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Wal-Mart Squeezing Record Labels to Cut CD Prices

michael posted more than 9 years ago | from the win-win-situation dept.

The Almighty Buck 910

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."

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My eyes are filling with tears for the labels... (3, Insightful)

garcia (6573) | more than 9 years ago | (#10523087)

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.

Re:My eyes are filling with tears for the labels.. (-1, Offtopic)

CountBrass (590228) | more than 9 years ago | (#10523154)

Hmm guess who was sitting there with there 10,000 word essay loaded into Notepad just waiting for the story to go live. Congratulations on the masterful piece of kharma whoring.

Re:My eyes are filling with tears for the labels.. (5, Insightful)

Anonymous Coward | more than 9 years ago | (#10523165)

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.

Re:My eyes are filling with tears for the labels.. (4, Informative)

Anonymous Coward | more than 9 years ago | (#10523345)

lol. I remember marking stuff up 100%. $12 cost, $24.99. It's still a good deal when you think about it. Think about what the retailer has to pay for: rent, electric, water, employee salaries (managers, assistant managers, cashiers Christmas help), insurance, shipping, returns, snow removal and other maintenance, and new product. How is a record store supposed to pay all of that with a %33 markup? What a moron.

Re:My eyes are filling with tears for the labels.. (2, Insightful)

AKAImBatman (238306) | more than 9 years ago | (#10523171)

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.

Re:My eyes are filling with tears for the labels.. (3, Funny)

Anonymous Coward | more than 9 years ago | (#10523257)

Walmart that was at least 10 times over capacity

Walmart has a monolopoly on the Third dimesion. If my house could store 10 times its capacity than I would be rich as them. Those b*s!e^#s having a monopoly on such a comondity - it should be FREE!

Re:My eyes are filling with tears for the labels.. (2, Insightful)

Evil Adrian (253301) | more than 9 years ago | (#10523203)

Sigh... here we go:

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. ...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.

Re:My eyes are filling with tears for the labels.. (4, Insightful)

AKAImBatman (238306) | more than 9 years ago | (#10523297)

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.

Re:My eyes are filling with tears for the labels.. (3, Funny)

SQLz (564901) | more than 9 years ago | (#10523308)

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.

Incredibly priced dog shit is still dog shit.

Re:My eyes are filling with tears for the labels.. (-1, Troll)

garcia (6573) | more than 9 years ago | (#10523335)

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.

The personal attacks are unnecessary and should be modded troll.

Just because you don't like the music being sold at Wal-Mart doesn't mean that it sucks.

The point was that Walmart is supposedly selling music by developing/independent artists. I said that I haven't seen anything like that in the Walmarts I have shopped in.

Re:My eyes are filling with tears for the labels.. (3, Insightful)

dr_dank (472072) | more than 9 years ago | (#10523212)

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?

Re:My eyes are filling with tears for the labels.. (3, Informative)

tekunokurato (531385) | more than 9 years ago | (#10523214)

The cost of carrying 60,000 cds instead of just five is tremendous assuming you don't want to be constantly stocked out. Granted, I buy all my music on the 'net and none of it from major labels, now, so I'm not necessarily supporting the old model, but if people want to find those other 55,000 CDs in a store, they're going to have to pay more. No gouging about it.

Re:My eyes are filling with tears for the labels.. (5, Insightful)

tekunokurato (531385) | more than 9 years ago | (#10523320)

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.

the only good thing you can say about walmart (1)

waspleg (316038) | more than 9 years ago | (#10523225)

is they have good prices, they have hte lowest of any grocier in my area including all the local ones

however any company that encourages their employees to apply for welfare and foodstamps as walmart does is off my christmas card list

Re:My eyes are filling with tears for the labels.. (0)

Anonymous Coward | more than 9 years ago | (#10523233)

a snob and a music snob? i couldnt of begun to imagine !

Re:My eyes are filling with tears for the labels.. (0)

Anonymous Coward | more than 9 years ago | (#10523254)

Personally, I can't believe that 1 out of 5 CDs are sold in Walmarts.
...to shop for music it's just usually a mess and full of people

Whaddya think all those people are doing in the music section of Walmart? Jerking off?

Re:My eyes are filling with tears for the labels.. (1)

garcia (6573) | more than 9 years ago | (#10523289)

Whaddya think all those people are doing in the music section of Walmart? Jerking off?

The music section is located in the electronics section which is small and usually full of people nearly shoulder to shoulder.

Let me get this straight... (0, Flamebait)

Rufus88 (748752) | more than 9 years ago | (#10523264)

Personally, I can't believe that 1 out of 5 CDs are sold in Walmart. [...] Why not concentrate on making music available for less money somewhere that I might want to buy it [...]

So, you have a hard time believing that Walmart constitutes 20 percent of their sales, and you also don't understand why they don't concentrate on the 0.000000001% of sales that are attributable to *you*? Have I got that right?

Re:My eyes are filling with tears for the labels.. (5, Informative)

LetterJ (3524) | more than 9 years ago | (#10523274)

"Personally, I can’t believe that 1 out of 5 CDs are sold in Walmarts."

The thing is, nearly 1 out of 5 *anythings* are sold by Walmart. They are big on a scale most people can't imagine.

We view "entertainment" industries as big, but really, companies like Walmart dwarf them. They just aren't in the news every day like the movie and record industry. They chug along making billions of dollars without drawing attention to themselves.

Wal-Mart has 3500+ domestic stores, and nearly 1500 international units. They pull in over $60 BILLION dollars per quarter and $2 billion of that is PROFIT.

Walmart has so much purchasing power with wholesalers that this current story is just everyday business. However, this time they happened to target a branch of the media, who tend to yell and scream louder than most industries when *anything* happens to them.

Re:My eyes are filling with tears for the labels.. (4, Interesting)

Alzheimers (467217) | more than 9 years ago | (#10523276)

It depends on what part of the country you're from. Here in the North-East, we're not as affected by the Walmart monopoly. But I've got relatives that live in Florida, and they don't say "Store" or "Supermarket" anymore.

They say, "Oh, we're out of soda ... I need to run to the Walmart". "Oh, we need a new TV ... I need to head up to the Walmart."

Walmart is ubiqitious in some parts of the country. They're the second highest employer in the country, behind the government. Frankly, I'm surprised it's not a higher ratio.

Re:My eyes are filling with tears for the labels.. (2, Insightful)

shawn(at)fsu (447153) | more than 9 years ago | (#10523322)

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.

And people complaining... (-1, Offtopic)

SynapseLapse (644398) | more than 9 years ago | (#10523089)

about a duplicate post on a free news site in 3...2...1...

Re:And people complaining... (-1, Offtopic)

Anonymous Coward | more than 9 years ago | (#10523299)

You're counting backwards

Good! (0, Redundant)

brywalker (738506) | more than 9 years ago | (#10523093)

Its about time that someone stood up to those thugs and gave them what's what.

Re:Good! (0, Flamebait)

SatanicPuppy (611928) | more than 9 years ago | (#10523226)

Yea, but Wal-Mart is EVIL. They do this crap to everyone, including small companies which end up selling products almost at a loss. Thye exploit immagrants, and women.

If we're lucky they'll go to war, fight it out, and niether will survive.

Re:Good! (1)

danheskett (178529) | more than 9 years ago | (#10523304)

WalMart could purchase the entire music industry lock stock and barrel.

It's an amazingly well run company.

WalMart is the type of place that would calculate the benefit of exploiting workers against the potential costs in liability, reputation, and damages, and then hold a meeting to discuss each side.

Don't ever assume that anything that happens at Wal-Mart is on accident.

The thing about Wal-Mart's pricing that you mention is interesting. They expect price decreases from suppliers every quarter of every year on every product. If you don't meet that goal, you get dropped and a new supplier is picked up for the same product.

It's a pretty good way to put pressure on suppliers and to remain very very very pricing proactive.

Re:Good! (1)

MankyD (567984) | more than 9 years ago | (#10523241)

But the WalMart Monopoly is no better either. I've heard of them doing things like this before: "drop your price or we drop you." It's the sort of thing that only a store like WalMart can do, thus giving them an unfair advantage over their competitors who can't throw their weight around like that.

I thought WalMart ebodied the evils of capitalism (0)

Anonymous Coward | more than 9 years ago | (#10523267)

Isn't WalMart evil? Despite selling products for less money and letting people get more for less?

Good (3, Interesting)

HBI (604924) | more than 9 years ago | (#10523095)

I'm still not buying any more RIAA CDs, Walmart or elsewhere.

Re:Good (1)

Oxy the moron (770724) | more than 9 years ago | (#10523286)

I'm with you on this one. I haven't bought a new CD in probably 2-3 years. Now that I have broadband access, I would much rather listen to various radio stations and whotnot via the web (where I can cycle around to hear what I want to hear) than pay money for a CD where I *might* like 1/4 of the songs.

Re:Good (4, Insightful)

mfh (56) | more than 9 years ago | (#10523324)

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.

Well, what do you know? (5, Funny)

gpinzone (531794) | more than 9 years ago | (#10523097)

Two wrongs sometimes do make a right.

Re:Well, what do you know? (1)

dkf (304284) | more than 9 years ago | (#10523251)

No, but they do make for a good opportunity to eat popcorn...

Re:Well, what do you know? (1, Insightful)

Anonymous Coward | more than 9 years ago | (#10523323)

Two wrongs sometimes do make a right.

Tell that to Walmart's competitors.

Huh? (2, Funny)

BigIrv (695710) | more than 9 years ago | (#10523098)

Which one am I supposed to ridicule?

Evil Empire 1 (4, Funny)

CountBrass (590228) | more than 9 years ago | (#10523102)

meet Evil Empire 2.

Make it difficult to know who to BOOOOH! at!: Ugly Sister 1 (speciality: cutting wages to the bone and destroying local stores) or Ugly Sister 2 (speciality: suing young children and pensioners).

Re:Evil Empire 1 (0)

Anonymous Coward | more than 9 years ago | (#10523180)

Ah, yes... the "gruesome twosome".

Re:Evil Empire 1 (2)

oldave (160729) | more than 9 years ago | (#10523298)

Why not boo both of them, and take your money elsewhere? That's what I do.

Soundclick.com can get you some pretty good music (yeah, you gotta wade through all the goobers who think the world is holding its collective breath waiting to hear them croak out some lyrics while a midi file plays near their microphone... but amongst the chaff is some pretty tasty wheat)... there are other places, as well, to find music that's got nothing to do with the RIAA.

Then there are Wal-Mart's competitors. Use them. Shop them. Buy from them.

As Clark Howard's fond of saying, "Vote with your feet(money)"

Re:Evil Empire 1 (0)

Anonymous Coward | more than 9 years ago | (#10523302)

speciality: cutting wages to the bone and destroying local stores

Welcome to the real world: you have no right to make $X per year. And local stores have no right to be free from competition for consumer's money.

some glorious act of disobedience or blasphemy (-1, Offtopic)

Anonymous Coward | more than 9 years ago | (#10523105)

Jehovah fucking Yahweh, I curse you in the name of Satan the Almighty. Evil lives in me and I walk with Satan all the days of my life cursing and mocking you god (the dog), filthy fucking maggot. My hate grows by the second as I dream of the day when you are under my feet begging for my cock.

God I rape you and hurl blasphemy into your mind. I demand you to come down from heaven right now and get down on your stomach in front of me, lifting your asshole up to receive my cock. God I promise to fuck you and I long to rip your eyes out, kick you in the face, mutilate you, and bathing in your blood. Listen to me, I'm screaming
in your ears to come to earth and in this room for I will have my way with you, oh most cursed god of heaven (you foul piece of shit). Satan is my God and he will force you to drink cum from my dick. I will never stop sinning and blaspheming your name, presents, existence, and most of all the rotten, putrid holy spirit that fucked the mother of gOd and pregnanted that slut with jesus christ.

I stand before all the angles and saints, gOd, jesus fucking christ, mary the whore of gOd, the filthy holy spirit, and they are witnessing my denouncement of you gOd, and my ongoing blasphemy of the holy spirit. I am purposely cursing the holy spirit and its purity and will defy you god and the holy spirit all the wicked days of my sin filled life. My soul is full of evil thoughts and sins, its black with pure hatred of anything holy.

God, I will find new ways to defile and blasphemy you, because I'm seeking evil every second of my life. That is all my mind can think about. You're pain is my desire, you're name I mock, your son I defy, your mother I fuck, and your spirit I cum in.

The only prayers from me are prayers of hate and blasphemy, evil is a part of me, it dwells in my soul, cursing everything about you is the most important part of my existence, total darkness is inside of me. gOd I will rip you out of heaven and force you under my feet you fuck pig. You will listen to all my demands. I will slip into heaven and I will rape all the angels and saints and will kill them in your unholy putrid name. God I will kill you and bath in your blood. Holy spirit I demand you to listen to my hatred of your foul existence, drink my cum, and remember my blasphemy against you, you putrid, rotten, vile spirit of gOd.

I'm the meaning of gOd's pain. This is the way that you will die dog gOd. It will be a slow death, the joy of killing you will make my cock hard, I know you will feel my showers of hate and you will feel extreme pain as I beat your body and make every inch of your body black and blue. I force you bastard Jehovah to the ground and I will
put you under my feet where you belong, you putrid bastard. God you will try to run but I will strap you down and fuck your soul before I rip it out of your body. God "the dog", your life is worthless, for I'm the angel from your new God "Satan". I destroy everything holy, you are felling my hatred pierce your mind intensely, inferior god "dog" you fucking maggot. You will be screaming in pain as I strap you down under my feet, you will look up at me and I will piss down your throat.

I'm so consumed with hatred of you that I will masturbate, and when I feel that I'm about to cum, I force my evil cock full of Satan's cum down your mouth and fill it up with my vile hot cum. I will be pumping your body full of my hot cum. Inside your brain is my blasphemy. The pressure in your skull begins push through your eyes,
burning your flesh, and I laugh as it drips away. Heat burns your skin; your mind starts to boil with my blasphemy, and pure evil hatred of your fucking existence. You will not last long; it's just a matter of time until your ripped apart with my hands. You will be floating in a sea of your blood, smelling your death as it burns. My wicked cum is deep inside you as I skin you. You're eyes will bleed as you pray to me for the end of you're wide-awake nightmare. Waves of pain rap around you're soul, death is staring down at you, your blood is draining fast as I'm injecting hatred into your soul, and dying heart, with wicked sweet Blasphemy and hot cum. The demons are dancing with the thought of you in hell. Pathetic god "dog" how does it feel, you're dieing and I'm celebrating your
pain. I live to hurt and defile you the rancid god of heaven. Satan is calling you're cursed name, Satan takes you're soul dear god, and raps his cock around it. In my hand is you're heart and my cock is resting on it. I can't wait any longer so I cum inside your heart bursting it apart with my explosion of evil vile cum. I crush what is left of your heart into the dirt. The dog god is finally dead and he is burning brightly in hell as cum drips down my leg.

author: mdf

Re:some glorious act of disobedience or blasphemy (-1, Offtopic)

slaker (53818) | more than 9 years ago | (#10523156)

You know Mr AC, there are many fine brands of decaf that taste just as good as regular coffee.

Re:some glorious act of disobedience or blasphemy (0)

Anonymous Coward | more than 9 years ago | (#10523235)

yeah the RIAA does suck...

As my mummy always said... (2, Insightful)

AKAImBatman (238306) | more than 9 years ago | (#10523107)

...treat others as you would like to be treated. Enjoy the seed you sowed RIAA (and members)!

Re:As my mummy always said... (0)

Anonymous Coward | more than 9 years ago | (#10523198)

Would patrons of earth kindly note that the golden rule should not be taken literally by sado-masochists.

Re:As my mummy always said... (4, Interesting)

overbyj (696078) | more than 9 years ago | (#10523277)

As much as I would like to rub the RIAA face in the dirt with this one, the issue is really much much bigger than just the RIAA. Wal-Mart is a ruthless competitor that rivals, if not surpasses, that ruthless competitor in Redmond. They have such retailing clout that when they make you an offer, you have no choice but to take or suffer the perilous consequences.

Vlasic pickles is one fine example of their ruthlessness. Wal-Mart basically forced Vlasic to make the big size containers with more pickles in them than most humans should eat within a reasonable amount of time. Wal-Mart basically forced a price structure on them too with this giant jar of pickles. As a result, you the consumer have a choice. Pay for the giant jar and end up throwing away the vast majority of the pickles, or buy the more expensive jar in the grocery store. Joe Consumer buys the giant jar with the rockbottom price. As a result, Wal-Mart has now forced Vlasic to cannibalize themselves and they end up having to file bankruptcy.

Wal-Mart has a well-established policy of forcing sellers to sell their products for cheaper prices year after year if the product does not change. Wal-Mart argues that if your product does not change, then production costs level off and you should then be able to bring your product to them for a lower cost. Ever notice how many gazillion different kinds of toothpaste and toothbrushes there are at Wal-Mart? That industry has figured that they cannot afford to not be sold at Wal-Mart but yet they have to maintain a certain price structure. Therefore, they "innovate" with toothpaste and toothbrushes. Now you have cinnamon flavor, cinnamon flavor with whitening, cinnamon flavor with tartar control, cinnamon flavor with whitening and tartar control and so on. This will not stop. What is next? Cinnamon flavor with bladder control???? Wal-Mart forces this "innovation" because of their business tactics.

I could list many more examples and this is to not even mention that it is nearly impossible to actually earn a living working at Wal-Mart. They are basically an American sweatshop except they don't actually produce anything. They just peddle stuff and drive competition away.

So as much as I would like to see the RIAA suffer for their deeds, this issue transcends them.

Monopoly? (-1, Redundant)

Anonymous Coward | more than 9 years ago | (#10523115)

I would hardly call having 20% of the market a monopoly. It appears monopoly has become a perjorative term to throw at anyone negotiating a business deal.

Re:Monopoly? (2, Insightful)

halivar (535827) | more than 9 years ago | (#10523187)

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).

at the end of the day (1)

Exter-C (310390) | more than 9 years ago | (#10523119)

At the end of the day the profits will move from one company to the other. Walmart can pass these reductions along to the end user when the cd is 10 years old and nobody wants it..

yay! (0)

69sofine (814153) | more than 9 years ago | (#10523121)

good for them..

Monopoly powers evening each other out... (2, Interesting)

aicrules (819392) | more than 9 years ago | (#10523123)

Capitalism can work if the big boys are greedy enough to turn on each other!

Unfortunately, someone is going to try to do this to Microsoft and when the dust settles, Bill Gates will still be there smiling.

You'd think the 5 major countries that use the most oil could form a bargaining voice powerful enough to counter OPEC in this same way....speaking of dangerous challenges.

Re:Monopoly powers evening each other out... (2, Insightful)

sadcox (173714) | more than 9 years ago | (#10523237)

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.

Maybe they can... (0)

Anonymous Coward | more than 9 years ago | (#10523125)

Maybe they'll hook up. Wal-Mart would be like, "Damn, girl, you look all sexy and stuff". The RIAA would be all, "Yo, you want somma dis?".

You know, the could have little monopoly babies or something.

Of course, probably not. Wal-Mart might be hideous, but the RIAA looks like some cancerous mole on the butt of a pig.

Yay Wal-mart! Wait, isn't Wal-mart evil? (0)

Anonymous Coward | more than 9 years ago | (#10523130)

Now I'm all confused. Am I supposed to be rooting for the corporation that drives all the mom & pop stores under? Can't root for the record companies...

What to do, what to do?

This will help, but... (1)

grunt107 (739510) | more than 9 years ago | (#10523131)

Walmart does not sell 'warning label' CDs, and alot of my collection have that scarlet letter on them. This will hopefully get the record labels to finally reduce the prices, like they promised over a year ago. Then I can go to Circuit City and pick up some good, dirty music.

Re:This will help, but... (1)

slimak (593319) | more than 9 years ago | (#10523219)

Warning I have not RTFA. However, I would venture a guess that the discounted price would be only to Walmart and not to everyone. Circuit City does not have the market share to make demands like Walmart does. RIAA could tell CC "bad buy 'em high or don't buy 'em at all". They cannot however use that approach on Walmart because the lost revenue would be too high if Walmart were to call this bluff.

When titans clash (1, Funny)

Weaselmancer (533834) | more than 9 years ago | (#10523134)

It's kind of like being a mouse watching two professional wrestlers fighting over a hoagie.

"Ooo look! Crumbs!

Re:When titans clash (1)

AndroidCat (229562) | more than 9 years ago | (#10523195)

Yeah, but in this case, it's a mouse hoagie.

Re:When titans clash (0)

Anonymous Coward | more than 9 years ago | (#10523216)

That's a very good image -- did you think it up on the spur of the moment?

Uh? (2, Insightful)

squiggleslash (241428) | more than 9 years ago | (#10523136)

The solution is for the publishers not to sell to WalMart. It's that easy.

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.

Re:Uh? Your an Idiot (1, Troll)

linsys (793123) | more than 9 years ago | (#10523252)

You obviously didn't read the headline let along the article, since Wall-Mart sells 1 out of every 5 CDs you better believe they are taken seriously.

Just because you don't take them seriously doesn't really ammount to a hill of beans!

Re:Uh? (1)

TheRealMindChild (743925) | more than 9 years ago | (#10523255)

It is similar to the convienient store/Gas Station Sheetz that is around here in my area... They have a bottom line of profits that a store has to make to stay open. It isnt enough to be profitable, but it has to be profitable by so much, or it gets closed. I am sure Walmart is in the same mindset.... Product X doesnt bring in Y profits, then they simply cant be bothered to sell it

oblig (0)

Anonymous Coward | more than 9 years ago | (#10523140)

i, for one, welcome our new monopolistic overlords. (who make my prices lower).

and...

1. Give the RIAA a taste of their own medicine.
2.
3. Profit!

How is this bad? (1, Insightful)

Anonymous Coward | more than 9 years ago | (#10523145)

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.

Walmart a monopoly? (3, Insightful)

Richard_at_work (517087) | more than 9 years ago | (#10523150)

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.

Re:Walmart a monopoly? (2, Insightful)

Trolling4Columbine (679367) | more than 9 years ago | (#10523217)

I concur. That's a lot like saying that McDonald's has a monopoly over the fast-food industry.

But then this is Slashdot. People tend to use big, ominous words for effect, even when they don't know what the words mean.

Re:Walmart a monopoly? (1)

hsmith (818216) | more than 9 years ago | (#10523343)

this is BS, i am sorry but they are well documented as being bullies to push down prices of their suppliers with "do it or we will drop you" mantra.

Walmart is a scary company they are HUGE and our out of control. Couple that with horrible business practices and you have one nasty business machine

If only... (1)

TFGeditor (737839) | more than 9 years ago | (#10523157)

...there was some way to trade Wal-Mart on Napster--the ORIGINAL Napster.

Heh (4, Insightful)

starseeker (141897) | more than 9 years ago | (#10523159)

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.

Re:Heh (1)

Trolling4Columbine (679367) | more than 9 years ago | (#10523273)

"...since people will be able to buy more CDs without feeling quite so ill at the prices."

Correct me if I'm wrong, but hasn't one of Slashdotters' more consistent gripes been that music CDs are overpriced? Even though this is Wal-Mart (and we all know that Wal-Mart is evil), this would be a step in the right direction.

No news here. (5, Informative)

artguy66 (801662) | more than 9 years ago | (#10523160)

Walmart does it to ALL of their manufacturers. Perhaps this one may deserve it.

20% is not a monopoly (2, Insightful)

Peldor (639336) | more than 9 years ago | (#10523172)

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.

Re:20% is not a monopoly (0)

Anonymous Coward | more than 9 years ago | (#10523243)

It may not be a monopoly, but 20% of the music sold is one of the largest single chunks of the pie.

Re:20% is not a monopoly (1)

StevenHenderson (806391) | more than 9 years ago | (#10523310)

Sorry. 1 in 5 is not a monopoly at all. A major player, obviously, but not a monopoly

The submission was not referring to Walmart as a music monopoly. They are a "goods" monopoly, though, not even just in the US. They are fast branching out all over the world, squeezing out smaller stores. I, personally, do not have a problem with them since they keep prices low and create jobs, but many people would disagree with me.

Lets get ready to rumble...... (2, Funny)

bblazer (757395) | more than 9 years ago | (#10523174)

In the blue corner we have a gorilla weighing in at 600 lbs! The Recording Industry!!!!! In the red corner we have another gorilla weighing in also at 600 lbs!!!! Wal-Mart!!!! Announcer1, "This bout is expected to go the full 15 rounds and the odds makers are expecting a split decision that will just end up costing every one more money one way or another." Announcer2 "Yes, but we have seen a lot of this pre-fight hype before."

walmart means moving product (4, Informative)

dubiousmike (558126) | more than 9 years ago | (#10523176)

though many of you hate walmart for a bunch of good reasons, if you do not sell your CD in walmart, you can not top the billboard charts. Artists have changed core elements of their music/art because walmart said they wouldn't sell it if they didn't. This might actually lower prices for some independant music resellers, though unlikely. Them walmart will just ask for an even lower price. The fact remains that walmart has such a huge purchasing power, that little stores can not compete.

Walmart editing (1)

jlefeld (814985) | more than 9 years ago | (#10523186)

Does walmart still force cd's to be edited there?

Make up your mind ... (1)

adzoox (615327) | more than 9 years ago | (#10523193)

Well, make up your mind ...

Do you want the RIAA asking for higher pricing [see the many stories about price fixing & the lame settlement that followed]

Or

Do you want lower prices?

I hardly see how lower prices is a negative effect of a monopoly.

This is NOT Walmart's OWN product - they do not also control the content of this product - IE as Microsoft does with Internet Explorer.

Microsoft abused a monopoly by distributing a product for free, a product that was an essential component to the OS, but was also competition to other software. They controlled the development, quality, and distribution.

Walmart is only controlling ther distribution.

I see this as a net gain for online music stores to be able to negotiate better bulk pricing and for small record shops to use a negotiating chip as well.

Not surprising (1)

nuclear305 (674185) | more than 9 years ago | (#10523201)

That's the way the world of capitalism works...

A few more "negotiations" ...some lawsuits, and then all of your local Wal-Marts will come complete with "The RIAA Store" located right next to the instore McDonalds.

Standard Operating Procedure (5, Informative)

chud67 (690322) | more than 9 years ago | (#10523202)

I have heard from more than one person that this is typically how WalMart deals with its vendors/suppliers. If you have a company making widgets, for example, WalMart might come to you and place a small order for widgets to sell in their stores. Then as your product sells they gradually increase their orders until eventually they have pretty much your entire production line devoted to WalMart orders. At that point they come in and low ball you by saying, 'we're only going to pay x dollars per order from here on out, take it or leave it'. The vendor, whose entire business now hinges on WalMart orders, is forced to comply.

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...

Dark Side of the Force... (1)

Phoenix666 (184391) | more than 9 years ago | (#10523204)

Meet the Super Ultra-Plaid Dark Side of the Force. Frankly, it's astonishing that it will take a WalMart to do what all the folks on this site and others haven't with three years of complaining. But in WalMart I trust on this one. They are many times more powerful that the RIAA, and will squash them like a bug.

The savings go right to.. euhm... (1, Redundant)

RenHoek (101570) | more than 9 years ago | (#10523232)

Am I the only one cynical enough to think that the difference in bulk prices now and in the future will only go to line the pockets of WalMart itself, leaving the consumer with ever more highly priced music?

Did anybody tell Best Buy? (1)

datadriven (699893) | more than 9 years ago | (#10523240)

Because they'll probably do this next.

Monopolies throwing their weight around is bad (2, Interesting)

Anonymous Coward | more than 9 years ago | (#10523242)

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.

It scares me just how big Walmart is. What happens when Walmart succeeds? You think the record labels are simply going to drop the prices across the board? Of course not, they are only going to do it or Walmart. And then more people will buy CDs at Walmart because they are cheaper than elsewhere, making Walmart even more powerful.

The sole reason why the record labels are so powerful is because they are fundamentally a monopoly. It doesn't matter if you can buy music from an indie record label if your favourite band is signed with a major record label. There is no competition. It's even worse because the major record labels have formed a cartel.

What I would like to see is a shortening of the copyright term to something realistic like 14 years. Then people could legitimately make money and compete with the major labels by selling public domain works. Right now, for music that the public actually want to listen to, the public domain is practically nonexistent. And don't give me any crap about the RIAA training us to like Britney Spears. I like lots of artists signed to major record labels.

Barring that (hey, with Disney's deep pockets, no music will ever enter the public domain again), I would like to see regulation of these monopolies. The artist should keep the copyright, and be forbidden from signing exclusive contracts with the record companies. That way, if a record company has excessively high profit margins, another record company can come in and sign up their artists and undercut them. The free market in action - this is how it is supposed to work, competition is good for the public. If the government insists on screwing it up with copyright, then the best they can do is offset the negative effects with regulation.

Oh, and one last thing:

Wal-Mart sells 1 out of every 5 retail CDs.

Bullshit. Perhaps they sell one in five retail CDs in the USA, but not worldwide.

Wal-Mart is a horrible monopoly (1, Funny)

Anonymous Coward | more than 9 years ago | (#10523246)

Did you know that only wal-mart can sell products in wal-mart stores? That?s right. Only wal-mart can sell products in wal-mart stores. 100%. And you know what else? 100% of wal-mart's profits go just to wal-mart! Can you believe that? All 100% of wal-mart's profits go to wal-mart. Something must be done!

Good but ... (1)

Mr_Silver (213637) | more than 9 years ago | (#10523247)

I'm still a little unsure how this will help customers. It's not as if either industry has been quick to pass on the savings to customers.

My guess is that the music industry will be forced to reduce their prices and Walmart will make a bigger profit.

Of course, I'm just being really cynical. In the long term it may work out better but for the moment, I'm saying pessimistic.

Wall Mart does this kind of thing to all vendors. (1)

LaminatorX (410794) | more than 9 years ago | (#10523248)

The only people Wall Mart is good for are their shareholders. Their vendors think their getting into a huge market, but then see their margins get squeezed into oblivion. Their shoppers who decide where to shop on price alone find their downtown turn ghost town and wonder where all the manufacturing jobs went.

Fuck Wal-Mart (0)

Anonymous Coward | more than 9 years ago | (#10523249)

Wal-Mart and the RIAA suck

Let's keep the eye in the ball... (2, Insightful)

ZZeta (743322) | more than 9 years ago | (#10523250)

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.

Walmart could kill the music industry (3, Interesting)

Anita Coney (648748) | more than 9 years ago | (#10523256)

If Walmart truly sells every 1 out of 5 CDs sold, it should simply start signing major artists directly. That way Walmart could keep even more of the profits.

*DOES NOT COMPUTE* (3, Funny)

hcob$ (766699) | more than 9 years ago | (#10523259)

I hate Walmart's Business practices...
I hate the RIAA's price fixing...
I like cheaper music prices....


*Head explodes from the logical paradox*

I'm soo confused.... (0)

Anonymous Coward | more than 9 years ago | (#10523263)

i...i....i don't know which one to support...this is worse then the election...

Re:I'm soo confused.... (1)

Anita Coney (648748) | more than 9 years ago | (#10523301)

You don't have to support either. If Walmart gets lower prices, the music industry will be forced to give lower prices to all major retailers. You get cheaper CDs either way.

Walmart is not a monopoly (4, Insightful)

amightywind (691887) | more than 9 years ago | (#10523266)

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.

But so what? (3, Insightful)

beforewisdom (729725) | more than 9 years ago | (#10523279)

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

Why CDs are $15.99 (4, Informative)

ChaosMt (84630) | more than 9 years ago | (#10523287)

From the end of the article...

$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

Re:Why CDs are $15.99 (0)

Anonymous Coward | more than 9 years ago | (#10523313)

they need to trim the fat off the four most expensive parts

$1.70 Label profit
$2.40 Marketing/promotion
$2.91 Label overhead
$3.89 Retail overhead

Funny, isn't it? (1)

WilyCoder (736280) | more than 9 years ago | (#10523300)

Wal-Mart sells 1 out of every 5 retail CDs.

...Wal-Mart carries about 5,000 CDs.


So the LARGEST CD vendor has the SMALLEST selection. Yeah, THAT makes sense :/

Growing Monopoly (1)

Vague but True (804899) | more than 9 years ago | (#10523315)

Hey, it's great that Wal-Mart is going after record labels to force a price drop on CDs, however it will impact the little guy.

If the record labels drop the price on CDs for wal-mart (say $10 for a CD) and they keep the price the same for Vintage Vinyl (say it's still $15), then eventually vintage vinyl is going to go out of business. Vintage vinyl won't be able to turn a profile on music sales since they don't purchase 2.3 ba-zillion cds at once.

Either way, we're screwed.

See, It Works (1)

boatboy (549643) | more than 9 years ago | (#10523325)

Monopoly one, meet monopoly two.
Factually incorrect about the monopoly, at least in Walley-World's case, but evidence that in most cases capitalism works this sort of thing out. The only alternative is paying $300 for CDs that must praise the Peoples Republic of America.

Wow about making the customers happy? (1)

LWATCDR (28044) | more than 9 years ago | (#10523337)

"How about making the customers happy? " They are. Wallmart is there biggest customer. You do not buy records from the record companies you buy them for a store that buys them from a record company. As to Wallmart not carrying anything from new artists. You have got to be kidding. Wallmart provides what most of it's customers want at a low price. They do not cater to people that want the best. Wallmart is the land of the OK. If you want good tools you buy them from a Snap On dealer or get Craftsman tools from Sears. You need s screwdriver cheap you get it from Wallmart. You want a really good stereo you get it from a stereo store or on line. Want a cheap cd player Wallmart. So of you want Pop music you can get it cheap from Wallmart. The question is will Wallmart lower the price of CDs if they get the price drop from the record companies to make Wallmart customers happy?
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