Almighty Press


February 28, 2007
Exclusives aim to pull music fans into stores



By Brian Mansfield, Special for USA TODAY

The world of music distribution faces turbulent times. Tower Records is gone. Hard-copy music sales continue to drop year to year, and double-digit hikes in digital sales haven't offset the losses. Meanwhile, brick-and-mortar retailers search for new ways to lure music-buying customers, particularly adults, who still buy CDs but no longer have the time or the inclination to go to music stores assuming they can find one.

As national music chains dwindle, big-box retailers such as Target and Wal-Mart are taking cues from Starbucks and iTunes by adding more exclusive music to their shelves. Target's new Spotlight Music Series offers 15 discs, including new adult-contemporary music, genre compilations and mixes handpicked by Avril Lavigne, Jason Mraz, Dave Matthews and others.

"We know our guests don't have a lot of time to browse for their favorite music," says Target's Paula Thornton-Greear. "So the Spotlight Music Series makes it easy to discover, or rediscover, their favorite music."

"People are buying music differently, especially adults," says Jim Brandmeier of 180 Music, which developed the series with Target. "They're likely to buy music while looking for something else."

Retailers typically take a couple of approaches for exclusives. First, they work with labels or individual artists to create special packages. That could be as simple as Josh Groban's Valentine's Day compilation, With You, for Hallmark, which included two new songs. Or it could be as massive as Wal-Mart's exclusive deals with Garth Brooks (a multiyear pact) and The Eagles: The group's upcoming Long Road Out of Eden album will be available only at the chain for the first year.

Second, retailers extract exclusive content from labels. Buyers of John Mellencamp's Freedom's Road, for instance, had several bonus options, including a four-song CD at Best Buy, a DVD at Wal-Mart, downloads at Walmart.com and Circuit City, and a video and two rough mixes at iTunes. The permutations amounted to eight tracks and five videos. Jerry Lee Lewis' Last Man Standing album gave digital exclusives to Wal-Mart, Best Buy, Target, CMT.com, iTunes, Rhapsody, Urge and Napster.

Such extras leave smaller stores in the cold.

"The profit margins of music retail aren't very good to begin with," says Clark Benson, CEO for The Almighty Institute of Music Retail, a California-based market research firm. "The big-box retailers don't need the margins from CDs. The exclusives are a draw, then customers buy appliances or electronics."

"I find the Wal-Mart/Garth Brooks deal to be less objectionable than having an extra track to a Bruce Springsteen album," says Mike Dreese, co-owner of the 27-store Newbury Comics chain in New England. Brooks "is a clean deal. If you want that, go to Wal-Mart. With the other, we're in the position of selling an inferior product. It has a corrosive effect."

Billboard senior correspondent Ed Christman says Target's new line is a variation of the licensing lure.

"What's unusual, as it was billed to me, is that it's much more marketing-heavy," he says. "It will be featured in circulars and possibly a television spot. Usually, the retailer doesn't spend so much money to promote these types of things."

In addition to generating incremental sales, Target's line appeals to its demographic while helping to distinguish it as a source for music in a chaotic, changing market. Starbucks has successfully implemented a similar approach with its combination of new music and licensed compilations. The coffee chain has turned its 12,000 stores and 44 million weekly customers into a powerful purchasing force, particularly for new artists like Antigone Rising and Sonya Kitchell.

"Music has been part of the coffee experience for quite some time," says Starbucks Entertainment president Ken Lombard. "We definitely know that Starbucks customers are totally hungry for the discovery of new artists. We knew that we had a unique opportunity and the perfect format for artists and labels to break new artists."

Starbucks recently released the debut CD by rock band Low Stars, featuring former Tonic guitarist Jeff Russo. Upcoming exclusives include a covers album with tracks by R.E.M. and Robert Plant and Off the Clock, a compilation by Starbucks baristas and shift supervisors.

As music's commercial paradigms shift, other stores find ways to create packages geared toward their clientele. Cracker Barrel Old Country Store now offers compilations from country artists, plus vintage Grand Ole Opry shows.

"It's private branding," says Christman. "How many companies make their own cereal for a supermarket chain? How many companies make their own detergents for a discount retailer? That's a set retail strategy."

Labels see the big-box trend as a potential bottom-line booster.

"You have to ask yourself who can grow the pie, not just shift the shares," says Jim Saliby, SonyBMG Nashville's vice president of sales.

Permission granted by copyright holder for this express use only.



Article List

November 21, 2013 - New York Times - Records Are Dying? Not Here

March 27, 2013 - Glendale News-Press - It's a matter of record: Burbank's Atomic Records and Backside

December 30, 2012 - Detroit News - As one record shop closes, vinyl music plays on in another

April 20, 2012 - Boston.com - New vinyl album releases give record stores a kick

November 20, 2011 - Salon.com - In an iTunes age, do we need the record store?

June 9, 2011 - NJ.com - Curmudgeon Records closes its doors for good

April 16, 2011 - Wall Street Journal - One-Day Record-Store Revival

February 1, 2011 - Charlottesville News & Arts - Plan 9 Changes Location

August 13, 2010 - The Tennesean - Anita Wadhwani: Nashville indie record stores' sales spin in right direction

January 3, 2010 - Delaware News Journal - Delaware music shops get creative to compete with downloads, chain music stores

September 24, 2009 - Los Angeles Times - L.A. independent record shop is still in a groove

August 20, 2009 - CNN Money - You can make money off online music

June 14, 2009 - New York Times - Retailing Era Closes With Music Megastore

May 13, 2009 - Medill Reports - Resurgence in vinyl helps record store in recession

April 26, 2009 - Los Angeles Times - In a digital age, vinyl albums are making a comeback

April 18, 2009 - Charlotte Observer - Record stores band together

April 17, 2009 - Detroit News - Record Store Day spins profits and good beats at Metro Detroit shops

April 17, 2009 - Associated Press - Record Store Day celebrates indie retailers

April 10, 2009 - Detroit News - Street Corner Music moving to Oak Park plaza

April 10, 2009 - Toledo Free Press - New record store shakes up Adams Street

January 8, 2009 - OC Register - Closing date for Virgin Megastore at The Block

October 28, 2008 - Reuters - AC/DC back in "Black" with global smash

September 23, 2008 - Chicago Daily Herald - Independent music stores haven't yet disappeared from suburbia

June 23, 2008 - New York Times - For Tom Petty Fans, the True Sound of Vinyl, Also Captured on a CD

April 19, 2008 - Lafayette Journal Courier - For some, record stores live on

April 19, 2008 - New Jersey Star Ledger - It's Record Store Day. Play it again, Sam!

April 18, 2008 - New York Times - Record Stores Fight to Be Long-Playing

April 18, 2008 - Dallas Morning News - Retailers hope Record Store Day turns up volume at mom-and-pop shops

April 16, 2008 - Timeout New York - Platter Up

December 27, 2007 - Los Angeles Times - Virgin Megastore to close shop

December 16, 2007 - New York Times - For a "Dinosaur," an Exuberant Second Life (Looney Tunes Reopens)

December 3, 2007 - Detroit Free Press - The same old song: Music store closing

November 7, 2007 - Washington Post - Eagles soar past Britney to top of charts

November 4, 2007 - The Ledger - Two Young Entrepreneurs Unafraid of Risk of Going on Records

August 20, 2007 - Billboard - Almighty Taps Hans As VP

June 29, 2007 - ABC News - Long Live the Record Store

June 28, 2007 - Orange County Weekly - Locals Only

June 13, 2007 - Reuters - McCartney's Starbucks album heats up U.S. charts

June 9, 2007 - Billboard - Commentary: Retail Recovery

May 9, 2007 - Columbia Free Times - High Fidelity

March 22, 2007 - NARM Awards - Almighty Retail Named NARM Related Supplier Finalist For Third Consecutive Year

March 16, 2007 - Chortler - Shout! Factory Has Revamped Its Website

March 9, 2007 - PhillyBurbs.com - Internet killed the record store?

March 4, 2007 - Sacramento Bee - New groove for Solomon

February 28, 2007 - USA Today - Exclusives aim to pull music fans into stores

February 28, 2007 - New York Newsday - Latin record shops thrive despite changes in music business

February 23, 2007 - Montpelier Bridge - Buch Spieler Sails On Despite a Music Industry Decline

November 20, 2006 - Austin 360 - In Austin, Niche Indies Rule

October 20, 2006 - Sacramento Bee - Tower brand could survive

October 15, 2006 - Pittsburgh Tribune-Review - Tables have turned on record stores

October 14, 2006 - Sacramento Bee - Small labels lose valuable ally in Tower

October 6, 2006 - Desert Sun - Record Alley remodels

September 27, 2006 - Music & Copyright - Niche Marketing of CD albums continues to rise in the US and Physical Sales overall decline

September 22, 2006 - CNN.com - Indie stores confront a new era

September 19, 2006 - New York Newsday - 34 years, and that's not all, folks

August 18, 2006 - The Roanoke Times - Plan 9 Music puts new spin on 5 Record Exchange stores

August 3, 2006 - The Hollywood Reporter - Nervous music retailers face hazy digital future

July 16, 2006 - New York Times - The Graying of the Record Store

July 13, 2006 - Rolling Stone - The iTunes Holdouts

July 11, 2006 - Roanoke Times - Record store's "last dance"

July 5, 2006 - Port Townsend and Jefferson County Leader - Quimper Sound moves, expands to change with times

June 6, 2006 - Billboard - NARM Nominations Announced

May 10, 2006 - Detroit MetroTimes - Out of the Groove

March 18, 2006 - Billboard - Indies in a bind

January 16, 2006 - Los Angeles Business Journal - Slipped Discs

January 6, 2006 - Los Angeles Times - Indie record stores doing slow fade out

December 26, 2005 - Los Angeles Times - The Music Stops for Indie Shop

December 1, 2005 - Rolling Stone - Fall Sales Dry Up

October 13, 2005 - Desert Sun - Music snobs rejoice: Independent record stores still thrive in desert

September 12, 2005 - Salt Lake Tribune - Twilight for Starbound Records

August 18, 2005 - New York Post - Oldies are now singing a new tune - Music stores go digital

July 2005 - Rolling Stone - Record Biz Still Sinking

June 18, 2005 - Billboard - NARM Noms Announced

March 21, 2005 - CMJ - Hart of the Matter

February 16, 2005 - MSN - Genius Loves Company

October 12, 2004 - Rolling Stone - Wal-Mart wants $10 CDs

July 10, 2004 - Billboard - Almighty Institute To The Rescue

January 14, 2004 - Creative Loafing Charlotte - Manifest Destiny

December 29, 2003 - New York Times - on the rise of mass marketers

November 13, 2003 - Rolling Stone - Best Buy snags rights to band's new DVD

October 9, 2003 - USA Today - Best Buy wins sales rights to Rolling Stones DVD box set

October 6, 2003 - Reuters - Stones Paint It Black For Retailers

May 31, 2003 - Billboard - Retail Track

May 9, 2003 - Hits - Rerap





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