Rock Gods or Parodies?
Already the largest retail chain and the biggest record store in the country, Wal-Mart apparently is looking to become the largest record label in the country.
Wal-Mart has locked up the biggest classic rockers of the seventies and eighties. In the United States alone, the Wal-Mart exclusive release of the Eagles 2 cd set “Long Road Out Of Eden sold over seven million five hundred thousand copies. The company then managed to take veterans Journey (without their original singer Steve Perry) back to gold status, as they sold over six hundred thousand copies of “Revelations.” Then, Wal-Mart landed AC/DC and sold over 2 million copies of “Black Ice.”
Now, the retailer plans to release Kiss’s “Sonic Boom” on October 6, 2009. Foreigner is releasing “Can’t Slow Down” on September 29, 2009. Wal-Mart is also rumored to be releasing the next Aerosmith CD.
Since millions of baby-boomers frequent Wal-Mart, it is shrewd strategy to market classic rockers at their customers. Many customers of Wal-Mart do not keep up with the world of music, but are intrigued by huge impulse displays of the bands they listened to in their youth. When baby-boomers think of AC/DC or Kiss, they often recall some of the best times of their life and nostalgia leads them to purchase the CDs. Of course, all of these bands still have large fan bases and although many of their fans may resent the band dealing with one corporate company, they will still go to Wal-Mart to purchase their favorite band's new release.
Wal-Mart also makes the deal sweeter because they cutout the middleman (the record label) and can sell the CD at a low price, usually around twelve dollars. Journey released their CD as a 2-record set which included a CD of new material and a CD of Journey classics rerecorded using their new lead singer. Foreigner uses that strategy, but takes it a step farther, as they include a live DVD as well, making it a three disc set for twelve dollars.
Kiss’s “Sonic Boom” will also have a disc of new material, a disc of rerecorded classics, and a live DVD for twelve dollars. So the bands are likely to attract new young fans just because of the cheap pricing strategy and the highly visible merchandising placement. The cds are usually placed at the front of the store in high traffic areas and are highly visible.
Wal-Market cross-merchandised AC/DC CDs with other AC/DC merchandise, such as t-shirts, and placed promo signs featuring AC/DC throughout the store. Wal-Mart plans to have Kiss Korners inside their stores, which will feature Kiss CDs and other Kiss paraphernalia. The addition of merchandise sales other than CD sales adds money to both the bands and Wal-Mart.
Being the first big name to sign an exclusive deal with Wal-Mart drew a lot of criticism to the Eagles. Eagles member Don Henley defended the decision, "You would have thought we made a deal with the devil. We caught plenty of flak. Some of my environmental friends are a little upset because we made this deal. But on the other hand, I have a direct line now to the CEO of Wal-Mart. We're certainly making our feelings known in terms of ecological stewardship and some of the practices of big business that are undesirable and wasteful."
Many metalheads thought AC/DC sold out by dealing with Wal-Mart. They resented it, but went to Wal-Mart and bought the CD anyway. As more bands do it, the fear of being labeled a corporate sellout dwindles as the process of selling a CD exclusively through Wal-Mart becomes socially acceptable for rock bands.
There are many advantages to a band selling a CD exclusively at Wal-Mart. Russ Crupnick, president of NPD Music, a division of the NPD Group, which does market research, said these types of promotions are both smart and safe.
“The CD business is dropping pretty precipitously,” he said. “When acts can get what they can get from retailers with that level of promotion, like in the case of Wal-Mart, the potential uptake is a whole lot more valuable than any risk. It’s becoming more and more of a habit.
“The other thing it does, it tends to create traffic. That’s what retailers in music are looking for. Traffic level is down. Overall if you put an album out, they’re not going to get on radio. Radio won’t promote them anymore. So they have to look for promotion in a different way.”
Other companies, including Best Buy and Target, are getting involved in the exclusive game, but many bands figure if they are going the exclusive route, they may as well go with the biggest retailer and record store in the country. Will Wal-Mart someday have their own label? It’s hard to say, but the exclusive deals have evolved rather quickly and was something that industry experts did not anticipate ten years ago. It’s really hard to say what will happen in the next ten years.