p2pnet.net News:- The customer is always wrong. That’s the carved in stone motto of Warner Music, EMI, Vivendi Universal and Sony BMG.

‘Consumers’ have for decades been complaining about grossly over-priced 45, LP and now CD releases, loaded with dross as filler, and all to absolutely no avail.

But now, might Wal-Mart alone achieve something the Big Four Organized Music cartel’s hundreds of millions of customers have never been able to get them to do? Not even nearly?

“I never thought I’d say this, but good for Wal-Mart,” declares Ars Technica’s Hannibal, discussing the “massive price fixing settlement between the music industry and the states”.

He goes on to describe the Big Four Organized Music cartel’s minimum advertised pricing scheme (MAPS), saying the labels would, “withold valuable in-store promotional materials (ie giant cardboard cut-outs of Outkast, posters of Britney, and the like) from large retail chains that advertised CDs at low prices as a way of drawing people into the store.”

Loss-leaders, in other words.

Wal-Mart was one such, “so when the feds found that MAPS was another just word for ‘illegal price fixing’ Wal-Mart went right back to its loss-leading ways,” says Hannibal. But now it’s tired of losing money on CDs, “and has told the music industry to lower prices, or else”

Lower prices? Say it ain’t SO!!!!

But it is indeed so, says Ars Technica, quoting Rolling Stone for an idea of, “how much clout Wal-Mart has in the music industry”.

“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,” says Rolling Stone. “That’s because if Wal-Mart cut back on music, industry sales would suffer severely - though Wal-Mart’s shareholders would barely bat an eye. 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,” the story has a label executive saying. “This keeps me awake at night.”

That’s end of the Ars Technical excerpt, but there’s more - a lot more - in the Rolling Stone story, and the conclusion is especially interesting.

“Major labels insist that the low prices mass retailers such as Wal-Mart and Best Buy demand are impossible for them to achieve,” it says, talking about whether or not the Big Four will ever drop their CD prices.

But it has Best Buy senior vice president Gary Arnold saying, “The record industry needs to refine their business models, because the consumer is the ultimate arbitrator. And the consumer feels music isn’t properly priced.”

So? So maybe WalMart can get CD prices lowered across the board, says Hannibal, adding:

“If this happens and CD sales go up, then it’ll be yet more proof that the folks who’re responsible for the current state of the music industry are myopic fools who should be tarred and feathered, or forced to watch MTV for a few hours, or some other such horrible punishment.”

Also See:
Ars Technica - Wal-Mart to RIAA: We’re not gonna take it!, October 14, 2006
Rolling Stone - Wal-Mart Wants $10 CDs, October 12, 2006

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This entry was posted on Monday, October 16th, 2006 at 1:35 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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