Best Buy to indies: drop dead

[cgarges]

Guys, can we please not turn this into a political debate website? If you want to get into some of this, please keep it as directly relevant to the topic at hand as possible. Thanks!

Chris Garges
Charlotte, NC

[chris harris]

well... you really can't separate the politics from what's happening here.
it's affecting the entertainment industry.
sure, the R's and D's are BOTH beholden to corporate interests. But, to try and pretend that both parties are EQUALLY as sold out to big corporations, is just as disingenuous as suggesting that the Abramoff scandal exposes corruption in BOTH parties EQUALLY. it's insulting.
and, it's dangerous to spread misinformation because you somehow think that it proves that ALL politicians are bad.
it's also dangerous to insinuate that there are only two sides to every argument and they both deserve equal consideration.

I don't want to discuss Bill Clinton. It's totally irrelevant to this discussion. but, if someone is going to lie and say that he didn't even carry his home state, as a way of somehow proving that he cheated in elections there, I think someone should call that out.

[chris harris]

the president was Bubbuh.
As for all the folks that think he was the greatest president we ever had:
He didn't carry his own state where he was "elected" to 11 terms.

really?

[cgarges]

Best Buy hasn't been mentioned in the last two pages.

I just don't want this to deteriorate into a personal politics thread.

Please.

Thanks.

CG

[chris harris]

read all about what Best Buy is doing, right here:

http://en.wikipedia.org/wiki/Predatory_pricing

it's tricky because Best Buy is taking the loss on the music in order to get people in their store and sell them other things. I think that their main motivation is to get people into the store and sell them electronics. But, running the other record stores out of business certainly helps them accomplish that.

[Professor]

Maybe it's better if Best Buy runs all those little mom & pops out of business - I mean think of what they represent. Nothing but dozens, hundreds, maybe thousands of of little capitalists all trying to profit for themselves.
What we need is get Best Buy to grow large enough that they are the only source for their products and everyone works for them. Then the government could claim eminent domain, take over the whole business, everyone would automatically be required to be in the federal unions, and there peace, goodwill, higher wages, more selection and no capitalistic tendencies because all the money would be going to the gov't who will be responsible and do good things for society with it.

-J

[chris harris]

Maybe it's better if Best Buy runs all those little mom & pops out of business - I mean think of what they represent. Nothing but dozens, hundreds, maybe thousands of of little capitalists all trying to profit for themselves.

obviously, you've never known anyone who attempted to run and independent music store. I know 3 store owners in OKC/Norman and not one of them are in it to get rich.

What we need is get Best Buy to grow large enough that they are the only source for their products and everyone works for them.

don't think that that's not what they're after.

[lsn110]

Ok...a back on topic thing.

I haven't bought anything from a local retailer in a while. In part, that's because my local store usually doesn't have the new release that I'm looking for. They tend to have a lot of vinyl and used CD's and a smattering of new stuff.

So what are my options...

1. Drive further to buy from further flung mom & pop retailers.
2. Order from independent mail order houses.
3. Order direct from the band (when possible).
4. Buy from BigBox.
5. Join eMusic and forget I ever bought physical CDs....

The truth is, I do a combination of the above. As for Best Buy undercutting...What some folks here may not see is that there are parts of America where there isn't a good local retailer to buy from. Some kid may walk into a BB in suburban hell and see the DangerDoom or Cat Power CD and give it a chance because it is so cheap.

Do I agree with the loss leader model? Well, frankly, why not. Pull out a Warner Bros. release from the early 70's. This is nothing new...they even called them loss leaders. It gave exposure to lesser known acts. I guess the difference here is that the labels aren't in control. Still, as far as I can tell, they aren't losing money, nor are the artists.

I see the download retailers as a much bigger threat to small store livelihood in the short term. I recently joined eMusic, and I haven't bought a physical CD in 2 months. I realized that all I did was file the CD once it's ripped. I've gotten over the "I need something tangible" compulsion VERY VERY quickly.

I can see a day where CDs/Vinyl are, again, the exclusive domain of mom and pop retailers...if they can hold out that long. At some point downloading sales will supplant CD sales. At that point, I could see big box stores opting to use the space that CD racks are in to sell some other whiz bang doo-hickey, while having a kiosk to download records in place of it. CDs will go the way of vinyl. It'll be around, but it will become an audiophile/collector format.

[Professor]

But thanks for the Wikipedia link. Here's a blurb from right at the top:

In many countries, including the United States, predatory pricing is considered an anti-competitive practice and is illegal under antitrust laws. However, it is usually difficult to prove that a drop in prices is due to predatory pricing rather than normal competition, and predatory pricing claims are now quite difficult to prove due to high legal hurdles designed to protect legitimate price competition.

If I recall correctly from that original article, wasn't the $7.99 BBY price just an introductory, one weekend, sale event that was quickly replaced with a standard $12.99 price?

That aside, a sudden thought struck me. What about another industry or field that is close to many of us - recording gear.
Let's say you want to get yourself an Alesis Masterlink which has an MSRP of $1599. How many of you out there would go to your local mom & pop, have them order in the product and pay full retail or maybe 10% under vs. going to GC to get it for $999, or hopping online to find it for $850 somewhere? And if you don't like that particular piece of gear, make it whatever, a new guitar or amp or keyboard or microphone, but something over a couple hundred dollars where the pricing is really significant.

-Jeremy

[Professor]

obviously, you've never known anyone who attempted to run and independent music store. I know 3 store owners in OKC/Norman and not one of them are in it to get rich.

So it doesn't matter if they profit?

Hey I know everyone wants to say that they're only in it for the love of it, but if they've opened a store and are trying to earn a living from it, then they are very interested in the money. Believe me, I'm one of those idiots who got into the music business for the money - this is where I earn a living. Yeah I do it because I enjoy it, and I'm in it for the "love" of what I do, but if the money wasn't there then I would be here either. And there is lots of "predatory pricing" going on in the recording business where guys that don't have the same expenses or investments are pricing lower to put their competitors out of business. Sure, they're just in it for the love and they may not be 'intentionally' trying to put other places out of business.

-Jeremy

[kayagum]

OK, since I was the one who started this topic, maybe I need to frame it better.

How analagous is this situation (big box vs indie record store) with the studio world? the gear world?

Do any of you care or factor this debate in when you decide what, from whom, and how much you're willing to pay for something?

Do you buy your stuff from big retailers (e.g. Musicians Friend) or from a local or boutique dealer?

Is Mackie going to control the universe, and squeeze boutique builders out of business with their hardware?

Is Digidesign going to control the universe in the DAW kingdom? Will open source development someday peck at ProTools the way Firefox is pecking away at Internet Explorer?

[chris harris]

I'd rather go to Best Buy than a fucking Guitar Center. They both have ridiculous turnover of staff. That means that 2 things are likely:
1. the staff won't know shit about the products they sell
2. the company probably doesn't treat their employees well.

number 2 keeps me out of both stores. but, I'd rather go to Best Buy than GC because I don't really need the Best Buy people to be knowledgeable about the $8 cd they're trying to sell me.

I'm sure that we all buy a lot of gear here... I've decided that it's just not worth the hassle and aggravation to save 10% by shopping at Guitar Center.
When I go to the local music shop, they know my name and know how much I spend on gear. I don't have to haggle. I don't have to justify deserving a discount. GC has a new "dude" behind the counter every month and a half. New "dude" treats me like a new customer, unless I go through the ridiculously uncomfortable process of explaining to the new "dude" that I'm a long-standing customer who is accustomed to getting good deals.

Actually, I take back what I said about not caring whether or not Best Buy "dude" knows anything about the music that he sells. My local indie record store turns me on to new music all the time. The people there know what I buy. They know what I'm likely to be into.

That's just how I prefer to do business.

Suppose I have a mastering business. Suppose I'm really, really good and make a killing. But, then, I decide that I need to expand and figure out a way to get more bands in there. So, I open 4 tracking rooms. I hire 4 semi-knowledgeable college students to "engineer" there. I pay them minimum wage. I equip all 4 rooms exactly the same. I "train" my engineers (in the 4 hour orientation) to use the same signal chain every time they record drums, just to save time. The results are less than mind blowing. But, since I make so much money from mastering, I can afford to take a loss and only charge $5/hour for my recording rooms. Then, I can try to sell the bands some mastering services to try and improve their generic recordings.

None of this is illegal. But, just because something is legal, doesn't mean that it can't be WRONG.

Who cares if it runs the other 90% of studios in town out of business, right?

[chris harris]

obviously, you've never known anyone who attempted to run and independent music store. I know 3 store owners in OKC/Norman and not one of them are in it to get rich.

So it doesn't matter if they profit?

Hey I know everyone wants to say that they're only in it for the love of it, but if they've opened a store and are trying to earn a living from it, then they are very interested in the money.

I said that they're not in it to get rich. And, you're arguing with an imaginary person who supposedly suggested that it doesn't matter if they profit.
again, I never suggested that they don't want to make "a living" or "profit" from their businesses.
all three of the owners that I know make enough money to eat and provide shelter for themselves and their families.
I'm sure that they could all make decisions that would make their businesses more profitable.
2 of the 3 have degrees that could be earning them more money elsewhere. The point is, they don't put money as high on their life's priority list as you apparently do.

[Professor]

Sorry, I guess I didn't realize you consider "getting rich" different from "profiting" from a business. I made the mistake of considering "profit" to mean "excess revenue beyond expenses" which is usually a means towards "building wealth" for a business owner. I could see where that's different from "getting rich".

Either way there's still really no reason for them to complain about Best Buy, is there? Or do they even complain about BBY? Maybe they don't and that's just their customers.

I mean, it sounds like you know three guys who are happy living on subsistence wages. I find that hard to believe, but if you say so, sure I'll believe that's what makes them happy.

You're right that I care about money. I like to eat too. And I don't like to worry about whether I'll be able to eat tomorrow. So I wouldn't go and start up a 'break-even' or money-losing business venture. Or at least if I did open one, and did so just for the love it, I wouldn't complain about the competition.
But that's just me. I also don't believe in hating the wealthy and wanting to take from them so I don't bad about being poor. Someday I'd like to be wealthy and would like the opportunity to be there when it's my turn. I may never succeed, but I want that to be my fault and not something that happens because building wealth is forbidden by anyone else.

-Jeremy

[chris harris]

yeah.. strangely enough, some businesspeople care about more than figuring out a way to screw the other businesses on their way to taking their "turn" as the rich guy.

sorry if it's a confusing concept. but, many of the business people that I choose to do business with have, along the way, made decisions that would cost them potential profit. some of them actually feel a responsibility (gasp!) to the community where they make their living.