AfterDawn: Tech news

Wal-Mart battles for $10 CDs

Written by Ben Reid @ 17 Oct 2006 5:04 User comments (55)

Wal-Mart battles for $10 CDs Wal-mart, the United States' biggest retailer, wants every CD you buy to cost no more than ten dollars. The company, which moved a quarter of a trillion dollars' worth of goods last year, is used to getting its own way.
The store, which boasts 138 million shoppers per week, sells an estimated one in every five major-label albums. Insiders believe that it has so much power, that what it chooses to stock can basically decide what ends up being successful. "If you don't have a Wal-Mart account, you probably won't have a major pop artist," said one label executive.

Wal-Mart willingly loses money selling CDs for less than $10 to lure consumers into the store, hoping they might also pick up a DVD player or a boombox whilst inside.

But now, Wal-Mart is fed-up of losing money on its cheap CDs. It wants to keep selling them at the current price ($9.72), but it wants the recording industry to lower the prices at which it purchases them ($12) in the first place.

Last year, Wal-Mart asked the industry to supply it with choice albums at favorable prices. According to music-industry sources, Wal-Mart executives hinted that they could reduce Wal-Mart's CD stock in favour of more profitable DVDs and video games. "This wasn't framed as a gentle negotiation," said one label rep. "It's a line in the sand -- you don't do this, then the threat is this." (Wal-Mart strongly denies these claims.) As a result, all of the major labels agreed to supply some popular albums to Wal-Mart's $9.72 program. "We're in such a competitive world, and you can't reach consumers if you're not in Wal-Mart," admitted another label executive.

It is in the best interests of the music industry to keep Wal-Mart happy, because if Wal-Mart cut back on music, industry sales would suffer severely, but hardly affect the retail outlet. 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," explained another label executive. "This keeps me awake at night."

Gary Severson, Wal-Mart's senior vice president and general merchandise manager in charge of the chain's entertainment section, said "The labels price things based on what they believe they can get -- a pricing philosophy a lot of industries have.

"But we like to price things as cheaply as we possibly can, rather than charge as much as we can get. It's a big difference in philosophy, and we try to help other people see that."


One major-label rep is reported to have said, "I don't think there is a music supplier in America who really enjoys doing business with Wal-Mart."

Source:
Rolling Stone

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55 user comments

117.10.2006 5:23

i could agree that price

217.10.2006 5:30

"The labels price things based on what they believe they can get -- a pricing philosophy a lot of industries have." Yeah WalMart is fed up losing money selling their CD's for less but they won't pay their employees a fair wage.....the base starting pay is $6.50 an hour.That's being hypocritical.

317.10.2006 6:10

Prices of CD's have become crazy over the last 10 years.. You used to be able to buy a new CD for around $10-$12 (New Release)now it's crazy..

record companies complain about how much $ they loose to piracy but raising the price of goods doesn't stop the piracy and doesn't help make them any more $ either...

417.10.2006 6:16
gogochar
Inactive

Vote Wal-Mart for... President? lol Anyways, yeah, I do support Wal-Mart more than a lot of other retail stores. Why? Because they have a few cheap prices, plus, right now, it's the only thing I have right now.

517.10.2006 6:28

Considering Wal Mart forced the tunetown that was near it out of business, unless I want to buy cd's online they are the only store I can get CD's from within 50 miles. I guess I can see why the music industry is so worried lol.

617.10.2006 6:58

Wal-Mart is a king

717.10.2006 7:19

dont praise them. they always do this. its the worst thing. here is an example.. walmart told the makers of etch-a-sketch "we will no longer sell your product unless you sell it too us for a third less the price." and walmart was one of their bigest sellers next to places like toys-r-us. so the company started losing money and imidiatly outsourced to china from the usa, costing us jobs and other things. walmart has done this to many a company, and thats why they have low prices. sure it may be good for the current consumer, but what about the lost jobs? money sent to china? all of them gone and helping their economy over ours. walmart needs to die, but nobody cares to fight against them because "hey they are cheap, it doesnt effect me.

817.10.2006 7:26

Let's not get into Out Sourcing.. The Government needs to Stop Out Sourcing PERIOD!!!

917.10.2006 7:26

I remember when cds first came out and were around $25 apiece. and of course, they kept saying "well, it's a new tech, once the manufacturing ramps up the price will drop dramatically." Riiiight. How much does it cost to manufacture a cassette tape, with dozens of individual pieces and SCREWS for god's sake? How could it EVER be cheaper than a disc that costs about 3 cents to press?!

And now all the Tower Records stores are closing, I'm sure that'll get blamed on file sharing too. Jeez. People are buying less cds because the music sucks out loud and is overpriced. And why buy a $15 album when I can get the two songs I want off of iTunes for a buck apiece? It boggles my mind how we can all see this plain as day but no one in 'the industry' seems to be able to.

1017.10.2006 7:27

Wal-mart is king if you say so. But here in PA,usa there getting sued again for making people work over time and making them work thru there breaks. Last time they got sued for hiring illegals. Its a good idea tho(cd's for 10$) but you got to stupid to pay for music that is pushed out by these money hungry companys. nowadays your lucky if there is 2 good songs on the cd. There is also a DVD out that exposes wal-mart you should check it out.

1117.10.2006 7:35

If every album I bought was a tenner, I'd say thats pretty reasonable..

This message has been edited since its posting. Latest edit was made on 17 Oct 2006 @ 9:25

1217.10.2006 7:42

no one in the industry sees it because they are stuck in the past. their days of reign are turning and they are fighting it every ways they can. much like when you love someone, and they dont love you back, but you try and try to rekindle something lost. they are desparate to keep their failing moneymaker going, like sony with the walkman. and this makes them oblivious to the truth because "hey they will come back if we push them."

1317.10.2006 7:45

If Every Cd was $10 the record companies would be back to making alot of $ People would still D/L music but there are alot of people who just don't want to put out $18 for a Cd when they can just d/l the tracks they want.. Now if we could get the prices of Movies at the Box Office to go down maybe the Film Industry would stop B@^ching... in the mean time I'm still with the $1 & $2 movie theatres (Month or 2 before DVD Release Movies)

1417.10.2006 7:47

yeah, cd prices are insane either way. im a proud pirate. untill this world shaped up im going to continue. if prices were sane and more money when to the artist than some greedy a$$ white guy in a suit, i might buy a cd.

1517.10.2006 8:12
ripfuel
Inactive

$10 is not a bad price, if they will do it? I still have no plans of ever buying another CD or DVD in my life. The greedy hogs at the top will not get my $ if I can help it. It just does not make any sense to me to spend $10 or for that matter even $5 for a music cd. Hey, that's just my opinion & who am I 2 say?

1617.10.2006 8:39

If this is a way of complaining about low sales then they should sell uncensored music for a start. But if anyone could do this it would be walmart. Maybe it would also start a trend for the industry if this works out. $10 sounds good.

1717.10.2006 8:48

the truth be told that they buy in such a large amount that they should have been doing $10.00 cd for new releases years ago ... also the price of the dvd's should also come down to the same price. this would mean less people would dup the movies and just buy it striaght out. video games for any platform should not be more then $20.00 either while your at it.... its a way to have people come back either that or most people who buy their music movies and games will just start downloading them.... sad to say but true ... the cost has always been way over the top and for most clicking that bit torrent or zip file to download is just to easy not to.. but if the cost became within reality then most would buy.....

1817.10.2006 9:19

Well the primary flaw in the 'piracy hurts music sales' argument is the assumption that you would buy it in the first place--If you're not willing to pay $15 for a Jessica Simpson cd but can d/l it for free, that's not a lost sale. If you were willing to pay $3 for the same cd, then you may as well blame poor music sales on overpricing--the argument is just as valid.

1917.10.2006 10:27

who cares walmart has "clean cd " I want to hear what the singers and rappers are saying .but walmart sells R rated movies ? so i will go to other stores to get my music .

2017.10.2006 11:13

$10 is better, but I hate Wal-mart... However, I do not listen to music, so this does not affect me at all.

2117.10.2006 11:37

Companies in America are greedy these days. They have no moral grounds and could care less about the people and its workers. It's all about making money and spending very little on producing goods and service just so they can save themselves a buck or two in the long run. While CEOs of companies are laughing themselves all the way to the bank with their cash cow money buying their yachts, Ferraris, big houses, expensive Italian suites and god knows what else. On top of it, it's an insult to pay workers minimal wage to deal with the bulls**t they give us. How about trading places with an average Joe and see what it's like getting paid crap. I'm sure the stupid smirk on their face won't be there for long. The only good company I've seen so far that cares for its workers is Costco. CEO Jim Sinegal gets paid $350,000 (3x less then what a typical CEO gets paid and that's still a lot of money). On top of it, he pays his workers $17 and hour. Here's the article on this person. We need more companies like that. http://abcnews.go.com/2020/Business/story?id=1362779 Back on topic, I will never buy CDs at Wal-Mart no matter how cheap it is. Most CDs I get are with explicit content and all they sell is edited content. Sometimes I get things their but the Wal-Mart that’s nearby my area sucks so badly I don’t go very often.

2217.10.2006 11:53

Hello everyone, There's a lot of albums I did not buy since there's probably just a few tracks on it that I like. I will not pay $16.99can or $17.99can for an album with just a few tracks (5 out of 10 - 12). But honestly, at $9.72US I may buy a few more albums I would not have in the past. It may be a good thing. Sell 200 @ $9.72 Or 100 @ $16.99 My 2 cents...

2317.10.2006 12:35

low cd prices great, but where I live wallmart is crowded all the time even early or late

2417.10.2006 12:36

Agreed. In other industries, when sales (or % increase of sales) revenue decreases, usually they recognize that demand isn't as high. What do they do? Lower prices to find the equilibrium again. But with the music industry, they complain about piracy and file lawsuits instead of doing the obvious choice and lower their prices. Thank you walmart. The cost of a CD has been virtually the same price since their introduction, and that's just absurd.

2517.10.2006 12:44

Still to much. Not gonna survive in my opinion. Digital songs are the way to go. Singles or choose any 10 for $10. You get what u want. Quality of Digital music must be higher though. Imagine having a machine "similar" to an ATM. U could put a usb key in, or blank cd, pay via interact, credit card, whatever...and the songs could be copied to your medium. or of couse....online. Tell people NOT to do it or else...they will rebel, and do it. Leave them alone...you might have less people doing the wrong thing. I wouldn't take the chance on downloading movies if they didn't cost so much...but they do. Same with cd's.

2617.10.2006 13:13

the media mafiaa is protected from reality and thu dosent have to lower its prices,however Walmart as a relater has to face reality now and then and will probably have a better chance to lower the mafiaa's prices than all the consumers on the upper US content...

2718.10.2006 17:31

Finally!!!!!!!!!!!!

2819.10.2006 12:23
Thonor
Inactive

One major-label rep is reported to have said, "I don't think there is a music supplier in America who really enjoys doing business with Wal-Mart." I don't think much more needs to be said than that. "Whatdya mean we can't rip people off? It's bad for business? Huh?"

2919.10.2006 12:31

Fact of the matter is Walmart can lower prices on the CD's if they want too but they want the supplier to lower their prices 1st so Walmart ends up making the same profit in the long run... Making the mom and pop record stores go out of business in the process because they won't be able to afford to lower the prices to compete....

3019.10.2006 19:27

$10.00 a cd is still too much.Half the cd's that come out these days are less then 40 minutes long and one good song..You can buy a 50 pack of cdr's for less then 10 bucks.Hmmm not too hard to figure this one out.The music industry dug their own hole,now they should laydown.

3120.10.2006 4:43
hughjars
Inactive

I agree.

$10 is much better and starting to get more like it but it is still too high.

3221.10.2006 19:04
nos_
Inactive

i have'nt seen anyone mention that Walmart's cd's are all fucking editted. why buy a cd from them when it's been editted...like rap by eminem...just get ur drunk "butt" on that runway "beeeeeeep" lmao ya right

3321.10.2006 22:30

nos_ And not all Music cds cuss like a motherfcker no a fcking plane :P

3421.10.2006 23:37

most modern music is trash, anyway. seems you almost have to go underground to find any artists with talent or a true drive.



3521.10.2006 23:43

Auslander
since the last half of 90's I have started to like J pop alot more...even the engerigh sounds better than the new wave of poor ass music that has degraded all grenes of US music..I am a country fan BTW and look at what country has become...its all rather disgusting...posh and fake....


Copyright infringement is nothing more than civil disobedience to a bad set of laws. Lets renegotiate them.

---
Check out my crappy creations
http://zippydsmlee.deviantart.com/

3621.10.2006 23:47

i find myself clinging to deeper and darker metal, as it seems that's near the only genre left where musicians still do most of their own work and aren't just lip-syncing, cookie cutter song-buying stereotypes.



3722.10.2006 0:17

I don't care if Wallyworld sells Cd's for 5$, I'm not setting foot in a store that sells 75% Chinese products. Besides nobody goes there anymore anyway. It's too crowded!

3822.10.2006 0:47

rockjckey STOP....THINK!!! Nobody goes there because its to crowded ................................................ LOL Anyway you have a point they only have deals on 50% of their stock everything else is ether marked up or normal retail.

3922.10.2006 3:47
mitch999
Inactive

The corporate mogals in the music industry and in Hollywood should realise that $1 in the till is better than $0 in it.

4022.10.2006 6:10

Walmart sucks in every way possible, I would much rather pay more for a CD than ever even consider buying it from Wally World. I can't believe we are all willing to let such a sleezy store take over the world just because we save a few pennies. Walmart is killing small down business all over the globe, how is that okay...with anyone?

4122.10.2006 8:30
armworth
Inactive

$10 is what a CD should sell for. The price has been steadily going up over the last 20 some years. Everything else in electronics goes down in price over time. DVD players, big screen TVs - the price drops dramatically after a few years. $19.98 for a CD? No wonder sales have dropped! You tell 'em Wal-Mart!!

4222.10.2006 8:34

So how long do you think until RIAA attacks WM for "doing more damage to the recording industry than pirates ever could"?

4322.10.2006 11:50

Steve83
they have already tried to attack VLC,they wont go after MS jsut yet since MS has handicapped vister if MS dosent keep vister video and audio free then the RIAA will strike!

This message has been edited since its posting. Latest edit was made on 22 Oct 2006 @ 11:54

4426.10.2006 14:43

How can anyone blame Wal-Mart. Its the consumer who goes into Wal-Mart and spends money. If everyone who keeps blaming Wal-Mart would actually stop going there to purchase other things besides CD's maybe Wal-Mart wouldnt be so popular. In any case I will still go there to purchase my groceries. I dont hear anyone bit*hing about Home Depot, or Lowes putting local hardware stores out of business. We live in such a double standard society.

4526.10.2006 19:05

@brucezx11 I'll jump on that bandwagon...I hate all of the the giants, Walmart, Home Depot, Lowes, Target, Kohls, and all the big chain restaurants. All of them ruin small business everywhere, and quite frankly make visiting and moving to new places boring. Nothing is different from one city to the next...other than climate and landscape...Sorry to get off the subject, but you brought it up. As long as we continue to be patrons at these places, their world domination thrives, our choices diminish, and prices stay fixed or go up due to of lack of competition. Okay, I need to stop now, I could go on forever!

4627.10.2006 10:20

One more reason to love Walmart. Good Philosophy Walmart is Awesome. Everyone I know loves them, too. I just wish I had one closer to me. Soon they will, and life will be perfect. Viva la Walmart.

4727.10.2006 13:49

As evil as wlamart is it can adjust prices better becuse its on the front line this is great for persciptions and mabye for music and a few other things but the down side is whore marts everywhere with the added joy of when it leaves areas or small tons it snot going to be pretty when tis the only food/med store in the aera 0_o

4829.10.2006 18:55
Shado36
Inactive

Some pretty varied comments here! For the most part I like Walmart, I will not comment on there employee rights etc as I have never worked for them. Personally I rarely buy any music at all because I simply do not like most of what is out there! This I think is because I am not a native of this country so what I used to like at home is very hard to get here if at all! I have a varied taste in music but as a general rule I do not like whats out there. I do not want to listen to "music" where I cannot understand whats being said, every other word is an expletive or bands that ride on the coatails of others by covering there music. Its about time that the prices of cd dropped the record co's have had it there own way for far too long.
As to a remark about Home Depot & Lowes etc not caring who they put out of buisness, I think u are right, they don't give a rats ass. We have both nearby and at least two other stores have closed and the Lowes has not been open six months yet! Having been in both I would add that there service sucks, neither have enough bodies on the floor and certainly many do not know there ass from there elbow! Hardly good for customer service but to bring the thread somewhat back on track its all about the big buck and nothing else!



4929.10.2006 23:19

Shado36
Walmart is not "evil" just One sided

Good
can recreate nation wide pricing for drugs and other items.
Is everywhere.
Huge employer nation wide.



Bad
Sells to much crap from china.
Hurts small local Stores .
when it leaves a community and tis the only "store" its nto a pretty sight.
Dosent have lower prices on non china goods.
Suxy benefits for employees .



Walmart is a mixed bag they almost help as much as they hurt,but thats alot like any other corporation.


Copyright infringement is nothing more than civil disobedience to a bad set of laws. Lets renegotiate them.

---
Check out my crappy creations
http://zippydsmlee.deviantart.com/

5030.10.2006 4:32

Except in the US Wal Mart is the No 1 retailer so whatever Wal Mart does other businesses have to do the same or go out of business.


Spellcheck is a nice invention.
Using BitVomit hurts the swarm your in, get a decent client.

5130.10.2006 6:29

Only because WE give them the power!


Pamsipod

5230.10.2006 6:37

Face it, we live in a competitive market. Places like Walmart are inevitable. There will be no little man in certain industries anymore. The solution, dont blame walmart, create your own product that walmart does not sell and create your own market. Get with the times. Gas prices are high and one stop shopping is here whether you like it or not. Embrace the future. And if walmart employees dont like their pay, they can always unionize. But you can cry and moan all you want, truth is... Walmart has more consumers everyday and is growing. The only problem with walmart is that there needs to be more of them to accomadate the masses. Quit your whining and get a job.

5331.10.2006 1:18

TazmanYo So your saying that the corperations should do as they please because the world revolves around them...........

542.11.2006 12:05

Yes

552.11.2006 14:42

@TazmanYo Don't have a job, don't need a job, don't want a job. First of all, if it were as simple as creating a unique product with our own market, everyone would be doing it. Secondly, even if you are lucky enough to come up with something, they would want to carry it, and if you didn't bend to their every whim, they would develop a competing product, and put you out of business, if you did sell out to them, then they rule even your personal world....see the problem??? If you don't, then maybe you need glasses.

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