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Rockers are teaming with chain stores and changing the way records are sold - 'People are finding new ways to do things'

UNION-TRIBUNE POP MUSIC CRITIC

November 16, 2008


CRISTINA MARTINEZ BYVIK
/ Union-Tribune
Attention shoppers!

If you want to buy “Black Ice,” the chart-topping new album by Australian hard-rock legends AC/DC, there are 3,500 stores across the nation where you can get it at the bargain rate of $11.98.

Not coincidentally, all of these stores are part of the Wal-Mart chain. The world's biggest company, with revenues of $374.5 billion last year, Wal-Mart is exclusively selling both “Black Ice” and the new interactive video game “AC/DC Live: Rock Band Track Pack.”

Not to be outdone, “Chinese Democracy,” Guns N' Roses' first studio album of new songs in 17 years, will go on sale Nov. 23 exclusively at Best Buy's 1,000 national outlets for $11.99 per CD. A double-vinyl record version of the album will be available for a few dollars more. It includes a free, one-click download of all the tracks on the vinyl album in a digital MP3 format.

These partnerships, part of a growing trend, represent a key way the embattled record industry is changing the way it markets major albums by top-selling acts. Unless, that is, those acts aren't signing exclusive retail deals that usurp the record companies altogether. The Eagles and Journey, neither of whom currently have record contracts, scored recent hit albums with CDs available only at Wal-Mart and its Sam's Club affiliates.


BRUCE K. HUFF / Union-Tribune
AC/DC's new album is available only at Wal-Mart stores, where it sold 784,000 copies in one week.
Last week saw the exclusive releases of Christina Aguilera's “Keeps Gettin' Better: A Decade of Hits” ($9.99) at Target stores only and The Police's “Certifiable” ($24.99 for a two-DVD/two-CD live set) at Best Buy only. AC/DC's “Black Ice,” which was released late last month by Columbia Records, sold 784,000 copies in its first week at Wal-Mart, making it the 35-year-old band's first album ever to debut on the U.S. charts at No. 1.

“It's amazing that you can release your album through just one chain and still have it be your biggest album ever,” said guitarist-singer Kevin Jonas of top teen-pop band the Jonas Brothers. “But people are finding new ways to do things.”

People like the Jonas Brothers. The group's current album, which is available at numerous competing chain and independent stores, is also being sold in expanded form with “exclusive bonus tracks and video content” at Wal-Mart.

Marketing excess

For bands eager to take advantage of all options in a rapidly changing music world beset by uncertainity, such exclusive deals are welcome, even bands with the rebellious image of Guns N' Roses.

“Chinese Democracy” will be marketed by Best Buy in close collaboration with Guns N' Roses' record company and Front Line Management company, which was recently bought by Ticketmaster.

Front Line's roster of artists also includes The Eagles, Aguilera, Journey, Jewel and others. The company is headed by Irving Azoff, one of the most powerful and foresighted mavericks in the music industry. He was instrumental in engineering the exclusive album retailing deals for several of his clients, rather than negotiate new contracts for them with any of the faltering major record companies, few of which can still afford to mount the extensive promotional campaigns that were once the norm.

“With the downturn, the labels couldn't match the marketing commitments that Wal-Mart could make,” Azoff told The New York Times earlier this year. “It was well in excess of anything a label could do.”

Eager to promote the fact that it is the only chain to carry the much anticipated Guns N' Roses release, Minnesota-based Best Buy is sparing no expense.

“We'll be using all the tools we have, which include billboards, radio, viral advertising, our Internet site and our (newspaper ad) inserts, which hit 60 million homes every Sunday,” Gary Arnold, Best Buy's senior entertainment officer, said from his Encinitas office.

“We also have 165,000 employees that will help spread the word to all of our customers that there is a new Guns N' Roses album. People are very anxious to hear the music, so this is clearly an important part of music history.”

But the reasons have less to do with music, or with the many years it took for “Chinese Democracy” to finally be completed, than with the marketing of a select group of major releases – almost all of them by long-established acts – at a time when album sales continue to plummet and record stores perish.

More than 3,000 record stores have closed since 2002, while more than 5,500 record company employees were laid off between 2000 and the middle of last year. The void is being filled, in part, by Wal-Mart and Best Buy, the nation's two largest retail outlets for recorded music, which now account for an estimated two-thirds of recorded music sales.

These chains typically carry far fewer titles than most independent stores, but sell them at greatly discounted prices – sometimes as low as $5 per album and rarely higher than $11.99 – that independent stores simply can't afford to match.

Lou's Records is San Diego County's largest independently owned record store. Its stock of 40,000 album titles exceeds that of Best Buy, whose approximately 2,000 album inventory is considered to be one of the deepest of the big-box stores.

Lou's is carrying German import copies of AC/DC's “Black Ice,” priced at $13.99 each. But M-Theory in Mission Hills, another leading area indie record store, is not.

“We could go to Best Buy and pick it up and sell it here, but we choose not to support that album,” said Heather Johnson, M-Theory's co-owner. “We also discussed getting import copies of 'Black Ice,' but decided that if we weren't being supported by the artist, we didn't want to support the release.

“Fortunately, it doesn't impact us as much, because AC/DC and Guns N' Roses aren't our main sellers. But, in general, it's pretty awful. Any exclusive, whether it's at Wal-Mart or on iTunes, has a big impact. We don't get the sales and the artists don't get the support of indie stores. We're part of a coalition of 32 independent record stores in the U.S. and most of them have pulled all of their AC/DC albums.”

It's only rock 'n' roll

The decline in stand-alone record stores helps Wal-Mart and Best Buy to draw music-craving customers – especially the many baby boomers who do not share their children's preference for acquiring music (legally or otherwise) in digital form online.

“Five years ago, the biggest problem the record business had was that people were downloading music for free,” said Rob Levine, Billboard's executive editor.

“That's not the biggest problem now. But it caused the biggest problem, which is that if you want to buy CDs, there is nowhere to buy them. In cities, you see that there are still some independent record stores, but that's an urban phenomenon for a relatively small amount of people. For the majority, the biggest stores are Wal-Mart, Best Buy and Target, and – online – Amazon.com and iTunes. There really is nowhere to physically shop for (recorded) music.”

Music represents just a part of Best Buy's inventory, which features computers, software, cameras, video games, home appliances, car stereos and iPods and MP3 players. Even so, the company counts The Rolling Stones, Tom Petty & The Heartbreakers, Justin Timberlake and – more recently – Elton John and The Beatles among the superstar acts it has partnered with for exclusive album and DVD releases.

“Entertainment and music is where we engage with our customers at the earliest possible stage,” Best Buy's Arnold said.

“Music gets people coming back, week after week, and while they are in Best Buy, they evaluate (other products) they want in their life at another point. We work with a lot of different artists and styles of music. We carry CDs by local bands and we have programs to develop new artists.”

To promote “Black Ice,” Wal-Mart has created elaborate AC/DC Rock Again displays – a “store-within-a-store” – at all of its U.S. locations. They offer AC/DC posters, hoodies, nearly a dozen different AC/DC T-shirts, all of the band's previous albums and DVDs, along with a play station for customers to try out the new “AC/DC Live: Rock Band Track Pack” video game.

But Wal-Mart, which mounted an extensive AC/DC marketing campaign, doesn't need to rely on music to draw customers. This point is reinforced by the AC/DC Rock Again page on Wal-Mart's Web site, which promotes not just the various band-related merchandise for sale, but also Mountain Dew, Doritos and Amp energy drinks. Its advertising slogan: “Down a Dew. Grab a bag. High energy. Save a bunch. Rock 'n' Roll.”

“For an exclusive album release to work for any retailer, these bands need to be well-established and have their own large following,” said Melissa O'Brien, a Wal-Mart spokeswoman. “And we know them, because our customers vote every day with their wallets about what their favorite bands are.

“Certainly, we are a one-shop stop and people know us for that. For this particular album, it's the value that keeps them coming in and coming back, including (for) groceries. We knew AC/DC was a perfect band for us to incorporate all these different elements. Not only were they one of the top catalog album sellers for us every year, but their licensed T-shirts have been at the top of our retail sales.”

In previous decades, famous rock musicians would suffer a loss of credibility by teaming up with major chain stores. But no more.

“Wal-Mart . . . can't possibly be worse than a major record label,” The Eagles' Don Henley told Billboard last year. “This is just the world we live in, and there aren't many places where 60-year-old men, no matter how good their record is, can get this kind of promotion and widespread retail coverage.”

Industry analysts hail the success of big bands whose music sells well at chain stores as proof that the album as we know it may not be dying after all. Maynard James Keenan, the lead singer in Tool, is less certain.

“Who knows how we'll release the next Tool album? Only on vinyl?” he mused.

“Time will tell. Maybe we won't release anything. Maybe we'll just go on tour and you'll have to come hear the songs live.”


George Varga: (619) 293-2253; george.varga@uniontrib.com

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