I've always thought music was too expensive at $12.99, and utterly outrageous at $18.99 (where most of the weird stuff I buy is). Which is why I have a killer stereo system but haven't bought new music for it in, what, something like 15 years now. $10.00 is more my speed, $8.00 would be even better. Well, guess what, I have a powerful friend on my side now:
Along with other giant retailers such as Best Buy and Target, Wal-Mart willingly loses money selling CDs for less than $10 (they buy most hit CDs from distributors for around $12) ... Wal-Mart is tired of losing money on cheap CDs. It wants to keep selling them for less than $10 -- $9.72, to be exact -- but it wants the record industry to lower the prices at which it purchases them ... According to music-industry sources, Wal-Mart executives hinted that they could reduce Wal-Mart's CD stock and replace it with more lucrative DVDs and video games [if the labels did not comply].
The article's full of a lot of whining and crying about how terrible it is to do business with Wal Mart, that they're mean and don't care about profit margins and will squeeze you for every half cent you have. Which is all completely true, but there's a reason:
"The labels price things based on what they believe they can get -- a pricing philosophy a lot of industries have," [Gary Severson, Wal-Mart's senior vice president and general merchandise manager in charge of the chain's entertainment section] says. "But we like to price things as cheaply as we possibly can, rather than charge as much as we can get. It's a big difference in philosophy, and we try to help other people see that."
Essentially, Wal Mart has figured out there's a price point out there when it comes to music. Large numbers of people (like me) will not pay even $13 for a CD, but will have no problem paying $9.72. Wal Mart wants to sell music to these people, and make money doing it. Record execs could care less. They’re already making all the money they want. Well, as long as nobody challenges the RIAA lawsuits and the DMCA is never repealed, that is.
Unfortunately, what Wal Mart wants, Wal Mart gets, and so I expect to be visiting our local one soon. What keeps the label execs up nights is that once one retailer gets what they want, the others will demand it too. It's a slippery slope, and they're grabbing grass right now.
Oh there will definitely be a down side to it. Once Wal Mart and the rest force the industry into a $10 per disc model, all those tiny little bands so cherished on the edges of the market will disappear with a "pop". The music industry's business model is coming apart at the seams, and instead of innovating and finding a new one, the people at the top are using lawsuits to try and hold the line. It's not working, and when the shakeout comes, and as long as the markets are free it will come, it will be very, very ugly.
But only for a short while. People make music by and large because they love to make music. People listen to it because they love listening to it. The market's not going away, it's just changing. In spite of apocalyptic predictions, the demise of the current music market will not represent the destruction of western civilization as we know it. Yes, a lot of people will lose (are losing) their jobs, good people who just picked the wrong industry at the wrong time. But, contrary to industry propaganda, it won't result in "McMusic" (bland, boring, and bad for you).
Technology is making it possible for anyone to build a fantastic recording studio in their basement. With a little technical skill and a credit card or two, it's now possible for any artist to be their own record label. The Internet destroys distribution and advertising costs, and the rise of iMusic and its competitors drives down the cost (and therefore risk) to any new act that just wants to be heard. If someone ever figures out how to burn CDs on demand for $1 a disc, Wal Mart won't be carrying 5,000 titles, they'll be carrying 5 million.
To these people, these artists, these innovators, the labels are all roaring dinosaurs, dangerous, heavy, stupid, and vicious, serving only to impede and stymie them. Wal Mart's insistence on a profit-making $9.77 CD may in fact be the asteroid that finally smashes their dominance, heralding apocalypse and ruin. But when the smoke finally clears, we will not be left with sterile wilderness, we will instead be confronted by an explosion of creativity, a jungle of variety, with a diversity literally unthinkable to us today. It will be painful, but in the end it will be very, very good.