The consumer-electronics giant, which happens also to be the third-largest music seller behind Apple's iTunes and Wal-Mart, is considering devoting eight square feet of merchandising space in all of its 1,020 stores solely to vinyl, which would equate to just under 200 albums, after a test in 100 of its stores around the country proved successful.
Though vinyl represents less than 5 percent of Best Buy's music sales, the format is growing while CD sales continue to shrink.
Vinyl sales grew 15 percent year-over-year in 2007 and 89 percent in 2008, making the 1.9 million vinyl albums purchased last year the most since Nielsen SoundScan began tracking sales in 1991. This year is shaping up to be even better, with 670,000 vinyl albums sold through mid-April.
By contrast, CD sales have fallen at a roughly 20 percent clip for the past few years.
To be sure, the growth in vinyl, even when combined with digital sales, isn't enough to offset the decline in CD sales. But it does show that consumers haven't abandoned the physical format.
And the fact that a retailer of Best Buy's size is willing to expand vinyl offerings is an incremental positive for the beleaguered music industry. A typical Best Buy store features about 16 square feet to 20 square feet of music merchandise and displays about 8,000 CDs.
"Our goal is to occupy as much square footage as possible with music products," said Atlantic Records CEO Craig Kallman, whose personal vinyl collection numbers more than 300,000, making it one of the largest private collections in the world.
Hoping to capitalize on the renewed interest in vinyl, all of the major record labels have combed through their catalogs to remaster and re-release marquee titles with their original artwork and packaging -- both of which are essential elements for the vinyl consumer.
For instance, EMI in September 2008 launched its "From the Capitol Vaults" vinyl initiative with such titles as The Beach Boys' "Pet Sounds," Jimi Hendrix's "Band of Gypsies," and Radiohead's "OK Computer."
Compared with a CD, vinyl costs more to make and retails for a higher price -- $22.95 vs. around $13.99 for a CD -- but has lower margins.
Both Kallman and Jason Boyd, EMI's senior director of catalog sales, said profits made from vinyl were acceptable enough to warrant producing the format.
The situation is the reverse for Best Buy. Chris Smith, the company's senior music merchant, said margins on vinyl sales are "healthy enough" to mitigate the risk that comes along with not being able to return unsold inventory like it can with CDs.
Tuesday, April 28, 2009
Sunday, April 19, 2009
Monday, April 13, 2009
Thursday, April 9, 2009
French Lawmakers Reject Internet Piracy Bill
French legislators on Thursday rejected legislation to permit cutting off the Internet connections of people who illegally download music and films. But a stubborn government plans to resurrect the bill for another vote this month.
Backers of the bill -- record labels, film companies and law-and-order parliamentarians -- couldn't rally the needed support during in a near empty lower chamber ahead of the Easter holiday. Lawmakers voted 21 to 15 against it.
The measure would have created a government agency to track and punish those who pirate music and film on the Internet. Analysts said the law would have helped boost ever-shrinking profits in the entertainment industry, which has struggled with the advent of online file-sharing that lets people swap music files without paying.
The government, intent on gaining the upper hand in piracy, managed to slip the measure into an April 28 special session devoted to initiatives by President Nicolas Sarkozy's conservative UMP party.
The president's office reaffirmed Sarkozy's wish to get the law passed "as quickly as possible."
He "does not plan to renounce this whatever the maneuvers" to try to stop the bill's passage, a statement said.
Music labels, film distributors and artists -- who have seen CD and DVD sales in France plummet 60 percent in the past six years -- almost universally supported the measure, hailing it as a decisive step toward eliminating online piracy and an example to other governments. Artists' groups in France have said the future of the country's music and film industries depends on cracking down on illegal downloads, and the legislation received industry support from around the world.
"It is disappointing that the law was not confirmed today," said London-based John Kennedy, Chairman and CEO of the International Federation of the Phonographic Industry, which represents the recording industry worldwide and supported the bill.
Legislators and activists who opposed the legislation said it would represent a Big Brother intrusion on civil liberties -- they called it "liberticide" -- while the European Parliament last month adopted a nonbinding resolution that defines Internet access as an untouchable "fundamental freedom."
Opponents also pointed out that users downloading from public WiFi hotspots or using masked IP addresses might be impossible to trace. Others called its proposed monitoring structures unrealistic.
"It is a bad response to a false problem," said Jeremie Zimmerman, coordinator of the Quadrature du Net, a Paris-based Internet activist group that opposed the bill, calling it "completely impossible to apply."
He said the bill's rejection is proof of a widespread sense that it was a draconian approach.
Under the legislation, users would receive e-mail warnings for their first two identified offenses, a certified letter for the next, and would have their Web connection severed, for as long as one year, for any subsequent illegal downloads.
French Culture Minister Christine Albanel had said the bill did not aim to "completely eradicate" illegal downloads but rather to "contribute to a raising of consciousness" among offenders.
"There needs to be an experiment," said Pierre-Yves Gautier, an Internet law expert at the University of Paris, noting the plummeting profits of the entertainment industry. "Frankly, it's worth it."
Backers of the bill -- record labels, film companies and law-and-order parliamentarians -- couldn't rally the needed support during in a near empty lower chamber ahead of the Easter holiday. Lawmakers voted 21 to 15 against it.
The measure would have created a government agency to track and punish those who pirate music and film on the Internet. Analysts said the law would have helped boost ever-shrinking profits in the entertainment industry, which has struggled with the advent of online file-sharing that lets people swap music files without paying.
The government, intent on gaining the upper hand in piracy, managed to slip the measure into an April 28 special session devoted to initiatives by President Nicolas Sarkozy's conservative UMP party.
The president's office reaffirmed Sarkozy's wish to get the law passed "as quickly as possible."
He "does not plan to renounce this whatever the maneuvers" to try to stop the bill's passage, a statement said.
Music labels, film distributors and artists -- who have seen CD and DVD sales in France plummet 60 percent in the past six years -- almost universally supported the measure, hailing it as a decisive step toward eliminating online piracy and an example to other governments. Artists' groups in France have said the future of the country's music and film industries depends on cracking down on illegal downloads, and the legislation received industry support from around the world.
"It is disappointing that the law was not confirmed today," said London-based John Kennedy, Chairman and CEO of the International Federation of the Phonographic Industry, which represents the recording industry worldwide and supported the bill.
Legislators and activists who opposed the legislation said it would represent a Big Brother intrusion on civil liberties -- they called it "liberticide" -- while the European Parliament last month adopted a nonbinding resolution that defines Internet access as an untouchable "fundamental freedom."
Opponents also pointed out that users downloading from public WiFi hotspots or using masked IP addresses might be impossible to trace. Others called its proposed monitoring structures unrealistic.
"It is a bad response to a false problem," said Jeremie Zimmerman, coordinator of the Quadrature du Net, a Paris-based Internet activist group that opposed the bill, calling it "completely impossible to apply."
He said the bill's rejection is proof of a widespread sense that it was a draconian approach.
Under the legislation, users would receive e-mail warnings for their first two identified offenses, a certified letter for the next, and would have their Web connection severed, for as long as one year, for any subsequent illegal downloads.
French Culture Minister Christine Albanel had said the bill did not aim to "completely eradicate" illegal downloads but rather to "contribute to a raising of consciousness" among offenders.
"There needs to be an experiment," said Pierre-Yves Gautier, an Internet law expert at the University of Paris, noting the plummeting profits of the entertainment industry. "Frankly, it's worth it."
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