine comments on how Apple is negatively influencing an entire industry, and many labels are trying to re-negotiate with them (which they won’t) or threatening to pull their contracts. With the labels being undercut by the online industry, they cannot afford to lower prices, which keeps the retail prices high in order to keep our doors open and put food on our tables.

My suggestion – pay someone for your music. Pirating is wrong! Pay for your online music, or pay for it in a store, but don’t steal it. Those who do are contributing to the demise of an entire industry, one that you enjoy on a daily basis!

Thank You,
A Retailer Trying To Make It Work…

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