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Wednesday, July 27, 2016

Warner Music No Longer Selling To Small Record Stores


Written by Bobby Owsinski — As if they didn't already have it bad enough, mom and pop music shops have been dealt yet another blow with the news that Warner Music will no longer allow direct accounts with stores which do less than $10k in business with them each year.

In another blow to the mom and pop music store, Warner Music has cut off more than 100 accounts that do less than $10,000 in business per year with the company, according to a post on Pitchfork. That means that in order to have a direct account with Warners to get the best pricing, a store must now do a minimum of $10k per year.

Small stores that can’t hit that limit will still be able to sell Warner products, but it will cost them more, as they’ll now have to purchase from a third party instead. This extra cost will inevitably be passed on to the customer.

The music business, especially the major labels, have always undervalued small retailers, favoring large chains back when they ruled, to the megastores of Walmart and Target today. That said, the lifeblood of the industry has always been the small local retailer, where many artists get their starts with their self-made products.

Today the local record retailer is mostly in the vinyl business, as CDs have fallen deeply out of favor. That said, not all of the accounts shuttered by Warners sold vinyl, and according to the company, about a third hadn’t ordered any in about a year. The company also said that not all were record stores and that some, in fact, were museum gift shops.

Many small record stores who made the cut are nonetheless shaken, and fear that the minimum sales level will continue to rise. If that’s the case, it would put many stores out of business, an ironic self-fulfilling prophecy where the industry complains about not enough sales, but willing buyers can’t find a place to browse product and make the purchase. The same thing happened with the CD, which could have had a much more gradual decline than it’s experiencing had there been more stores with available product. The same might happen again in the vinyl world.

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