For Those About to Shop (We Salute You)
by John Paczkowski
Posted on August 18, 2008 at 8:50 AM PT
Guess AC/DC and Garth Brooks have something in common after all. They’re both Wal-Mart-only artists. When AC/DC’s new album, “Black Ice,” arrives at market on Oct. 20, it will be sold exclusively in the U.S. at Wal-Mart and Sam’s Club.
The deal is an interesting one, and for a number of reasons. Unlike Brooks–or The Eagles or Journey, who have similar pacts with Wal-mart–AC/DC is still under contract to Sony (SNE) BMG’s Columbia Records. By inking such a deal, Columbia almost certainly risks alienating other retailers, who can’t be happy to see AC/DC’s first album of all-new material in eight years become a Wal-Mart exclusive. Among those retailers: Apple’s (AAPL) iTunes Music Store, where AC/DC has so far refused to distribute its music.
The deal also comes at a time when Wal-Mart and other big retailers are reducing their CD shelf space. It’s been estimated that Wal-Mart, Circuit City (CC) and Target (TGT) have cut between 5 percent and 23 percent of their CD inventory in the last two years. Which means that retail exposure, which was once a given for many bands, is becoming increasingly dear. So much so that it’s a negotiating point, and–in Wal-Mart’s case–enough of one for big-name acts to justify allowing the retailer to sell their new releases on an exclusive basis.
“Shelf space has shrunk so much over the last five years that for anyone to give you shelf space and exposure is a big deal,” Terry McBride, chief executive of Nettwerk Music Group, recently told the New York Times. “Should the labels be worried? There’s been a move away from the labels for a number of years now. And it’s not necessarily their fault. The shelf space to have those records sell just isn’t there. That’s the market reality.”
