Big Stores Ink Exclusive Deals To Attract Music Buyers

By | January 4, 2004 at 12:00 AM

Serious record collectors generally do not flip through the CDs and DVDs at Wal-Mart, Best Buy or Target. The music departments in those stores are mainly known for offering a narrow selection of chart toppers.

But increasingly mass merchandisers and electronics retailers have become the place to go for music that cannot be found anywhere else. That is because many big-name artists with new releases to promote do not just turn to their labels, they also strike exclusive deals with major retailers.

In this holiday shopping season, for example, an extended version of Rod Stewart’s new CD, “As Time Goes By… The Great American Songbook Vol. II” is available only at Target; Wal-Mart has an exclusive special release of Britney Spears’ new CD with links to additional tracks online; and a Rolling Stones concert DVD is only sold at Best Buy. Earlier, Target offered a $7 Bon Jovi CD featuring some live and acoustic versions of songs from “Bounce.” The full album was released widely to retailers at the same time.

Exclusive deals have not been restricted to brick-and-mortar retailers. customers who bought “Afterglow” by Sarah McLachlan before its release could immediately listen to some of its songs through a system on Amazon’s Web site. Now that the CD is available, Amazon customers who buy it have exclusive Web access to remixes of some of McLachlan’s songs.

The exclusive deals are being offered as mass marketers are seeing their share of the music business grow. Discount stores like Wal-Mart accounted for only 13.5 percent of music sales in 1994, said Clark Benson, the chief executive of the Almighty Institute of Music Retail, a Los Angeles-based company that sells data about retailers to record labels. This year the figure is 34.8 percent.

For the retailers, the deals are as much about using the artists’ appeal to lure customers as they are about selling CDs and DVDs. For the musicians, the deals are less about sales than about promotional campaigns well beyond anything offered by record companies even in their glory days.

But not surprisingly, the exclusive arrangements irritate other music retailers, particularly independent and regional operators who lack the power and money to cut deals.

“To me it’s obnoxious,” said Michael Dresse, chief executive officer of Newbury Comics, a 24-store chain in New England. “We’re kind of being picked off, one artist at a time, by the mass merchandisers who aren’t interested in music. They just want to use the power of a band to drive more feet through their doors.”

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