Wal-Mart Plays the Pied Piper
By George Anderson
Record industry executives in Los Angeles, New York and Nashville, et al, are a little more than nervous about Wal-Mart’s success with the Garth Brook’s CD/DVD boxed set this past holiday season. You see, Mr. Brooks’ deal with Wal-Mart cut them out and then promptly sold one million copies in its first 15 days on the shelf.
“The middleman’s cost that was eliminated was also eliminated for the people,” the country singer told the Los Angeles Times. “To get a box out like that for $25 just shows me that these guys are not just eliminating the middleman and keeping the middleman’s money – that makes me feel very good.”
Neal Spielberg, a former exec with Warner Bros. Records, said, “There’s a huge concern that someone like Faith Hill will do a deal directly with Wal-Mart.”
Gary Borman, who manages Ms. Hill, said the music industry is in a period of transition. As to the retailer’s role in that, he said, “Wal-Mart has the might if they put their minds to it. And because the labels need them so much, they have a lot of power to demand whatever they want.”
In another move into the music business, the world’s largest middleman eliminator has launched Wal-Mart Soundcheck, exclusive musical performances and behind the scenes interviews with popular performers at studio sessions broadcast on the company’s web site and on its in-store television network.
David Porter, Wal-Mart’s vice president for movie and music merchandise, said, “I wake up and put my head on a pillow every night looking for opportunity in the music and movie worlds. We are interested in growing sales; these are important areas to our stores, and we are a growth company.”
Moderator’s Comment: Where is the retail entertainment business headed? How will companies such as Wal-Mart, Starbucks, etc. change it?
Three items related to this story.
- It’s interesting to note that, if you are a Mac user, you are out of luck with downloading tunes from Wal-Mart. What makes it especially interesting
for us is the knowledge that with the Disney/Pixar deal, Steve Jobs will now become not only a director on the Disney board but also the largest shareholder in the company.
- In a separate but not entirely unrelated note, Wal-Mart rival Tesco has set aside a separate Apple Computer section in one of its stores as a test. According
to Retail Week, it is the first time Tesco has done this for a non-food brand.
- Nice move by Gillette and its Fusion brand, which is clearly identified as the sponsor of Wal-Mart’s Soundcheck.
- Wal-Mart’s Musical Moves – Los Angeles Times
(free reg. required)
- Tesco gives Apple dedicated space – Retail Week