"The middleman's cost that was eliminated was also eliminated for the people," Brooks said. "To get a box out like that for $25 just shows me that these guys are not just eliminating the middleman and keeping the middleman's money — that makes me feel very good."Brooks may feel good about it, but I doubt that feeling is shared by the record labels (aka, "the middlemen"). And its a feeling that is familiar to many in other product categories.
"It's analogous to the way they want to deal with their vendors — they want to deal directly and cut out the middleman, whether it's widgets or Rubbermaid, and now they're doing it with stars," said Nelson Lichtenstein, a professor of history at UC Santa Barbara and editor of "Wal-Mart: The Face of 21st Century Capitalism." "Whatever they touch they transform, because they're so big and they have such tremendous market clout and power."The question is, could Wal-Mart apply the concept of private label to music -- could they, in short, become a label themselves? And the answer is -- you bet they could! In fact, some estimates are that, in country music at least, Wal-Mart accounts for 50% of sales.
The scariest thing for the labels is that Brooks, who is no longer a real hot name in the music biz, sold this Christmas like the biggest star around -- the boxed set sold a million copies in fifteen days.
The initial sales — near-record numbers for a multi-disc set — concern some music industry executives, many of whom would not speak on the record for fear of alienating Wal-Mart, their biggest customer.Of course, if you're your own label, that means you do your own promotion:
"If a retailer is going to spend $10 million on an effective ad campaign, there's a huge upside for the artist," said Gary Borman, who manages [Faith] Hill and other artists.As if news hasn't been bad enough for the labels and distributors.
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