Grociers undercut the music competition
YOU have to hope that Westlife will be buying all their Christmas presents at Tesco. It would be the right thing for the band to do, to thank the supermarket chain for all it’s done for them, especially in the last couple of weeks.
Without Tesco and the other supermarkets who sell music in the same way as they sell detergents and stain-removers, it’s highly unlikely that Westlife would have sold more CDs in a week than Oasis, The Beatles and U2.
The supermarkets will play a key role in the coming weeks as the seasonal music wars kick off in earnest at a retail outlet near you. Between now and the end of the year, CDs and DVDs will be purchased with greater gusto than at any other time. The next four weeks will decide many things, from whether your favourite Irish band gets dropped by its major label to the share-price of the biggest music companies in the world.
Greatest hits, big sellers from earlier in the year and evergreen compilations will be stacked high in shop aisles and on walls as every label battles for a share of the Christmas pie. It will have a knock-on effect on media sectors as well, as every record label and retail outlet tries to buy the space and airtime to flog its wares. Radio stations simply don’t have enough slots in the day to cope with the amount of advertising coming their way.
At this time of the year, it does seem as if everyone in the music game is a winner. But when January comes and the business of selling and branding tomorrow’s U2s and Westlifes begins all over again, it’s a different story, especially in the supermarkets. Chances are your local Tesco, the one where you’ll find CDs cheaper than at any other store in the neighbourhood, will have little interest in or enthusiasm for stocking the Cold War Kids or Bonde Do Role or any of the other millions of next big things warming up on the sidelines for 2007.
Once those bands make a breakthrough elsewhere and once everyone else has made an investment and leap of faith, the supermarkets will jump onboard – provided, of course, the dealer price and sales terms are right.
Having really only began to sell music from about 2000 on, the supermarket sector now accounts for one in four of all CD sales. It’s a sign of the times, as punters abandon traditional music retailers in favour of picking up a CD along with their cornflakes and frozen pizzas.
Of course, it’s easy to see why so many in the music industry welcomed the arrival of the supermarkets on the scene. This is the same industry, after all, which facilitated giving away free CDs with newspapers in return for a few quid for the bottom line. Most of the labels and distributors were not going to turn away someone who wanted to sell CDs. This wasn’t like MySpace or YouTube, but something even the chairman could understand.
For the supermarkets, record companies are up there with wholesalers and warehousemen as just another supplier to be dealt with in the swiftest and most profitable manner possible. Unlike traditional music retailers, supermarkets have no interest in breaking and supporting new bands, but the music industry never thought this was a problem.
Because rampant shorttermism is now the way of the walk in the corridors of record companies, no one thinks about the long-term implications any more. All the catalogue pimps want is cash and they want it now. The foresight to realise why music is in such demand from telecommunications and technology companies (and how this can be exploited) is just not there any more.
It’s probably too late now. Shoppers have become accustomed to buying their CDs at knockdown prices when they go to Tesco. If the local labels pull the distribution plug, the supermarkets will ship in the CDs from another territory.
Westlife may have won this week’s supermarket sweep, but it’s the record labels who are the real loss-leaders in this campaign.