Guns N’ Roses And AC/DC, Are Big-Box Stores The Future?

GUNS N’ ROSES AND AC/DC, ARE BIG-BOX STORES THE FUTURE?:

November 5, 2008

Steve Knopper of Rolling Stone reports that at 12:01 A.M. on October 20th, Wal-Mart opened a temporary 3,000-square-foot store on Hollywood Boulevard devoted entirely to AC/DC’s new album, Black Ice. Like the Eagles successfully did a year ago, AC/DC are selling their record exclusively through Wal-Mart’s 3,500 stores, tapping into the chain’s marketing might and 200 million annual customers at a time when CD sales dropped 36 percent between 2000 and 2007, according to data from Nielsen SoundScan.

The deal is paying off for AC/DC in a big way: Black Ice was on track to sell more than 900,000 copies in its first week at press time, making it the year’s second-biggest debut. And Wal-Mart — the nation’s number-two music retailer, behind iTunes — has reportedly ordered 2.5 million copies of the record.

Other superstars are making similar deals: Best Buy will release Guns n’ Roses’ Chinese Democracy on November 23rd and the Police’s Certifiable box set on November 11th. (David Gilmour’s Live in Gdansk and Elton John’s The Red Piano box sets hit shelves earlier in the season.) And Christina Aguilera’s Keeps Gettin’ Better hits package will come out at Target on November 11th. “You’re talking about retailers that can come up with millions of advertising dollars,” says Tom Corson, general manager of Aguilera’s label, the RCA Music Group. “That can be attractive if you have the right brand and the right artist.”

Wal-Mart has erected AC/DC “rooms” in its stores, selling $11.88 Black Ice CDs — plus the group’s catalog, merchandise and an AC/DC version of Rock Band. And in addition to opening temporary AC/DC stores in L.A. and New York’s Times Square, Wal-Mart sent black AC/DC ice cream trucks into those cities to hype the disc. “If you are not going to be a digital band [AC/DC don’t allow their music to be sold as downloads], then it behooves you to explore opportunities for an alliance with someone who is powerful in the physical world,” says Steve Barnett, co-chairman of the band’s label, Columbia Records.

Similarly, an upcoming Target commercial will act as Aguilera’s new video. And Martin Kierszenbaum, an Interscope A&R exec who oversaw the Police box set, says, “Best Buy was like, ‘We’re going to put it in the front of the store — it’s November, the height of traffic — put it in the circulars, take out ads, TV, radio.’ I was like, ‘This makes me feel like a frontline release.’ ” The Eagles benefited from their deal with Wal-Mart last year, selling 2.6 million copies of Long Road Out of Eden by the end of 2007 — making it the year’s third-biggest record.

While the Eagles signed directly with Wal-Mart, AC/DC’s deal is through Columbia Records. “People [at labels] see it as a new model,” says Greg Hall, Wal-Mart’s vice president of content and services. “We’re finding there’s more and more willingness to come down to Bentonville and see what we have in mind.”

For years, labels resisted these kinds of deals, fearing spurned retailers such as Tower would respond by pulling product from shelves. “There were [retail] accounts that were absolutely a little upset with exclusivity, and sometimes artists paid the price back then,” says Johnny Barbis, co-manager of Elton John, who also put out 2005’s Dream Ticket DVD at Best Buy. “Not so with today’s marketplace. There are no Towers anymore. Where are you going to go to pick that [business] up?” Still, the antagonism over exclusives continues. “It’s a disturbing trend,” says Don Van Cleave, president of the Coalition of Independent Music Stores. “It forces music fans to go to the one place, and they may not even have it in their hometown.” (Indie stores can sell the vinyl version of Black Ice.)

But with AC/DC poised to follow in the Eagles’ bestselling footsteps, these deals are likely to become even more common. “If you go to a major city, people got tons of choice,” AC/DC’s Angus Young says. “But if you go to out-of-the-way places like Montana, Wal-Mart is the only game in town. If I grew up in this country, it would have been out in Montana, or somewhere small. You can’t be a snob. That was the selling point to me.”

Courtesy of www.rollingstone.com