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Music Media Businesses The Almighty Buck

EMI Only Selling CDs To Mega-Chains From Now On 334

farrellj writes "According to Zeropaid, record company EMI has been notifying small music stores that they will no longer be able to buy EMI CDs from EMI, and will have to buy product from mega-chains like Walmart. Independent record store customers are some of the most loyal music buyers around. You are not going to find the back catalog, what used to be the staple of the music business, at your local Walmart. One wonders when the music business is going to run out of feet to shoot?"
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EMI Only Selling CDs To Mega-Chains From Now On

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  • by fyoder ( 857358 ) on Thursday July 30, 2009 @02:07AM (#28878085) Homepage Journal

    EMI is one of the big four RIAA member labels, along with Sony, Universal, and Warner. I stopped buying their shite ages ago, and I don't really care if I'm not buying it from a little store or a big one.

  • Re:What the hell? (Score:3, Interesting)

    by LKM ( 227954 ) on Thursday July 30, 2009 @02:21AM (#28878159)
    Presumably, one explanation would be that the profit from the smaller stores that it is smaller than the administrative cost of sending them CDs. They could ask for more money, I guess, but perhaps they just don't want the administrative overhead.
  • by freedom_india ( 780002 ) on Thursday July 30, 2009 @02:31AM (#28878229) Homepage Journal

    You gotta think like a Music Executive to understand their logic.
    Fixed Costs and shipping costs per CD shipped rise uncontrollably when sending it in small batches to mom-and-pop stores.
    Their sale price is fixed. WHich means, EMI earns less from each CD shipped to corner store as its shipping costs eat up money.
    Better way is to ship HUGE amounts to a few stores and ask the corner stores to buy their copies from them.
    Of course it assumes that small shop owner still want to waste their time & money and drive to Walmart supercenters, negotiate a price with manager and come back with 100 CDs of latest Jessica Simpson singles.
    LOL
    That wastes two days: one day for shopping and one for sorting.
    Who the hell wants to do that.
    If i were a mom-and-pop shop owner, i would point my customers to allofmp3.com or some other seller of mp3 songs.
    EMI's CEO has proved his tactical sense for next quarter results is strong, while his strategic business sense is as low as the IQ of his Turd.
    Good luck EMI. You have given me one more reason to pirate.

  • Re:What the hell? (Score:2, Interesting)

    by 91degrees ( 207121 ) on Thursday July 30, 2009 @02:43AM (#28878285) Journal
    What will end up happening is a distribution organisation will be set up (or one of the mega-stores will set one up), that will buy in bulk and take on the costs of dealing with small orders themselves.

    It's rather a shame for the small businesses who will end up paying for this, but I guess that's how business works.
  • by JudasBlue ( 409332 ) on Thursday July 30, 2009 @02:51AM (#28878325)

    One stops are mid level distributors that carry product from multiple labels. Somewhere the person writing this article got very confused by what is going on here.

    If you look at the article comments there is a guy there who is also pointing this out.

    Not saying EMI isn't annoying as are most of the labels, but this article is seriously confused.

  • by fishbowl ( 7759 ) on Thursday July 30, 2009 @02:59AM (#28878365)

    I stopped buying EMI products the day the Harry Fox Agency accused me of being a criminal for putting my own work on the web.

    Not only did I stop buying things from this company, I went from being an *avid* collector to them being *dead to me* and unlike some others, I never looked back.

    At the same time, I started discovering independent music, *many* genres with artists who are far more interested in getting their message out than getting a 1/16th cent royalty from you. Many of these artists benefit from being discovered -- not by a record producer but by YOU, the person who might become a fan after listening, and who might actually attend a concert, not at a megastadium but at a club or a festival.

    I don't really care what EMI does, or doesn't do. They are dead to me, and I do not believe in ghosts.

  • Re:What the hell? (Score:4, Interesting)

    by thesp ( 307649 ) on Thursday July 30, 2009 @03:08AM (#28878419)

    Because often, aspiring artists are not being courted by many labels simultaneously. Remember, most in the music business are looking, and perpetually waiting, for their "big break" - a major label offering them a contract. No-one will turn down a label because they think they'll do better with another. Labels are not a service industry for musicians. Musicians are raw material for the labels' products.

  • by twostix ( 1277166 ) on Thursday July 30, 2009 @03:14AM (#28878451)

    In the days when free market capitalism wasn't a dirty word and huge corporations didn't think they had a birth right to cashflow and generally worked hard to make money - 10 or 20 cents profit per CD would have still been seen as profit and worth working for.

    Must be nice to have so much money that they can refuse to service customers because it requires some work.

  • Re:CDs? (Score:1, Interesting)

    by Anonymous Coward on Thursday July 30, 2009 @03:41AM (#28878617)

    Of course they might just be cutting costs and _not_ putting that effort anywhere except their bottom line.

    The music companies' biggest addition of value to the product is their distribution network, i.e., the ability to get audio data onto small, shiny circles, and get those small, shiny circles into clear plastic boxes, filled with pretty, printed paper, and then get all of the small, shiny circles and the clear plastic boxes and the pretty, printed paper onto the big delivery truck and then get the big delivery truck full of all of the small, shiny circles and the clear plastic boxes and the pretty, printed paper, out to all the Small, Shiny Circles, Clear Plastic Boxes And Pretty, Printed Paper 'R' Us stores across the country, for the poor, downtrodden consumer to buy.

    If the poor, downtrodden consumer suddenly doesn't want any small, shiny circles or any clear plastic boxes OR EVEN ANY pretty, printed paper, then the big ol' music companies are suddenly just ghastly, faceless corporate horror-shows who are charging customers obscene amounts of money for doing not-an-awful-lot for either the customer, or the musicians.

    So, yeah. I'm thinking that they're probably not going to do what you said.

  • by Mathinker ( 909784 ) on Thursday July 30, 2009 @04:07AM (#28878747) Journal

    I understand your current position, even if I don't agree. However, I think there is something you are overlooking, which is the collateral damage to society brought about by RIAA attempting to stop those "folks who infringe on their copyrights".

    Do you actually believe that 100% of the hundreds (or perhaps thousands, there is no real way to know how many) of people who are contacted by RIAA for paying a mere few thousand dollars to settle out-of-court are all guilty?

    You do realize that even for someone who is actually innocent, settling out-of-court is the financially correct decision to make in these cases? I'd like to refer you to the blog of attorney Jennifer Granick [granick.com], who represented Michael Lynn in "Ciscogate":

    At the point that you get sued, or even charged with a crime, it matters less what actually happened and whether you did something wrong and more what it takes to get out of the case as unscathed as possible. It's sad, but true, that our legal system can often be more strategy than justice.

    Even if you are innocent, a few grand isn't going to pay for much work from a lawyer who is good enough to go up against RIAA.

    There is also the matter of how distorted and dysfunctional copyright law has become because of lobbying by RIAA. Do you actually believe that it helps society (or even the record companies themselves!) that the term of copyright is so enormously long? It looks to me to be the opposite, even for them. If the term were only something like 10 years, I think that new artists recycling of works which still had some cultural significance would actually generate more music, and more interesting music, for the industry to push. And I doubt that the 10 year limit would actually change the recording industry's income by very much, the vast majority of their sales are either new acts or to people who wouldn't bother to waste time/effort looking for the free copy as opposed to just clicking in iTunes/Amazon/or similar.

  • by Cougem ( 734635 ) on Thursday July 30, 2009 @04:28AM (#28878825)
    EMI were a wonderful company once. They were not a mere record label, they were a leading electronics company. They developed the UK's first transistor-based computer, but arguable even more important is they helped Hounsfield develop his CAT scanner. The first CT machine was no the Siemes/General electric stuff we see today, it was an EMI. EMI have developed a machine that will probably save more lives than any drug (bar anti-biotics), for a tiny price (per scan).

    How the mighty have fallen.
  • Re:CDs? (Score:5, Interesting)

    by hrvatska ( 790627 ) on Thursday July 30, 2009 @04:54AM (#28878921)
    As this article [nytimes.com] points out, for musicians the alternatives are not just go it alone or sign with a record label. New business models are developing that permit musicians to raise money directly from investors and still maintain ownership of their copyrights and master recordings. While there may still be a place for the major record labels in the future, it's going to be a lot smaller than it is today.
  • Re:CDs? (Score:3, Interesting)

    by NickFortune ( 613926 ) on Thursday July 30, 2009 @05:12AM (#28879033) Homepage Journal

    However, their distribution network doesn't just consist of delivering those cd's to retailers or making them

    True, but it's debatable how many of the other functions you list add value from a consumer point of view. In some cases you could argue the reverse was true.

    This is why I think the record labels will continue to exist and will be used by artists

    Ah, now. From an artist's viewpoint, it's a little different.

    Its not necessary for artists to use them, noone force's them to.

    Indeed it's not. On the other hand, suppose you're seventeen years old. On the one hand, you have extravagant lifestyles of the rock-and-roll megastars. On the other you have the prospect of a career scraping by as an independent, self publishing musician. It's not much of a contest. In terms of common sense, it's a lot like spending all your cash on lottery tickets in the conviction that you're going to win big someday, but when you're that age, you know it's going to be different for you because you're special.

    In effect, it's a long con. The message is "if you work hard and have talent, then one day you too will be rich and famous". I think the reality of the matter is that there's higher profits for be made from a small number of megastars, than there is from lots and lots of stars, and there are more talented, hard working bands than the big labels can ever hope to use under their marketing strategy.

    So yeah, I think artists are going to continue to chase after contracts with the big labels. I'm just not entirely convinced that this is a good thing.

    all that usually needs lots of money and time and work. Not a single person can usually do so much, but go work with record labels so they can handle all the other stuff and artists can spend the time on their core thing -- making music.

    I thought that was why bands had managers, myself. Don't need a record company for that.

  • by Khenke ( 710763 ) on Thursday July 30, 2009 @05:29AM (#28879121) Journal

    I actually don't want to talk about piracy (since neither side can understand each other), but inability to get hold of "your special interest" CDs force people to piracy, as I will show here.

    I was on a education for 8 weeks and meet a person who truly was against piracy, really angry against pirates (of music, he didn't care at all about movies and so on) as he are a true music lover.
    He spend his life devoted to listening to music, all he was talking about.
    We had a great time arguing over the subject of piracy, me trying to explain why I do pirate music (I have bought nearly 500 CDs in my life too), as mostly because its an easy way to find new groups and so on, he protecting the music creators (and to some degree the record labels).

    But the really interesting part is that at the end he confessed that, against all he really believe in, he had downloaded a album from the Internet the last day.

    Why?
    He had spent weeks trying to find a place where he could buy it and failed, except for a few $100 from US I think it was (we live in Sweden). And as far as I know it wasn't an old and rare out of print album, just a hard to find album.

    What can we learn from this?
    That my convenience level against my morals are favoring me to piracy a lot easier, not that I don't want to pay (I really do), but no one wants my money in the way I want (to buy) my music.

    But also that, in my guess, EVERY ONE can consider piracy when it gets too hard or expensive (for them) to get hold on the music they want.

    For example, for the teenage people 15 min and $20 is both too hard (yeah, they are used to a lot easier access to life then when I was there some 20 years ago) and too expensive.

    And I do think the music industry is wrongly making this a battle instead of an opportunity.

  • by Heddahenrik ( 902008 ) on Thursday July 30, 2009 @06:51AM (#28879613) Homepage
    Every time someone pays $20 for a simply file-copy, a little bit of the Internet dies. This is because the incentive for the ones who over-charge this operation so heavily will increase and eventually they can basically afford to break Internet down (or make it so that you have to get everything via YouTube or Spotify like services where you are controlled).

    Allofmp3.com might be cheaper, but it's still evil and charge too much for a simple copy that really doesn't cost anything. And they only share their income with Russian artists, so buying from there it isn't even an inefficient way to donate to your favourite artist.

    I suggest the music stores start to sell other things than data-copying. Merchandise, tickets, social events (musicians coming there to talk), coffee, beer, guitar-lessons and so on. The entire CD-copying and iTunes industry that only copy small files can actually be replaced by a few band or fan-paid servers.

    So everyone would be better off if we just stop wasting money on plastic pieces and over-expensive digital shops and instead spent the money on concerts and donations to the musicians and writers.

  • by Anonymous Coward on Thursday July 30, 2009 @08:08AM (#28880169)

    I used to buy music and listen all day to help me concentrate at work. My CD collection growth stopped 15 years ago when more important things happened in my life. 10 years ago, I converted all my CDs into MP3s, loaded them onto a central server in the home and about 10% onto an MP3 player. Streaming music anywhere in the house has been possible for 8 years.

    I haven't listened to music of any form in over a week. AM news radio is my daily commute choice.

    My wife thinks music is just noise, so even Barry White doesn't get any playtime.

    I think this happens to almost all of us as we get older. Music becomes less and less important and irrelevant to our daily lives. New music much more so, since it doesn't bring back memories.

    This EMI news makes ZERO difference to me. Nobody in my home has purchased music of any type in over 10 years. Music distribution companies need to go the way of the IRS - gone. Artists can sell their music online without the middleman and control their own license terms, allowning their customers reasonable re-use. Music artists need a standard license agreement for their electronic sales. Think GPL.

  • Re:What the hell? (Score:5, Interesting)

    by BlueStrat ( 756137 ) on Thursday July 30, 2009 @09:08AM (#28880711)

    How much does a billboard cost these days, anyway? or a radio ad? Do you really need to sign your life away to get these things?

    Because it seems to me that all the labels really provide is the initial financing for advertising and studio time at usury rates.

    It's not the labels that pay for the billboards, radio ads, etc to promote a performance. It's the venues and event promoters. However, those venues and event promoters won't spend the money on a non-signed act, nor book them to appear in the first place. Nor will booking agents that handle those type of higher-paying venues accept an unsigned act as a client.

    For an average talented, but unsigned regional band to spend thousands on billboards, radio ads, newspaper ads, etc etc on promoting a gig at some average bar/club where they'd be making a few hundreds of dollars would be insane.

    There is a sort of glass ceiling effect where unless a band is signed, many of the most-lucrative venues and opportunities are simply not available.

    Strat

  • by tepples ( 727027 ) <tepples@gmai l . com> on Thursday July 30, 2009 @09:25AM (#28880917) Homepage Journal

    It's a bit of an irony that they go for "loud". CDs have a superior dynamic range than LPs, yet going for "loud" wastes this.

    The loudness race started in earnest with Sony's Discman and other portable CD players. A lot of these used a cheap op-amp to drive the headphones, and discs had to be loud in order to be heard over outdoor noise.

  • Re:CDs? (Score:3, Interesting)

    by mathx314 ( 1365325 ) on Thursday July 30, 2009 @10:35AM (#28882011)

    So now they're cutting extra costs by only delivering physical media to the largest retailers, and maybe putting that effort into online sales. If so, for me this sounds good

    Y'know, a year ago I would've agreed with you. But in that year I went off to college and discovered a wonderful little record store just off campus. Prior to this, the only places I ever got music were iTunes, my friends, and The Pirate Bay. I'm going to assume that's the case with you, that you've never been to a really good record store. Let me tell you what it's like.

    Inside the store they have three separate racks: new, used, and used-and-no-one-likes-it. The new rack generally sells albums for $12-$14, which is slightly more than iTunes would run you. The used rack sells albums for $5-$9, or slightly less. The third rack sells albums for $2, or $1 if you buy 10 or more at a time. The third rack's quality, however, is a lot more suspect than the other two.

    At this store, I found used albums by bands I had heard of, but never actually listened to (in this case, The Decemberists and Neutral Milk Hotel). I bought the used albums, listened to them, then went back and bought as many of their albums new as I could. I randomly stumbled upon a few great bands among the duds on the $1 rack, then bought some of their new stuff too. I splurged for the special editions of albums which I would not have on iTunes. In the past year, I have probably sent ~$100 on music. That's probably at least twice what I spent in the 18 years before that.

    If this news is true, it's very sad. In my mind, the way the music industry can stay afloat is as follows:

    1. Support indie music stores, because (in my experience at least) people spend more there.
    2. Stop using DRM. I've avoided a few albums specifically because I know they have DRM.
    3. Stop going after legitimate customers. I'm overall a legitimate customer, but I do have some pirated stuff. My absolute favorite artists though, like Sufjan Stevens and Andrew Bird, I originally got from friends. I then went back and bought as much of their discography as I could.

    So that's why I really don't want this to be true. I can't stand buying music in a large retailer, and hope that small independent stores can make a comeback.

  • by CastrTroy ( 595695 ) on Thursday July 30, 2009 @01:59PM (#28885053)
    Very true. As someone who is quite familiar with the way the distribution chain works, I was surprised that small retail stores were buying directly form EMI to begin with. I would assume that, like in many other industries, that small retailers would buy off distributors, who ordered in mass quantities. I worked for a small shop once (although not in music) and my boss often told me they could go down to the local department store and get products cheaper there, when they were on sale, then buying them directly from their distributor. It's a little unfair to the small businesses, but when you take into account all the extra shipping, management and tracking costs that go into shipping products out to these small businesses, it would make sense that it would cost them a bit more for the product.

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