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Wal-Mart Squeezing Record Labels to Cut CD Prices
Raindance writes "RollingStone.com has a revealing article detailing how retail giant Wal-Mart is making loud noises about throwing its weight around in order to get significantly better bulk prices on CDs. Says one industry executive, 'This wasn't framed as a gentle negotiation, it's a line in the sand -- you don't do this, then the threat is [your product is dropped].' This is the first time a big player has attempted this sort of hardball move on the labels, and the labels may be forced to deal, as Wal-Mart sells 1 out of every 5 retail CDs. Monopoly one, meet monopoly two."
Tensions are not as high now as they were last winter, but making sure Wal-Mart is happy remains one of the music industry's major priorities.
How about making the customers happy? Personally, I can't believe that 1 out of 5 CDs are sold in Walmarts. I can't stand their stores. I absolutely DREAD entering one. They aren't clean, they aren't friendly after you pass the greeter, and they aren't someplace that I want to shop for music as it's just usually a mess and full of people.
Why not concentrate on making music available for less money somewhere that I might want to buy it instead of worrying about making sure Walmart is happy.
Virtually no industry executives would publicly comment about their company's relationship with Wal-Mart. But off the record, many record-industry executives shared their concerns. "I don't think there is a music supplier in America who really enjoys doing business with Wal-Mart," says one major-label rep.
Awww, are we supposed to feel sorry for them? Am I supposed to shed a tear from the corner of my drying eyes that they don't like something? Here's the river... Notice it's dry.
I don't like dealing with either company and I certainly don't think that Walmart is going to bat for the consumer. They are only doing this to make themselves richer. We aren't exactly benefiting by buying a $10 CD.
Wal-Mart is like no traditional record seller. Unlike a typical Tower store, which stocks 60,000 titles, an average Wal-Mart carries about 5,000 CDs. That leaves little room on the shelf for developing artists or independent labels.
I was at Walmart recently buying something I couldn't find at Target. I happened to stop into the electronics section while my fiancé did some shopping elsewhere. Perhaps I wasn't looking in the right spots but I wasn't finding anything by developing and independent artists. If anything it was most older music that wasn't exactly getting radio play. I saw the typical teenybopper crap but nothing that I would consider new and exciting.
"When you're buying CDs for twelve dollars and selling them for ten like Wal-Mart, it makes the rest of us look like we're gouging the customer, when we're not," says Don Van Cleave, head of the Coalition for Independent Music Stores, a retail consortium. "It's supertough to compete with that price point."
Most independent stores I have gone to shop for music in are charing $16+ for a CD. If you're buying it for $12 and making $4+ a CD I seriously believe that you are gouging us. I don't feel bad for you.
"They proposed it to a bunch of artists and managers, but everyone was worried that we are sending a message that instead of the sixteen-track album we sold, those nine extra songs were filler," says a label executive.
You sent the message when we bought your shit music for $16+ and found that 14 of the songs were filler. Walmart didn't help to spread that message... Your crappy albums did.
...treat others as you would like to be treated. Enjoy the seed you sowed RIAA (and members)!
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If WalMart doesn't stock an extremely wide range of music, it will not be taken seriously as a place to get music. To be honest, I'm surprised it is taken seriously at all anyway, given the fact the music it sells tends to be the bleeped versions anyway.
You are not alone. This is not normal. None of this is normal.
The anti-corporate crowd hates Wal-Mart so much, they can't see this as good. The $10 price point (Reminds me of good old Discord Records) works for me. Who cares how we get it. I don't shop at wal-mart, but I expect this price pressure to affect others. $10 leaves more than enough for profit. It takes a bully to bully a bully.
I really dont think you could label Walmart as a monopoly by any stretch of the word. THere are plenty of competing businesses, Walmart is jsut the biggest.
Nothing like having to take it as well as dish it out.
Ironically, if they give in and sell cheaper it will probably result in MORE money for all involved, since people will be able to buy more CDs without feeling quite so ill at the prices.
Can't say I'm real happy about Walmart having so much power though. Frankly I don't trust any business with so much power. But I will say I'm inclined to worry about Clear Channel more than Walmart, since for most of Walmart's products the barrior to entry in the market isn't unthinkably high.
"I object to doing things that computers can do." -- Olin Shivers, lispers.org
If you're buying it for $12 and making $4+ a CD I seriously believe that you are gouging us.
Making a profit on a 33% mark-up is gouging? Sheesh, I had no idea that CDs should be sold for one penny more than they were purchased.
I can't stand [Walmart]. I absolutely DREAD entering one. They aren't clean, they aren't friendly after you pass the greeter, and they aren't someplace that I want to shop for music as it's just usually a mess and full of people.
I think it depends on where you're at. Most of the Walmarts I use are Super-Walmarts in Wisconsin. They are always clean, pretty friendly, and very spacious. Yet when I was on vacation in St. Louis, I was in a normal sized Walmart that was at least 10 times over capacity. They were in serious need of a store upgrade and a few extra stores in the area.
So you may find that different people have different experiences with going into Walmarts. Big city people will probably hate them (lots of negativity toward them here in Chicago) while the less populated areas will love them.
Javascript + Nintendo DSi = DSiCade
Sorry. 1 in 5 is not a monopoly at all. A major player, obviously, but not a monopoly. Walmart has been doing this type of price squeezing on suppliers for years. It's how they got where they are. If the major labels didn't see this coming, they're pretty foolish.
That's 20% of all CD sales. Wal-Mart is a monopoly for very different reasons (i.e. killing off all competition in rural and suburban communities).
Sigh... here we go:
...and who made you buy the CD? If you don't like the price, don't buy it. No one has a gun to your head, and you certainly don't need a CD to survive.
How about making the customers happy? Personally, I can't believe that 1 out of 5 CDs are sold in Walmarts. I can't stand their stores. I absolutely DREAD entering one. They aren't clean, they aren't friendly after you pass the greeter, and they aren't someplace that I want to shop for music as it's just usually a mess and full of people.
Making the customer happy? Wal-Mart is their customer. You would be Wal-Mart's customer.
And if you don't like Wal-Mart, don't shop there. Your personal experience isn't exactly scientific proof that Wal-Mart sucks, there are plenty of people (myself included) that shop there because the employees on the whole are friendly and because their prices are incredible.
Why not concentrate on making music available for less money somewhere that I might want to buy it instead of worrying about making sure Walmart is happy.
Because they have a responsibility as a company to maximize their profits. So does Wal-Mart. Why should they make it available for less money if they can charge more and you'll still pay for it? Do you know anything about business?
I was at Walmart recently buying something I couldn't find at Target. I happened to stop into the electronics section while my fiancé did some shopping elsewhere. Perhaps I wasn't looking in the right spots but I wasn't finding anything by developing and independent artists. If anything it was most older music that wasn't exactly getting radio play. I saw the typical teenybopper crap but nothing that I would consider new and exciting.
Do you ever consider anyone else's point of view? Reading through all of your comments, all I see is that they are all super-biased and don't actually involve any rational thought. You are a selfish, elitist prick. Just because you don't like the music being sold at Wal-Mart doesn't mean that it sucks. There are plenty of people buying those discs (or Wal-Mart wouldn't stock them!), so maybe you should think about that for a minute.
Most independent stores I have gone to shop for music in are charing $16+ for a CD. If you're buying it for $12 and making $4+ a CD I seriously believe that you are gouging us. I don't feel bad for you.
evil adrian
Most independent stores I have gone to shop for music in are charing $16+ for a CD. If you're buying it for $12 and making $4+ a CD I seriously believe that you are gouging us.
Do you honestly think that a mom and pop record store is buying discs in the same volume at the same price as the largest retail juggernaut in the history of this planet?
Where does the school board find them and why do they keep sending them to ME?
This is a good example of why capitalism does work.
Maybe it's a little tougher to do this to Microsoft, at least right now. If the record industry held strong, WalMart could stand by their threat, drop all CD sales completely, and still be THE retailer in the US.
However, if say, Dell, tried to pull this with MS, they would lose enormous sales and have very few other products with which to sustain themselves.
"He hated Mexicans, and he was half Mexican. AND he hated irony!"
Come on guys. I know most of you hate Wal-Mart. But this article isn't about how they pay low salaries, make employees work overtime or whatever your complaints are.
Let's for once be glad a move was made in the direction we want. Even if it's WalMart. If this works out, and WalMart isn't all too greedy to keep all the aditional profit to themselves, well, then prices should go down to the end customer.
I for one would like that.
Monopoly one, meet monopoly two.
You are completely misusing the word. Walmart is a leader in the incredibly competative retail sector. They got that way by being maniacly efficient and offering low prices on goods people need. They compete with other strong retailers (Target, Sears, Home Depot ...) everyday
to the benefit of everyone. To make money they require
volume. To create volume Walmart
must offer low prices. The RIAA is under
the same market pressures as any other Walmart
supplier.
an ill wind that blows no good
If Walmart wins will that pass the savings on to the consumer or do something for their horribly treated workers like give them health care?
Probably neither, why should we care.
Just two big behemoths fighting over a scrap of plunder
Reading through all of your comments, all I see is that they are all super-biased and don't actually involve any rational thought. You are a selfish, elitist prick.
No offense, but having a strong opinion is not a crime. You're certainly not going to change that opinion by throwing around insults, either. The guy may have his problems (or he may not, I don't know), but intelligent discourse is a much better way of getting him to change his mind. For all you know he may be a very intelligent person who you would often agree with, or at least enjoy debating with.
Sorry to interrupt, carry on.
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I just thought I'd tack something onto that post--a bit of math in case you don't understand my point. Purchasing 60,000 CDs at one unit each is $720,000. If you expect a store to shell out enough to carry ten each of those most-popular 5,000 CDs and still carry one each of the rest, you're talking $1,260,000. At EACH store branch! Up front, with no chance of recouping most of them, offering that variety for you as a customer so you can have what you clearly desire: choice!
Assuming they want to stock enough to not lose sales to the store-next-door if they sell one of those 55,000 albums of which they only stock one, they need to tack on another $660,000 in stock. If you were to go try and borrow that kind of money, it'd cost you all your profits just to pay the interest!
I seriously cannot believe you fault indie-er record stores for charging what they charge, man. It's really, really pathetic.
Read jack phelps dot net
I can't believe that 1 out of 5 CDs are sold in Walmarts.
I saw the typical teenybopper crap but nothing that I would consider new and exciting.
This is the same demographic that made Titanic the box office "phenom" that it was.
I wasn't finding anything by developing and independent artists
I don't think the masses of America buy stuff by developing and inde artists. So I can see how 1 in 5 are sold at walmart.
see your quote below to reinforce that many people buy music from walmart.
it's just usually a mess and full of people.
500 dollar reward for tip(s) leading to the arrest of the person(s) who stole my sig.
Tell that to Walmart's competitors.
I'm still not buying any more RIAA CDs, Walmart or elsewhere.
Me too. I listen to internet radio and look for nice mixes around the web and all of them are indy. I could care less about the RIAA. They are goons. The RIAA operates like Jimmy Hoffa's Teamsters once did; oppression by coercion. The Teamsters took a beneficial idea (a trade union) and turned it into a money grubbing business front for organized crime. It's the same thing the RIAA has done with music, perhaps without the organized crime, but you never know. Music used to be free, but then the Metallica bands came along with their business plans. Metallica are sellouts. Who wants to put more cash in their pockets? I would much rather support a starving artist with new ideas.
The dangers of knowledge trigger emotional distress in human beings.
"Paying fifteen dollars for a piece of music is a difficult value equation for customers."
WOW! Is it ever. Apparently Walmart marketers understand the music biz better than the music biz people.
At Wal-Mart, we're a commodity and have to fight for shelf space like Colgate fights for shelf space."
Which is why people go to walmart. Walmart is like a commodity store. Are we going to sell the new Eminem CD based on the "Intrinsic Value" of the liner notes or the number of hits on the CD?
Then the article says:
Unlike a typical Tower store, which stocks 60,000 titles, an average Wal-Mart carries about 5,000 CDs.
and then
. "When you're buying CDs for twelve dollars and selling them for ten like Wal-Mart, it makes the rest of us look like we're gouging the customer, when we're not," says Don Van Cleave, head of the Coalition for Independent Music Stores, a retail consortium. "It's supertough to compete with that price point."
Well, Don Van Cleave, there you go! Your message to consumers needs to be, your prices are higher, but they have to be because you carry a much larger inventory and your large selection is a service your store is providing. Have tastes that go beyond the top of the charts? Well guess what, your music is in our store, and for the selection we have our price while still not the best, they are very fair. Now you're not selling a commodity. You are selling a service. You are selling expertise that perhaps your music staff has. But instead, you people try to do the same thing - push the hits.
My girlfriend took a temporary position at a cocunuts store here in town. And let me tell you, they don't get the sell based on value thing. They push the hits, hits, hits. The kind of CDs you will listen to for a month or two and then forget. How is that kind of CD worth $15? It's not. She has pretty diverse tastes, and has broken "company code" by playing other "non-corporate approved" kinds of music,a nd has had a lot of sucess selling it. She figures every time she plays something, even if it's old, she has 5 or 6 people that ask "What is this?It's interesting". And a lot of them buy it. Now imagine what could happen if the whole store's marketing was geared that way. You could sell a good amount of that older or lesser known stuff, for a higher price. And you could still take the hits, and trim the price way down, as a loss leader, to get people in the first place. Maybe you can't go sub-cost like walmart, but you can get down close.
Kudos to Walmart for beating the record industries margins down. As long as they only stock 5000 cds in each store, independent retailers should have no worries if they figure out how to position themselves correctly. The beauty of this is it could also force the record companies to sell to distributors and record stores for a lower price, actually helping the smaller guys.
Easy guys, I put my pants on one leg at a time. The difference is after I put on my pants I make gold records!
Monopoly has a lot of definitions, not all of which apply in all cases. Walmart often has a monopoly in a market area. They drive out the Mom & Pop businesses in small towns, removing any competition. In the area I live, central NJ, there are enough people that they their tactics aren't completely effective. But small towns, isolated from larger metropolitan areas, are areas that they have certainly been able to gain a monopoly.
"Glory is fleeting, but obscurity is forever." --Napoleon Bonaparte
Having dealt with Wal-Mart as a supplier, I can say that they definitely DO have leverage that seemingly can't be fought. Basically, they are the 800 pound gorilla that calls the shots. Don't like it? Then they won't carry the product.
From a CD-purchasing-consumer's perspective, this may sound great, but my problem with this is that it is easy to get caught up in anti-music industry sentiments while overlooking the fact that Wal-Mart can do this in just about any other industry too. Don't like the price of tires? Just threaten to drop the product. Don't like the price of milk? Just threaten to drop the product. Never mind that the price is already competitive with other, smaller businesses that don't have the leverage to "force" lower prices.
My mom always said, "Jim, you're 1 in a million." Given the current population, there are 7000 of me. God help us all!
Why not concentrate on making music available for less money somewhere that I might want to buy it instead of worrying about making sure Walmart is happy.
While much of what you say about the stores are true, you should feel sorry for the folks trapped working there. I've worked at one, appalling is about the only word that comes close to describing how management treats employees. Many of the people there can't find other work, or Wal-mart pays more than anything else they can find. Wal-mart knows this and abuses it. I fully expect there to be lots more class-action lawsuits against the company in the near future, even with current ones they're getting worse if anything.
But the 1 in 5 figure is quite believable. While Wal-mart might not have as large a selection, their core customer base isn't looking for one. The CDs sell like proverbial hotcakes at even smaller Wal-marts, bigger ones move so many it's scary. Around here (Tennessee) there are very few chain record stores left. Of the two malls in the closest large city to me, there's one record store apiece. There are a few small retailers, but the biggest of those is a local used-CD chain (two locations).
On this one you're both right and wrong. Wal-mart is indeed wanting to make more money, but their entire business plan is to buy low and pass along the savings, keeping profit margins lower and making up their money by selling tons of the stuff. Anything Wal-mart can get cheaper will benefit consumers because then the consumers will get it cheaper. Granted Wal-mart's not doing it because they're some grand benefactor, but the end result helps consumers a bit. Actually I suspect that Wal-mart is pushing for this because the overwhelming consensus of their customers is that the CDs cost too much, even at Wal-mart's prices. (I worked in Electronics, you hear this constantly, although people still buy.)
I was at Walmart recently buying something I couldn't find at Target. I happened to stop into the electronics section while my fiancé did some shopping elsewhere. Perhaps I wasn't looking in the right spots but I wasn't finding anything by developing and independent artists. If anything it was most older music that wasn't exactly getting radio play. I saw the typical teenybopper crap but nothing that I would consider new and exciting.
Umm, did you not read the sentence you posted? It said it left little room, which is exactly what you found to be true. Wal-mart's not big on new and exciting though, they're big on selling decent stuff cheap and lots of it. Independent artists and developing artists don't fit that so it's no surprise they're absent.
It is interesting to note that Wal-mart doesn't handle the merchandising of the CDs itself, they hire a company that does it, so I'm not sure how much direct control Wal-mart has over exactly what is on the racks.
While it's hard to understand t
Well like I always said, if they squeeze you too much don't sell to them and stop whining. If you see to your biggest customer but don't make money by doing so then don't sell to them and let other people stranbgle themselves. The suppliers who see their company over-exploited because of that maybe took this business decision with a lot of ego and a too little thought.
This is totally insecure, but very convenient.
After college I worked at a great independent bookstore for about 3 1/2 years, just at Burns Ignoble (Barnes & Noble) was starting to drop store everywhere.
More than once UPS, USPS, etc dropped off the wrong box in the shipping room, intended for B&N, we'd be opening boxes quickly usually and didn't always notice until we looked at the invoice. The discount a place like B&N gets over the independent is significant, like 8-12% more. This is a similiar situation with record stores.
When you're running close margins to begin with and your comptetitor is getting stock for 8-12% less than you, THAT's huge, and it's d*mn hard to compete. Sadly, that bookstore, after 45 years in business, closed this summer.
Also before you complain about costs, think about what independent media places (records & books) tend to offer; people who love their product, are knowledgeable about it, and MOST importantly, they support small presses/publishers/labels than the uber stores won't touch (including Target by the way, not just Wal-mart)
As independent record and book stored closes, so do the many small presses & labels. The store I worked at bought some great books from indie pubs, many of those are now out of business since Target, Wal-Mart and the like won't even talk to them. Those books are no longer available and those people lost their jobs.
Seriously, thing hard about where you buy things. Yes, I understand $2-3 more is a lot to some people, however, you are ultimately reducing your the choices and varieties of the music you hear and books you read. Sometimes being a consumer involves more than just the price of an item.
My 2 cents
'The unexamined life is not worth living' - Socrates
Hello Mr Pot, I'm Mr Kettle. By the way, I couldn't help noticing that you're black...
Telling people that anyone who disagrees with you and attacks you is a troll after you post a comment full of attacks - attacks on the record industry, attacks on Wal-Mart, attacks on its staff, attacks on people who buy the music that it stocks, attacks on independent music stores - is a bit rich.
Let moderators decide for themselves how the comment should be moderated. If I've noticed anything in six plus years of reading Slashdot it's that people with mod points aren't shy of moderating down even the slightest personal insult.
In the meantime though, I suggest you learn to appreciate a few things, including the fact that Wal-Mart does just fine selling CDs you don't want to buy, that other people have different tastes to you and that's not a crime, and that independent stores sell CDs for $16 because that's what they need to do to survive.
"Accept that some days you are the pigeon, and some days you are the statue." - David Brent, Wernham Hogg
>> I'm still not buying any more RIAA CDs, Walmart or elsewhere.
Of course, you realize that's "stealing" (by the RIAA's) definition. They have a right to your money, and by denying them your hard-earned cash you're just plain evil.
Now if the RIAA were intellectually honest (stop laughing, I'm trying to make a point) they would revise their annual "loss due to piracy" (e.g. "we lost 3 billion dollars to internet pirates this year...) statements downwards due to the lower retail costs. Of course, that wouldn't suit their agenda so don't hold your breath waiting for it to happen.
You may resume laughing, now.
To do business with Wal-Mart is to invite death."
I think I saw it in a Wall Street Journal article at some point...
The World Wide Web is dying. Soon, we shall have only the Internet.
These numbers are interesting in many respects. First the artist royalties seem awfully high. Are these assuming the top artists that are selling millions of albums? Marketing and promotion. . . Where does this go? Sure I see posters up at record stores, and they supply cds for free to radio stations etc, and producing music videos that are grossly overpriced and never played (at least I've never seen music videos played on MTV anymore). But even then thats not that much. Not enough to justify that sort of price overhead.
Then we get to the root of the problem. Walmart sells only the top 5000 cds or so. Seems logical enough for them. They ask the question of why the top 5000 cds are costing as much as the less popular cds. Its a valid question. Most every other product sold comes with volume discounts. Shouldn't the overhead for a cd be far less when you're selling 20 million copies of an album? Wouldn't that justify a smaller price?
Then of course we get indie record labels who are selling maybe 20,000 albums selling them to retailers for $10 a piece. Somehow without all the savings accrued by selling tens of millions of albums they're able to make the product cheaper. Its all highly entertaining.
My theory behind it all goes if Walmart pushes to lower prices why not. Hit the industry where it counts and prevent them from gouging the customers. The industry needs walmart. A lot of people buy their cds there because (surprise surprise) they're cheap. Many of these people are willing to pay $10 or $12 for a cd, but when asked to pay $16 they might say "nah, I'll just download it for free".
So the "evil" walmart corporation (whom does more good for this country then most every other group in the nation combined like it or not) is simply fighting to lower prices for the rest of us. Regardless of what you think of the store, they offer many of the same products for far less then other stores. Sure some stores go out of business because of them, but why should I care? As long as I can still buy stuff cheaply I'm happy.
Phil
OK, everyone, read the parent post where it says:
They pull in over $60 BILLION dollars per quarter and $2 billion of that is PROFIT
Now, while 2 billion bucks is a load of cash, 58 billion was spent in search of it. That's a margin of only 3.3%. It is NOT a profit of 33% as a post farther up claims with the illustration of a $12 CD being sold at $16. Walmart makes all of its money on razor thin margins. Yes, 3.3% is razor thin. Compare to, say, Intel, who pulls in a whopping 22.7% profit margin. Now THAT'S a huge margin of profit. Not Walmart and their piddly 3.3%, nevermind how many billions that 3.3% adds up to. Say what you want about the monolithic nature of Walmart and their heavy handed tactics with supplies but you cannot knock it on gouging or otherwise extraordinary profits.
That is the most loaded piece of crap I've ever read - where's the troll mkoderation when you need it.
LARGE retailers and LARGE corporations ARE NOT the same as a discount store.
The comparison here is Macy's workers vs Walmart Workers. Get real!
A Walmart job is very easy.
Your per hour wage is almost 40% higher than minimum wage. Are you saying you want to pay a cashier you rolls items on a conveyor belt, wears a blue apron, and says have a nice day $15???
Get real!
It makes perfect sense. They only carry the items that are pushed by radio/tv/etc that they know are going to sell. Why the hell would they carry 15 copies of Album X by Unknown Band Y if they're just trying to make money?
Meanwhile RIAA would still sell CDs to other retailers at current prices.
This can NOT be viewed as a good thing. If Walmart gets what they want, the independent record store will dissappear everywhere where Walmart is. They simply won't be able to compete, their revenues will continue to drop until they go out of business.
And since Walmart is well known for exercising "editorial control" over goods sold at Walmart, you will no longer be able to buy any records with explicit lyrics or controversial topics. Certain types of music will simply dissappear or become even more expensive in areas where Walmart dominates.
Welcome to Fahrenheit 451 21st century style.
In Soviet Russia, I ruled you
I don't like Wal-Mart's "kill the little retailer and the supplier" attitude, so I don't shop there.
I don't like the RIAA's CD pricing and 'CD copyprotection' methods so I buy exclusively from iTunes Music Store or I download it from Limewire if iTunes doesn't carry it.
You hold the power, it is in your wallet.
I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.
That $15.99 quoted is 8.90 GBP according to XE.com's converter. Clearly our CDs are better quality than yours? No?
That $9.72 quoted as Wal-mart's price equals 5.41 GBP. At that price I for one would be buying lots of CDs, but all you can get for that price in the UK is the broken stuff in the remainder bin.
Differential pricing and price pointing are the scourge of modern retailing. I'd love to see Asda (UK arm of Wal-mart) take on the BPI in this way, but I fear it would have consequences for the independent record stores that still exist, not to mention the second-hand record stores.
When I think of the music industry these days I think of King Canute (that one who thought he could hold back the sea by just sticking out his hand and shouting stop).
He got wet.
In the end, the small towns are screwed either way. With the "walmartification" of small towns, the main street stores are being run out of business. Even some large regional grocery stores are having a difficult time fighting the Super Walmart stores. The result is fewer store choices in a small town, generally low wages for employees, and most of the profit being pumped out of the state.
Now, without Walmart we'd probably have far more locally-owned mom-and-pop businesses in small towns. But there would be fewer product choices in each of these small stores. Also, due to the low volume purchased and sold by mom-and-pop, the prices would be higher. The winner is the supplier, who is probably out of state anyway. How many employees do these small stores have? Maybe a high school kid to stock shelves or deliver grocerys in the afternoons.
Walmart sucks, yes. But small town mom-and-pop stores aren't all that great either. Damned if you do, damned if you don't.
(This is why you never see those 'explicit lyrics warning' stickers at Wal Mart -- they just don't give you a choice and force their censorship on you without your knowledge or consent.)
Apparently, Wal-Mart is doing just fine with these CDs on their shelves. It seems that theer is a large enough market for these censored CDs that they turn a profit on them. That's all well and good.. but if you're not happy with it, don't shop there. Simple as that. Don't complain about a company because they do something you don't like. Voice your opinion by disposing of your cash reserves elsewhere.
What is your penile percentile?
Firstly, perhaps you didn't deserve to be called a prick but crying about it after you've done such an effective job denegrating so many others doesn't get you much sympathy. And, whatever you may think, your comment definitely had an element of elitism in it.
Secondly, it's interesting that you have no faith in the moderators (by the way, neither do I, when push comes to shove) but you feel comfortable practically telling them what to do. Here's a thought: don't cry about it (to the moderators or anyone else) because you threw the first punch.
Lastly, as other people have pointed out, 20 percent isn't a monopoly. It isn't even close to being a monopoly. If Wal-Mart really had a monopoly then those independent stores that you think are gouging you on price by making $4 a CD (and I'm not even sure it's that much), when they have higher costs and overheads to think about, as well as the online retailers that you do buy from, wouldn't exist.
And indie stores shouldn't deal with the RIAA? Gee, don't you think they have a hard time keeping their heads above water without turning away every other customer who wants to buy something from a RIAA-backed artist? Do you have any concept of how quickly all but a few very specialised indie stores would fold if they took that approach?
Taste has nothing to do with this discussion, huh? That's rich coming from someone who described the music that Wal-Mart does stock as "the typical teenybopper crap".
I'm not sure how you could come across worse, because right now, you come across as arrogant, hypocritical and plain old dumb. Your arguments hold little or no water because you fail to see that the world doesn't work the way that you want it to. I hate to disappoint you, but that isn't going to change any time soon.
"Accept that some days you are the pigeon, and some days you are the statue." - David Brent, Wernham Hogg
Wal-Mart has every right to decide what it will and will not sell, and to base that decision on whatever criteria it likes. Don't want to play with them? Don't sell at Wal-Mart. You don't own Wal-Mart; therefore, you're not entitled to sell your stuff on its shelves. It's an opportunity Wal-Mart can extend to your or not at its discretion.
"Other than that, Mrs. Lincoln, how was the play?"
The same should be true of businesses.
Isn't it more likely that those sales will occur elsewhere?
You are not alone. This is not normal. None of this is normal.
If WalMart doesn't stock an extremely wide range of music, it will not be taken seriously as a place to get music.
Have you ever lived near a Wal-Mart? It's NEVER stocked a wide range of music. It's never stocked a wide range of anything. It sells anyway because Wal-Mart (a) is everywhere, (b) is sells what's most popular, and (c) what it does sell, it sells cheaper than anyplace else, including Internet retailers.
Remember, the key word in "popular music" is "popular". So what if it's not a wide selection? If 95% of all shoppers save money on the 5% of all CDs Wal-Mart stocks, then thay will. The other 5% of all shoppers don't HAVE to take Wal-Mart seriously as a music store. Wal-Mart, in many non-urban parts of the US, is nearly the only place you can go to buy CDs anyhow, and if there is another music store in town it's vastly overpriced by comparison.
Don't think like a music connoisseur, think like a capitalist. The 95% that buys what's popular is all that matters to Wal-Mart's bottom line, and it's the same 95% that the record labels have built their entire industry around. If Wal-Marts across the country refuse to stock a label's new CDs, then those record companies lose a big chunk of their business. Certainly not enough to cripple them, but enough to hurt their quarterly sales. Wal-Mart has played this game of Chicken plenty of times before, and it's always the other guy that blinks.
When are /.ers going to realise: the purpose of commercial entities is not to spread knowledge of music, but to make profit.
There are two perfectly valid business strategies to do this:
Target a consumer segment that wants to buy a wide selection of music, which necessarily cannot be limited to the current top radioplay/chart list.
To do this, you have to hold a much higher level of stock. To do this profitably, you have to have a higher gross margin to maintain a livable net margin.
The trouble is, unless you can carry a truly huge stock and shift it very fast (Hello, Amazon), you won't be doing the volume to have the buying power with the distributors. Therefore you must add your higher margin to higher costs. Result: high consumer prices.
Target a consumer segment that only cares about what's in the charts/on the radio.
This is a much bigger segment, and it's a much smaller set of product. Therefore, you can be much more efficient with your supply chain processes, you'll need less real estate for shelving, and you'll shift more volume so can negotiate more robustly with suppliers. You can therefore offer lower prices and still make respectable net margin as your costs are so low.
Both of these strategies are viable, and are only somewhat competitive. You're a consumer who likes non-chart music, so do you go to WalMart to find it? No, of course not. The existence or otherwise of WalMart is entirely irrelevant to your music buying habits. You worry about all those teenagers who only go to WM only finding chart music? They shop where their needs are met - if they wanted anything else, they'd go elsewhere.
But I think the biggest trap you've fallen into is the High Fidelity one - mistaking selling CDs for loving music. If you're a retailer who does it because you love the music and don't have a profit motive, then you have a hobby, my friend, not a business.
Amazon are very smart about this. They explicitly do not target people who love *read* books, but those who love to *buy* them.
Wal-Mart don't care about the music. It's just business - they supply a need profitably to provide a maximised return to their owners. This isn't A Bad and Evil Thing: their owners (ie the stockholders) legally require them to behave like this.
And this is the case for pretty much everyone involved: The people who press the CDs, the people who design the covers, the people who ship the CDs, the people who provide catering to the studios - everyone. Even among professional musicians, the strongest desire of all is to be paid, or didn't you notice the existence of the Musician's Union...
The only thing you can accurately describe as "Scotch" is a sticky tape made by 3M. And it's
Don't complain about a company because they do something you don't like. Voice your opinion by disposing of your cash reserves elsewhere.
That's not quite right. Railing against the company on Slashdot isn't very useful, obviously, but companies like Wal-Mart spend millions on market research. Believe me, they will welcome free customer feedback. If you strongly disagree with something they do, write a letter to the corporate headquarters to tell them so. You should indeed vote with your wallet, but how are they going to know why they lost your business if you don't tell them?
I guess you aren't one of the people who miss the days when Levi's were the best jeans you could buy? Wal-Mart forced them to "cut the fat" so they would be able to offer the product at a reduced price every year. From jeans which could hold together while being pulled by two horses, to jeans no tougher than three ply tissues.
The consumer quest for rock bottom prices has also lead to rock bottom quality.
You don't mind that Wal-mart is essentially a sweat shop that pays below average wages? That they lower the standard of living in the neighbourhoods they are set up in? That it's up to the government or the spouces benefits package to make up the difference? You may save up front, but at what cost? Every consumer that shops there is contributing to the problem.
People get up in arms when workers are exploited overseas, but don't care when it happens to some extent in their own backyard as long as it saves them $0.50 on toiletpaper?
You're right, no one has to shop there if they don't want to. I don't like what Wal-Mart stands for; I think they lead to a social net loss. So I don't shop there. And I discourage others from doing so as well.
Man, this is insane.
If you don't like what they're selling at Wal-Mart, DO NOT BUY IT. If you don't like their pricing, DO NOT SHOP THERE. If you don't like their attitude, the color of the store, their stance on not carrying lesbian porn, DO NOT FREQUENT THEIR ESTABLISHMENT.
All I ever hear about Wal-Mart anymore is how damned evil they are and how the store sucks and their music is unfairly censored and blahblahblah. If it's so damned bad, why are they making money hand over fist?
Frankly, I love what they've done for supply chain management, I love how they slap their suppliers into line, their prices are incredible, watching white trash is funny as hell, and I don't buy music there because I want to hear Jay-Z say 'fuck.'
Anybody else actually have a problem with Wal-Mart they can express intelligently?
I think it depends on where you're at. Most of the Walmarts I use are Super-Walmarts in Wisconsin. They are always clean, pretty friendly, and very spacious. Yet when I was on vacation in St. Louis, I was in a normal sized Walmart that was at least 10 times over capacity. They were in serious need of a store upgrade and a few extra stores in the area.
So you may find that different people have different experiences with going into Walmarts. Big city people will probably hate them (lots of negativity toward them here in Chicago) while the less populated areas will love them.
It also has to do with the shoppers and employees. There are about at least 10 Wal-Marts here in CT, and of the ones I've been to, they all pretty much suck in terms of cleanliness and usablility. Granted, some of it is the employees (or lack of) being too busy stocking shelves/dealing with customers to do any clean up. It also doesn't help that the customers go through the stores - especially on Sundays - like a horde of locusts on a field of crops.
If I'm in a store and my kid knocks something over, one of us picks it up and puts it back. If I suddenly decide I don't need something, I either give it to the cashier and tell them or put it back - usually where it belongs. If I'm in the store with a cup of coffee and am finished, I throw it out - I don't just leave it on a shelf for someone to find 3 hours later.
Is it just me, or does a little common courtesy go a long way?
Computer geek for hire. Reasonable rates. Email me.
I know people who have told me similar stories, however I think this pattern is pretty well-known by now.
It never makes sense to put all your eggs in the same basket; never give a distributor that much power over you! You're only creating a weak negotiation position for yourself.
The article said that Walmart was tired of selling CDs for a loss, well no one forces them to do that, so I don't really see their point. However I do think that CDs are over-priced but that's a different issue.
While I don't agree with this practice, I am glad to see it getting turned on the record companies now, since they've been ripping me and other consumers off for years. Let the jackals tear each other to pieces...
If the recording industry sells their CDs for a lower price to Walmart this would most likely lead to lower prices in other stores as well, and that would be a good thing. It's hard to defend a high price point on a product once you start slashing your prices on it.
I ran a small independant record label. A store typically has 90 days to pay for the CD or return it to the distributer. Of course a small label doesn't get paid until the distributer does. Problem is that many (if not most) of the stores didn't pay *or* return our CDs. The distributer didn't really care because we were obviously one of the 55,000. The distributer was not about to offend a store over a few copies of a nobody when they hundreds of copies of the top 5000 (or 40, as it were) to sell. Running a "indie-er" record store is a tough job, and a labor of love for most owners (I know several), but your numbers are quite a bit off.
Maybe so. But they've also changed the marketplace so that lowest manufacturing cost is the only consideration for success. Consequently, they've created a gargantuan flood of imports that we've paid for with IOUs. Low inflation over the last 15 years has been bought on loan.
Since with current demographic trends we're never going to pay those IOUs off at current values, there's probably going to be a huge surge of inflation in the future while the government prints money to devalue our foreign debt. So really what WalMart is doing is just pushing the inevitable inflation into the future, where it's going to hit us all at once.
It's like they've handed us a credit card, and we as a nation have become lazy and quit working to earn the stuff we buy. We just keep charging more stuff on the credit card.
It seems that theer is a large enough market for these censored CDs that they turn a profit on them.
I doubt that. If these CDs were actually upfront about being censored, that would be fine, but they're not.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
So, let's see now, 20% of all music buyers live more than 30 minutes away from the nearest non-Wal*Mart record store. This is what you're saying, correct?
Seriously, I don't think anyone in their right mind can argue that the reason for Wal*Mart's large marketshare here is because it's just easier to get to than record stores (or amazon.com) for 99% of the population.
Sometimes being a consumer involves more than just the price of an item.
I imagine that if you could have received the same price breaks as B&N then you would have jumped at the opportunity. Then you would sell them at a lower cost to the consumer.
Assuming that's true, then you are doing what you counsel against. As a bookstore you are a consumer buying from distributers, but you always look for the better deals, just as the end consumer does.
The next argument usually made is, "We would have to just to survive," which is also made by the end consumer. If I can buy the same product for less, is it in my best interest to buy it for more? The store has to make the same decision, and the result is the same - it's not in the store's best interest to buy from a higher cost distributer, and it's not in the consumer's best interest to buy from a higher cost store.
This is capitalism. It's nice to believe in a rosy utopia where everyone gets what they want, but the reality is that our economy does not support that model.
To paraphrase the GPL people, "If you don't like it, invent your own currency and enforce your own economic model. You have the tools."
-Adam
Monopoly one, meet monopoly two
That's precisely what makes this so interesting.
I've always been under the impression that you don't mess with WalMart. (If you're a producer trying to get your goods sold, I mean.) If they tell you to lower prices and you don't, they'll drop your product altogether. Because of their immense size, they pretty much boss you around.
On the other hand, no one messes with the RIAA, either. And WalMart has a lot to lose here: couldn't the RIAA simply stop providing them with CDs? True, it might cut into their sales, too, but the RIAA could assert its dominance.
It's like the mob, only there's two of them. And one has just given an ultimatum to the other. I want to watch this one.
________________________________________________
suwain_2
Um you're right about everything about the fast food, theres no loss leaders in fast food. I used to order stuff for mcdonalds 3 times a week. Our cost for a hamburger was 10 cents. Our cost for a cheeseburger was like 14. Cost for a big mac was I think maybe 29 cents. The most expensive thing was the filet o fish...a whole 60 cents. Trust me there are no loss leaders at mcdonalds.
Links, please? I'm so sick of "mainstream pop commercials" it's painful to even google for such sites.
TIA!
Don't get me started. For a few years, I lived near a major metropolitan area. I had moved from a rural (suburban) area. The first sign of lack of courtesy at stores was everybody too lazy or in a hurry to return the carts to the provided stalls. they just leave them right beside the car, or most likely right behind the next car, and drive off on their merry way. I remember when stores didn't even provide the courtesy cart returns. Morally sound people would do the right thing and roll their carts all the way to the store front (uphill, both ways, in the snow).
When I catch someone doing that, I usually let them know about it. I "scold" them in front of the other people and tell them how uncourteous thay are. Usually, they put the cart back.
Because, as usual, most people do not care about "evil" business practices. The other points you bring up are mostly a matter of taste.
How about: They make it too easy for the average uncaring buyer to take his dollars and vote for Chinese sweat shops with penny-wages and appalling work conditions.
chl
The last commercial music I purchased was on cassette, I bought 2 to begin replacing my vinyl.
Then the RIAA decided it would be a good idea to make everyone who bought blank DAT media pay them a share. (anyone remember those?)I wanted them for data storage, not music. I resented being charged for something I didn't do (illegally redistribute music). Like it was ipso facto that I'm a thief. Not even sure if the law ever passed, didn't care. My weapon is my money or the witholding of it.
I havn't purchased any of their products since. I'm not exactly sure how long ago that was, 15 years + at least. I now take the view of music, as I do of gardens and flowers, etc.. I enjoy them when they come into my field of perception, and when they don't, I enjoy other things that do.
I don't steal music, as I feel it only adds to the perceived value of their product and that would be self defeating to the goal of financially hurting companies with unacceptable practices and it would justify their arguments somewhat.
That they(RIAA) want to claim this loss as "piracy" IMO makes them the "pirates" because they attempt to steal my right to resist them, by distorting facts and using government against me(as in requesting levies on other products to be paid to them, like blank media).
This only reinforces my perception that it is not wise to do business with them and they are not to be trusted. So I don't.
I thank them for one thing. I now pay more attention to who I'm giving money to and what they do with it once they get it, when I think it matters.
Seems more like Feudalism to me. Big king in far-off castle, store manager as vassel, serfs working the land (that only the king actually owns any of). Yep, Walmarts in small towns are fiefdoms.
"Somebody has to do something. It's just incredibly pathetic it has to be us."
--- Jerry Garcia
1. The grand parent accused the OP of being a selfish, elitist prick, not a criminal. And being a selfish, elitist prick is not a crime.
:)
2. The OP has offered very little by way of evidence of being an intelligent person who makes rational arguments. "I don't like the music sold at walmart, therefore it is all crap and they must be lying about the fact that 1 in 5 CDs are sold at walmart"
This guy is best ignored... but insulting him is probably more satisfying
If you want above-average wages, go to college. Start a business. DO something.
If you're just going to show up to work when you're told and do a job *ANYONE* can do, you deserve the crap pay you're getting. That's life.
And, Americans agree with me, based on how they vote with their wallets.
paintball
It doesn't make up all of the difference but you should allow for that.
Umm, if I understand history correctly, "company towns" are the specter that made communism popular/ necessary in the first place. So the "Walmart town" is not really a twin of the commune concept, but it is related alright. And you got the word "evil" right.
Those outsourced factory jobs everyone is blaming on Bush? A goodly number of them can actually be laid at the feet of Wal-Mart and it's predatory practices. Look what they did to Levi-Strauss, and L-S bent over and took it to gain acess to Wal-Mart.
This story about Wal-mart frightens me greatly, and it's just one of many.
My biggest problem w/ Wal-Mart is that they don't pay their employees enough and don't give them health care, making them a burden on the state and the taxpayers and thus me. I don't want to have to subsidize Wal-Mart's low-prices by having my tax dollars pay for a Wal-Mart employee's over-priced trip to the emergency room for something that if they had health care they could have taken care of at a doctor's office or clinic.
Dude, I think I can see my house from here.
The problem in while creating high school and college student jobs they have destroyed many other businesses. This includes hardware store owners, small grocers, and big range of positions in factores that used to supply to these. Check out their food section sometime. The last time I was there (it has been several years) I did not find one product of any kind that was locally produced. What does that say about Wall Mart participating in the community.
Or, better yet,
why not allow that kiosk to burn the CD, print a label and a sleeve, and spit it out in 30 seconds? This way, you don't need to worry about stock -- you have a supply of any CD a customer could want that's limited only by how many CDRs you can cram in the back closet.
OR, why not allow the customer to mix-n-match those tracks, so a 10-song Albumn could benefit as many as 10 different artists! That allowance-limited teen might not have to decide between popular radio personality (I refuse to call them Artists), and as "filler" they might actually pick up something decent they wouldn't have heard of otherwise.
Or, they could just use iTunes or Rhapsody or Sony Connect or...
If the report is correct (and I admit I've only read the media coverage of the report, not the report itself), that's not true capitalism at all.
I need to look at that report, it sounds interesting, but I think it sounds like it approches the problem from the wrong side.
I do live near a Wal*Mart, 2 in fact. It never stops amazing me how much stuff they sell that is so cheap. However the people working there are generaly a sad lot.
If you do not like the working conditions at Wal*Mart go to school, get a degree (or certificate), educate yourself so you can do better. Don't have children until you you can afford to raise them. Make sound finacial decisions in your life and don't feel pressed to be a wage slave. Instead of the state providing health insurance, they should provide educational opportunities. The fact that the state has to pick up the tab for medical costs, and health insurance for so many people spaeks volumes to its failing to educate it population.
In the mean time, those that are motovated to get an education and take care of themselves will not have to work at Wal*Mart.
And yeah, I know that there will always be a certain subset of the population that will never get educated, and these are the people that we all will have to support in some fashion or another. But I would bet that there are many people out there that with the proper educational oppertunities will be able to do better for themselves.
Another thing to put on the list of "things that are fucked up about San Angelo, Texas" is that Walmart actually has a better selection of high-end consumer cameras than the circuit city there does.
My, my, my...quite the Democrat aren't we?
I take it your next logical conclusion is to make decisions for these people, because you know what is good for them and since you are obviously smarter than they can ever hope to be.
This is precisely the kind of down talking and pandering that exposes you for the insecure prick that you most certainly are.
Just because someone has a boring repetitive job and might be potnetially locked into it due to circumstances in their life they are not intelligent and "don't have a lot of insight into the future?"
I hope I never meet a prick like you. You sound like you deserve a good asswhipping.
Wal-Mart's markup on stuff other than CDs ranges from 30% - 50%.
Where are you getting your numbers?
33% is most certainly not gouging.
I think the above statement is a misconception. Who is to decide what numbers are "gouging" and what numbers aren't? Why are we even talking about "price gouging" regarding such a luxury item?
33% is wildly high for some businesses, and very low for others.
Buying from a major label is sort of like buying name-brand clothes. You aren't really getting something better, you're just getting something more popular. The music is good because the radio and all the clubs overplay it, not in spite of that fact. Serious musicians don't care about that, but to the average person (myself included) the pop music is kinda catchy and gets stuck in my head. There are many similar examples, like how people will pay a lot for diamonds, but if de Beers flooded the market nobody would want diamonds anymore.
Price is not some arbitrary value which should be manipulated. It's the indicator of the current supply conditions and current demand conditions. A hotel room during a disaster (like a flood or hurricane) is highly demanded, but the supply is relatively low. When the price rises, it forces a more efficient use of the resources available. Those in need of space will be more likely to stay with friends if they can, leaving the hotel space for those more in need. Large families who might normally reserve two rooms might get one instead, leaving a room open for another family. Families might get the necessary portions of their house fixed and move back faster (again leaving room for another family), without waiting for their house to be restored to perfect condition.
Of course, all the efficiencies mentioned above would be called "price gouging". When the government steps in and prevents the price from rising naturally, it becomes a race to see who can reserve hotel rooms the fastest, and creates a shortage. Then, the families most in need might be left on the streets while families who could be staying with friends are enjoying a two-bedroom luxury suite.
Social scientists are inspired by theories; scientists are humbled by facts.
Wal-Mart doesn't demand censored lyrics because they are Bible thumping prudes. Wal-Mart demands censored lyrics because they sell better. Parents, for instance, are far more likely to buy their children CDs that don't have explicit lyrics stickers on them.
You ever wonder why it is that your local CD shop carries the censored versions of the CDs? The answer is that even in a record store (which generally don't count soccer moms as one of their primary customer groups) censored CDs generally compete very well with their uncensored versions. By just stocking the censored CDs Wal-Mart cuts down on their inventory significantly and does a better job of catering to their primary customer.
Wal-Mart sells 1 out of every 5 CDs. Clearly they must be doing something right. You might like the uncensored version, but that's not true of the "average" CD consumer.
You can't watch an R-rated movie in Walmart, nor can you play an M-rated game. However, you can listen to a CD at walmart before you buy it. That's the diff I would assume. What's a book?
Better put you tin foil hat on. Walmart has the right to sell what they want.
You don't want to comprimise yourself to Walmart.
Don't.
How dare you not give Walmart the right to pick how they do business
I don't find anything bad about this particular incident, but it cannot be considered in isolation.
Profit is NOT a dirty word. What I dislike (dunno about the rest of slashdot - we're hardly one voice) is when pursuit of those profits results in behavior which is detrimental to the community as a while. Big businesses seldom have any regard for things like a sense of community, and will cheerfully crush anything or anyone if it benefits their bottom line. I do NOT find this behavior either acceptable or commendable, and if others dismiss it by saying "that's the way it is, its how capitalism works" then I say capitalism has got some major problems and they should be fixed. I do not think that's how it should work. Things CAN change, you know. Just because that's the way things are now doesn't mean it's the right thing.
Making a profit, fine. No problem there. Making absurd profits via disregard for others, BIG problem. Greed in moderation is fine, but it MUST be countered by a regard for the larger community. Extremes are seldom healthy, and pursuit of profit is certainly no exception.
"I object to doing things that computers can do." -- Olin Shivers, lispers.org