WalMart Music Distributor Calls It Quits

bad news? good news?

June 4, 2008, 07:24 AM

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The music distribution company that supplies Wal-Mart is getting out of music distribution in the US. 260 jobs will be eliminated as Handleman refocuses it's efforts on something more profitable, like video games. The Wal-Mart supplier pointed to significant CD sales drops, and troubling forecasts. "CD music sales have been declining at double-digit rates for several years, both industry-wide and at our customers' stores, resulting in a sharp drop-off in our business," said Handleman president and chief executive Albert Koch. "Our decision to exit the North American music business was difficult but unavoidable."

Meanwhile major labels are invensting in more digital companies as part of their diversification strategy. This whole plan is to get their piece from an online presence and also control some of the distribution outlets more closely. Cutting out some of the middlemen results in job losses, but these efforts will surely keep the labels financially afloat. This is all good news and shows a better understanding of the real world for music labels as a business, but these new business strategies have little to do with actual MUSIC. Legendary and important artists are abandoning label homes more and more frequently, believing they can do it better on their own.

Is a label still a label if it doesn't have any bands and doesn't sell new music? Can they survive on catalog alone? Is there any real future for music artistry in a multimedia conglomerate? It seems labels are positioning to go MORE generic and MORE manufactured, rather than the direction so many analysts have been suggesting since rougly 1999. They aren't creating any new outlets for their artists and they aren't providing their artists with any new opportunity or financial security. What is the realistic path for an artist to receive true large-scale success?

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