The Wake

Satisfaction. The Rolling Stones can’t get it, and now they won’t give it, either. Thousands of record stores that have carried the Stones’ music for years are being denied distribution rights to the hottest new Stones release in years. The band has decided to release a new DVD box set exclusively to Best Buy for the first four months it’s available. As a retaliatory response, many stores across North America are pulling all Rolling Stones merchandise from their shelves. These exclusive alliances between distributors and retailers are making for a very uneven playing field, many retail analysts say, and are questioning the new trend.

Four Flicks is the Stones’ new four-disc DVD set that documents three live shows from the band’s 2002-2003 “Live Licks” tour. It contains more than five hours of footage, including some never before recorded material.

At least one million copies of the DVD will be sold in North America, according to the Almighty Institute of Music Retail, a California-based music-marketing firm. Sales of past albums, however, suggest that this figure could be even higher. The Stones’ “Forty Licks” album went multi-platinum in 2002, after it sold roughly four million copies in the United States alone, according to the Recording Industry Association of America.

Best Buy, one of the larger music retail chains in North America, stands to make as little as $30 million and as much as $300 million in revenue from the exclusive deal, the RIAA expects. More than 100,000 copies of “Four Flicks” were sold on its release date of Nov. 11th alone, which brought in almost $3 million to Best Buy’s 700-plus stores.

Being neglected from such a paramount release has left many record stores agitated. Three large Canadian chains have pulled all Rolling Stones merchandise from display and are furious over their exclusion from the exclusive.

“If our customers aren’t good enough to have access to their new release in our stores, then maybe (the Rolling Stones) aren’t worthy of having any products in our stores,” Humphrey Kadaner, president of HMV Canada told the Associated Press.

The decision to pull merchandise, however, could prove to hurt HMV more than it will help it. HMV has more than 100 stores across Canada, and stands to lose approximately $750,000 (US) in sales between now and Christmas, according to the company’s figures.

Music World and Sunrise Records joined HMV in adopting this new militant policy on the removal of Stones merchandise. Sunrise Records head buyer, Tim Baker, dislikes the fact that his company’s years of loyalty to the Stones have been completely disregarded.

“What have these guys become?” said Baker. “We’ve been supporting the Rolling Stones for decades and loyalty is a two-way street. To do something like this just smacks of greed.”

George Benson, of the Almighty Institute of Music Retail, said the turmoil that the release has created is not a surprising.

“All you have done is hurt every other music retailer,” Benson said.

Hurt is the last thing independent music retailers need during this trying time for the music industry. Amidst Internet piracy and consumer backlash from the RIAA lawsuits against file-traders, many stores are finding it more and more difficult to stay afloat. More than 1,100 record stores have closed in the US this year and music sales fell 11.7% to $5.1 billion during the first half of 2003 compared with same period in 2002, according to the institute.

While exclusives of this magnitude may hurt independent retailers, they are not an entirely new phenomenon. These profit driven alliances between big selling artists and retailers have been an increasingly popular practice in the music industry for the past several years. Target had an exclusive split CD with Justin Timberlake and Christina Aguilera this summer to promote the “Stripped” tour. Best Buy itself has also been sealing exclusive deals with big artists like Sting, U2 and NSYNC since early 2000.

While there wasn’t as much competitor outcry over these previous exclusives, the Stones DVD is unprecedented in its perceived market value. Never has a music or film exclusive been this big. Best Buy realizes this and has no mixed feelings. Best Buy representative, Brian Lucas of Minneapolis, said that the Stones chose Best Buy over other retail chains for a number of reasons.

“They decided to work with us because of our massive marketing effort, plus the $29.99 price was less than others had proposed. The Stones said it would have cost at least $30 more for the consumer if they would have chosen someone else based on the proposals,” said Lucas.

Best Buy’s ability to provide such low prices is what makes it one of the most dangerous competitors to other retailers. Stores like Best Buy and Target control 55% of all US music sales. They sell such large quantities of music that they are able to strike deals with labels that lowers their cost to a price never granted to smaller independent stores.

While many independent music retailers felt left out of the excitement, and more importantly the profits, some local stores didn’t think of it as such a big blow.

Know Name Records in Minneapolis has sent some Stones merchandise back to the distributor, but kept the main albums, which they think they will sell.

John Worm, a manager at Cheapo in Minneapolis, said that they would not be pulling any Stones albums off the rack. He said that Best Buy definitely hurts Cheapo in some ways, but he doesn’t think the Stones exclusive will be that devastating.

“If we were a bigger chain, I could see why we might pull their stuff. It might cause a ruckus, but I don’t see it being a big deal for us,” said Worm.

Worm also said he isn’t surprised by the nature of the deal, based on the history of the music industry.

“Labels have been the devil of the music industry for 30 years. Corporations and labels are always selling their souls to each other, but not to the point where we’ll boycott.”