Rolling Stone: Walmart Wants $10 CDs

[hot_turkey_ed]

Source: Rolling Stone (http://www.rollingstone.com/news/story/6558540/walmart_wants_10_cds)

Rolling Stone is reporting on Walmart's efforts to lower the prices of CD and it's got the music industry a little scared.

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."

The article talks about what various price points mean to various size music shops. It also comments on Walmart's typical inventory: 5000 titles vs the 60,000 of a lot of music shops.

Lastly, check this out: 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

One has to wonder Walmart's role in the metal market. Hell, can you even FIND metal at Walmart?

[Div]

What's the matter, those greedy fucks wont be able to afford to trade in their private jets for the 09 models now? Are we supposed to feel sympathy for them or something because selling overpriced albums isnt working anymore. Atleast walmart is paying attention to what people are saying about CDs, places like FYE on the other hand will allow the record companies to drive them out of business. Here's how I see this anyway,


$0.17 Musicians' unions
$0.80 Packaging/manufacturing - most albums are a little lax in this area, lets see something else besides just a lame insert book
$0.82 Publishing royalties - this can be cut
$0.80 Retail profit
$0.90 Distribution
$1.60 Artists' royalties - they deserve more imo
$1.70 Label profit - label makes more than the artists who actually write the music? bullshit
$2.40 Marketing/promotion - useless, as ive never seen a metal album advertised anywhere
$2.91 Label overhead - even more money for them?
$3.89 Retail overhead - seems a bit high

[Firewind]

Heh, Wal-Mart and FYE are the two biggest reasons I resorted to downloading most of my music, and just seeing as many live shows as I can. Walmart has nothing good, and FYE has most things, at obscene prices...

[ChildrenofSodom]

cduniverse.com
half.com
ebay

[Maiden33]

One has to wonder Walmart's role in the metal market. Hell, can you even FIND metal at Walmart?

Nope. Not real metal in any real form anyway. In the past 4 years I've bought... 2 CDs there I think. Iced Earth - The Glorious Burden and Queensryche's Greatest Hits.

[sneakbobcat]

What's the matter, those greedy fucks wont be able to afford to trade in their private jets for the 09 models now? Are we supposed to feel sympathy for them or something because selling overpriced albums isnt working anymore. Atleast walmart is paying attention to what people are saying about CDs, places like FYE on the other hand will allow the record companies to drive them out of business. Here's how I see this anyway,


$0.17 Musicians' unions
$0.80 Packaging/manufacturing - most albums are a little lax in this area, lets see something else besides just a lame insert book
$0.82 Publishing royalties - this can be cut
$0.80 Retail profit
$0.90 Distribution
$1.60 Artists' royalties - they deserve more imo
$1.70 Label profit - label makes more than the artists who actually write the music? bullshit
$2.40 Marketing/promotion - useless, as ive never seen a metal album advertised anywhere
$2.91 Label overhead - even more money for them?
$3.89 Retail overhead - seems a bit high

The Label Overhead doesn't actually go to the label it goes towards the costs of the album i'd guess, like recording, and paying for other things the label pays for..
To see that the artist gets 10% surprises me.

[ravenheart]

No complaints about the label overhead. It's only fair they make back what they put in. I don't think their profit should be higher than the artist royalties though.

And I don't understand how the retail overhead of stocking a CD is so high either.

On the marketing/promotion front, that's not just advertising. That's interviews (travel to/from, phone calls etc), reviews (sending out CDs), in-stores/promo tours etc. Advertising's just a small part of it.