For years, the music industry blamed big box retailers for destroying mom-and-pop record stores.
Now, it simply looks like physical retail itself – small, medium, or large – is evaporating entirely. Here’s what EMI Music chief executive Roger Faxon told a Senate panel on Thursday about the state of the largest retailers.
“Let’s understand. Best Buy and Target, music is a very small part.”
“If you take Walmart, Best Buy, and Target, music represents less than 0.3 percent of their turnover.”
“If we as an industry or even a significant player tries to raise prices in a way that is going to reduce demand, and therefore reduce turnover per square foot, what is going to happen? It’s a very simple thing, and so they will resist and we have to supply at the terms that they will accept. And these stores, they look at their square footage and say, what’s my turn, what’s my profit retention, and if music isn’t providing it, they put something else in.”
“We know that, because shelf space has vastly reduced in our industry, and our prices in the physical world have declined, and they continue to decline even to this day.”
Entire music section at a Walmart outside Austin, TX (picture taken in March, 2012; more pics here.)