Target And Walmart Are The New Music Tastemakers

“Music critics” probably think they’re the music tastemakers of today, but whoops, they’re not. Who is? Target. Wamart. Best Buy. From the WSJ:

In past decades, deejays and music critics helped shape musical trends. Today, many music industry executives agree, the big boxes have become the new tastemakers. Even as compact disc sales fall, their choices dictate which CDs are widely available on store shelves across the U.S. Big boxes are the industry’s biggest distribution channel — and the rock, hip-hop, jazz and classical music titles they choose not to carry face drastically reduced chances of reaching mass audiences.

Thanks largely to aggressive pricing and advertising, big-box chains are now responsible in the U.S. for at least 65% of music sales (including online and physical recordings), according to estimates by distribution executives, up from 20% a decade ago. Where a store that depends on CDs for the bulk of its sales needs a profit margin of around 30%, big chains get by making just 14% on music, say label executives who handle distribution. One of these executives describes the shift as “a tidal wave.”

CDs with “objectionable” content are often excluded from the tame big box retailers—to the detriment of their sales. Walmart’s refusal to carry any album with a parent advisory sticker causes many labels to create sanitized versions of albums for sale in chain stores.

And, even as the stores control more of the market, they’re beginning to deemphasize CDs because they’re just not selling like they used to. Best Buy’s senior vice president for entertainment, Gary Arnold, told the WSJ:

“Certain businesses are starting to flourish at the expense of others,” says Mr. Arnold. “Right now the hottest categories in entertainment are gaming and the movie business.”

“Music has become a commoditized item,” he says. “The CD is perceived by the consumer to be a $10 item, and the manufacturers continue to release new titles at $15 to $18.98.”

In a store like Best Buy, music functions mainly as a way to entice customers into buying computers and stereos. —MEGHANN MARCO

Can Music Survive Inside the Big Box? [WSJ]
(Photo:Clean Walmart)

Comments

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  1. winnabago says:

    “Music has become a commoditized item,” he says. “The CD is perceived by the consumer to be a $10 item, and the manufacturers continue to release new titles at $15 to $18.98.”

    Duh, someone has to pay seed money for lawsuits against students. The difference between $10 and 18.98 should just about cover it.

  2. mantari says:

    I am pretty much fine with this. They need to stock what they can determine are the most popular items (in order to get sales volume), but at the same time, they need to choose stock that won’t reflect badly on them.

    I think the bottom line to the story is, very large retailers have an influence on society as a whole. And not just in music.

    As long as I can follow the long tail and get anything else that I want at a specialty shop, or online, I am fine with the current selection at Wal-Mart.

  3. MonkeyMonk says:

    Couldn’t someone make an argument that this shift of music being predominantly distributed by big box stores correlates directly to the overall decline of CD sales?

    Store like Walmart might sell more CDs but by forcing smaller record stores out of the equation – the whole process has suffered.

    The fact the RIAA and Walmart mostly try to push complete crap might have some effect as well.

  4. mac-phisto says:

    hmm. that would explain the significant drop in quality of mainstream music.

  5. l951b951 says:

    And remember, piracy is the reason CD sales are down, not oversupply of crappy albums.

  6. mopar_man says:

    @l951b951:

    I was just going to make that point. And how many of the artists today are going to be remembered as being great in 30 years time? I bet very very few, if any. There just isn’t any mainstream talent like there used to be. There is plenty of non-mainstream talent but that takes some work to find and not everybody will know who they are.

  7. latemodel says:

    I thought radio airplay, a commodity bought by the record companies, controlled the demand for mainstream music.

  8. wikkit says:

    This is really depressing.

    I know that taste is subjective, but the bulk of this music is awful. I feel like the majority of people don’t know and/or can’t be bothered that there is better music and better artists out there waiting in the wings. Are we really such a bunch of lemmings that we only purchase the music that MTV, ClearChannel, et cetera rams down our throats?

    In my optimistic/utopian view of the future, music is directly distributed by the artist, and internet radio stations connect consumers to new independent artists. If there is no physical media (id est CDs) to manufacture and distribute, and no terrestrial radio stations to bribe into giving an artist airtime, what is the function of the record label?

    To me this is bigger than the RIAA. This is about consumers’ interest in variety and quality.

  9. sweetlyvicious says:

    The WSJ’s article is right – I can’t imagine paying more than $10 a pop. Even when Tower Records was having its fire sale a lot of the music was in the $15-25 range. It’s easier than ever to gank newly released songs/albums on the net. Who the heck thinks CDs at those prices are still feasible?

    However, as other commenters have noted a lot of the music available in the big box retailers are crap. You never know though – I bought the new Muse album at Target for $7.98. Man, was I chuffed about that find.

  10. mathew says:

    I’ve been saying for years that the problem is the price of CDs. Back around 2004, the owner of Tower Records posted a lengthy letter about the death of the music industry. I sent him a reply saying that I could easily name 10 CDs that I’d buy the next day if they were $10.

    A while later, Mute Records had a massive sale at their mail order division. A lot of their back catalog was $10 or less. I sent in an order for over $100.

    Same is still true. I mostly scour Amazon marketplace and wait until CDs drop below $10.

  11. JohnMc says:

    I have to agree with Matthew. Most CD release are barely worth the $10. Being a older buyer my tastes aren’t for hiphop. So when I look for a replacement album these days I go for a ‘Greatest Hits’ compliation album.

    But I have another bone to pick. I think it Popken in the last 48hrs released an article that big box stores like WalMart put the squeeze on profits by the merchants. Well what a reveleation! If you couple that article with the facts in this article do you not have a trifecta occuring? Distribution contol by the Targets/WalMarts/Fry’s while at the same time squeezing margins in addtion to bad product? Could it that the woes we hear from the record label Suits is based on decisons they made in their own product distributions?

    And if that is the case then I have no sympathy for them. They made their bed.

    Popken, dude, you need to cross check this. This could be a smoking gun that puts to rest the BS that the RIAA cranks out.

  12. Meg Marco says:

    @JohnMc: Hi, my name is Meghann. Not a bad idea though.

  13. Lars says:

    This hits at what the RIAA constantly wants to ignore. The Best Buy corporado says it quite plainly that videogames and movies are where it’s at. Selection and quality is killing the music business more than piracy. I don’t downplay piracy, but the RIAAs aggresive tactics are souring a whole generation of kids on the music industry as a whole. Not the best way to go if you want to stop the slide and heavens, even increase sales. But instead we get lawsuits against univeristies and the fee hikes that will kill off internet radio.

  14. bambino says:

    I always get a chuckle when meghann re-introduces herself for the nth time.

  15. larry_y says:

    Um, who actually wants to buy whole CDs/albums anymore? Anyway, it’s mostly iTunes and Amazon for me as the big box stores fail in price, convenience and selection.

  16. Meg Marco says:

    @bambino: I try not to take it personally, but sometimes it hurts a little deep down inside.

  17. magic8ball says:

    WalMart is forced to get by with “just” a 14% margin on music?? Wow, times are sure tough for the big box retailers these days. That’s just sad. Maybe we should take up a collection to help out.

  18. Trai_Dep says:

    @JohnMc: “Could it that the woes we hear from the record label Suits is based on decisons they made in their own product distributions?”

    Yup. Paired with the music industry’s nuking of sampling choices available to the public. Radio’s been allowed to wither thru consolidation. RIAA’s trying their damndest to destroy ‘net radio thru insane increase in playing fees. College radio is no longer accorded promo dollars. Exactly HOW are music fans supposed to find kewl tracks that sing (heh – sorry) to them? They can’t. So they don’t buy.

    The industry relies on American Idol, Wal-Mart and Target to showcase new music. No wonder crap gets 85% of the exposure and no one buys at any price.

    Thank the gods for P2P sharing – the only distribution and promo vehicle that the music industry can’t touch. It’s the only one that serves music fans. Too bad the industry leaves only piracy-friendly channels as viable ones for music fans.

  19. smackswell says:

    Codswallop.

    Everyone’s takes their listening advice from the hipsters at idolator.

  20. orchid777 says:

    Not surprising. Used to be a fairly decent variety of music on the radio – now FM radio is practically unlistenable. A lot of good music is out there, but it’s basically spread through word of mouth. Seems like we’re in the middle of a paradigm shift in the music industry. I hope that the artists win.

  21. mantari says:

    Screw the artists! I hope the listeners win.

  22. pestie says:

    I just realized my XM Radio subscription costs me approximately one CD ($14.95, I think) per month. And I get a whole lot more music for my money that way.

  23. Nick says:

    Maybe I missed something, but what’s so special about music? It’s the same story with most of the products that Wal-Mart chooses to sell or not sell, be it Rubbermaid containers, socks, whatever.

    More importantly, is this really a revolutionary or new idea? People prefer to pay less, duh! Not that I ever buy CDs, but if I did of course I would first look at Wal-Mart and Amazon.com. Why would I ever pay $10+ extra to get the exact same item? That overpriced CD from Tower Records is going to sound just as crappy, so price is the only factor. Maybe this is just me, but I definitely don’t feel bad when I save money on things that I buy! Media Play went bust a while ago and I don’t feel sad in the least. Even if I had put them out of business single-handedly I wouldn’t feel any remorse. Not that I have anything against Media Play, but I am never going to shop there to buy the exact same items I can get at another store for at least $10 cheaper. If Media Play, Tower Records, FYE, etc. are just going to sell the same things I can find at Wal-Mart, let them die! Good riddance!

  24. unamericanvalues says:

    The music industry, I’m sorry to say has taken a turn for the worse, I mean there really isn’t talent now a days like there was way back in the 70’s. Like another commenter said there really are no artists that will be remembered in 30 years currently. CD’s are also way overpriced, why on earth would I want to buy a CD when I can just get the song off the internet, we also now have the RIAA (ick) suing children for no reason, and now Wal-Mart besides looking at my vacation photos is now dictating what artists will go mainstream, and also what music (me) the consumer will be able to get my hands on.

    This really is just sad and pathetic,”when you think about it”.

  25. lestat730 says:

    This doesn’t surprise me although I’ve never really purchased music the way big box stores and record labels want me to. Personally I can’t stand the radio since I can never find a station that plays more then 1 or 2 songs I actually like per hour, and then theres all the mind numbing commercials. Personally I picked up most of my music tastes by word of mouth from friends, and first hand during car rides with friends. Maybe I’m just getting older but I fail to see the value in the majority of the music on MTV and on box displays.

  26. Skylar says:

    @nick2588: FYE has a lot more variety than Walmart does. You have to pay extra, but in an area like mine it’s the only alternative to buying the album online. I don’t know what crap you listen to that you can find at Walmart, but I consider Walmart’s selection to be so limited that I don’t even bother looking there anymore.

  27. Drop0ut says:

    I’m like Matthew. I wait until Amazon drops the price on a cd to $10 or less and then buy it from them.

    I’ve recently cut back on my music spending, but I dropped a small fortune at http://www.yourmusic.com last year.

  28. orchid777 says:

    @mantari:

    i mean the real artists, mantari, not the britneys. screw them.