Thursday, February 23, 2006

What is the Best Buy and Why?

Best Buy to Indies: Drop Dead

A PFM “story” this 101 is a fine starting point but skimming the surface doesn’t tell the bigger more realistic truth behind all industries need to co-op or the history of its price points. This is not the kind of writing I excel at but here is a list of points you might want to consider after reading PFM’s Best Buy story.

I really recommend reading the PFM piece before you read this which is the link at the top of the page.


This PFM story isn't timely; as their article states this whole pricing at the chain level issue was posted by Patrick from Carrot Top back on 1/24/06. I guess it takes a month to obtain a few quotes a throw together a small news story?

Co-oping is an industry standard used by businesses of every shape and size; it is not just a music industry practice. That toothpaste on sale, the Coca-Cola at the end of your supermarket isle, the magazine featured in the window display, these fabulous positioning and pricing points are secured by a co-op.

A co-op is not a bad thing. It is as the name suggests a cooperative effort where there is something in it for everyone. A food co-op works on the same principal and people seem to be okay with those.

Chains are not the only people who co-op. Most small ma & pa’s carry their own brand of in-store promotions as well as on-line promotions and there are also several indie music store coalitions like CIMS and AIMS who run their own specialized co-ops (IE exclusive records and added values) that chains are left out of. In fact CIMS had a program running with their coalition of stores which offered an exclusive Broken Social Scene 7” single if you purchase the BSS full length from them.

Lets investigate the necessary evils of a smaller record store who often sell the promo cds they are given for free as promotional tools that say in big letters DO NOT SELL. The practice of selling “used” cds is a perk chains do not participate in. The ability to buy and sell cds also offers these smaller stores something the big chains cannot and do not offer.

Loss-leader pricing is not illegal. The whole idea is to lure you into the store for a cheap cd and hope you walk out with a stereo or a computer. They wouldn’t do this people unless it worked. In fact I wonder how many people reading this or even the person who wrote the PFM article or Patrick at Carrot Top have purchased an item like a TV, stereo, camera, DVD player, video game system at one of these evil chains with great prices.

It is common for a small store to actually buy stock at a chain because it is in fact cheaper than buying it from a one stop or a distributor. In an industry striving for impressive Sound Scan numbers (the bigger the better) not only is this artist / record label getting one sale / scan per unit purchased but a second scan when the small store sells it to one of their customers.

Not all the titles in the Best Buy program were hot off the presses new releases which means the indie stores who would normally break these kinds of artists had the first pass at it.

The chain stores sell a shit ton of records, like it or not, and a label would be crazy to not want to be a part of that. A label wants to sell records for themselves and their artist and when opportunity knocks, especially in these tough retail times, you take it. It would be irresponsible to your roster not to.

Why is a loss-leader good for a label / artist / distro? The idea is as Mac Merge puts ir "Someone who discovers an artist because the 'popular' record is on sale at Best Buy will then hopefully be driven to find out more about the band. [Then,] they'll have to get the back catalogue at a store that sells mostly music." Trying to capture back catalog sales is one of the key reasons labels like to co-op besides the obvious reason of wanting to move a title right of the box / the week a record streets.

If a person purchases a cd at a chain maybe, just maybe this same person will further support the artists and go see them live or buy a band shirt which these days seems just as important as owning the music itself. Don’t get me started on ring tones.

The selection at most chain stores are limited to HOT titles meaning new releases. One would typically need to turn to a smaller retailer if you want the earlier releases by these newly popular indie bands. Does the serious indie music fan buy their music at a Best Buy or Circuit City, for the most part the answer is no. In fact I know many an indie kid who won’t step foot in a chain on principal alone.

If these indie stores with doors as so important to Pitchfork why are there none linked to the PFM website?

How about an article about indie rock being the new mainstream?

Let’s investigate the buying public’s love for the big box retailer rather than the local independently owned stores. I hate to point out the hypocrisy but how many people shop strictly shop at just DIY locations??? Why is it okay to buy your food or shoes or books from a big chain but not your music?
I respect a DIY standard of living but I don’t know many people who truly live up to it. It’s like a vegan who eats meat or cheese if it’s given to them for free.

There are so many other / better tangents worth investigating like why the music industry is a mess, a fucked up failing pyramid of cause and effect. Lets start with how easy it is to make a record these days, ANYONE and everyone seems to be doing it and we all know just because you can do something doesn’t mean you should.

How about a never ending influx of labels who think it is a good idea to put out all these records? Do you know how many records are released a week? Thousands and I ask you how the hell a store is suppose to carry all of these titles that may or may not sell. Can you blame retail for wanting to focus on the sure things? The market place is flooded and with this gluttony of product dirty business habits are formed. It is cut throat out there and the sad reality is it takes money to make money and if a label wants to stand a chance and actually sell some records, they have to be pay for a co-op in hopes of standing out against a sea of other products. It doesn’t always have to work this way but this is common practice.

Why not explore what a cd actually costs to make or how inflation affects our industry on the whole. How are manufacturing companies suffering when oil prices shift? When it cost more to ship product to warehouses and stores who is suppose to swallow that price increase? Every part of the music industry has a bottom-line and what are all the different pieces of the puzzle doing to work it out together? Are artists willing to take a smaller cut from record sales and have their cds and records act like a marketing tool to other money making adjuncts to their career like touring or tee-shirts? Are labels re-working contracts with their artists and creatively working together to help bring cd prices down? Why is a 16$ Cage show okay but 13.99 for his cd isn’t. Sisters of Mercy and the Warlocks is 50$ at Webster Hall. Animal Collective is 22$ at Webster. So you are willing to pay out the ass for a live show, a happening that comes and goes but not the artist’s actual cd.

If we are going to complain about music related pricing at the very least we should look at ALL the heads of this ugly beast.