Friday, November 21, 2008

Best Buy, the big-box chain electronics store, has spent a lot of money advertising the fact that "Chinese Democracy," the first album of original material from Guns N' Roses in 17 years, will only be available there. The long-awaited album will be released Nov. 23.

So why has the long-awaited "Chinese Democracy" been on sale since Wednesday at all seven Utah Graywhale Entertainment stores?

That's due to the efforts of Music Monitor, a national coalition of indie record stores, working together to subvert the trend of record labels to strike exclusive agreements with chain stores. The coalition buys albums in bulk from overseas distributors, often in Australia, to offer the music for sale in member stores.
Some coalition stores, like Graywhale, have been selling the embargoed albums days before the official release, disregarding the industry's "street date" standard. That's similar to an indie movie theater screening "Twilight" five days before the studio-set release date.

The object isn't to make money, said Graywhale co-owner Jonathan Tueller, but to make a statement about business survival. "Our whole drive is that if you're a fan of music, and there's an artist you want, we want to have it," he said. "We need to find a way to get this into our stores."

The Music Monitor effort was motivated, in part, by recent exclusive deals. First, there was the contract between Columbia and Wal-Mart to sell AC/DC's new album "Black Ice," which was released Oct. 20, followed by Best Buy's exclusive agreement with Guns N' Roses' label, Interscope Records, to sell "Chinese Democracy."

"It's a little dig at the labels," said Graywhale co-owner Steve Brit. "The little guy can still compete without being dictated to."

Another indie store official, Steve Duncan, head of purchasing for the Arizona- and Nevada-based record chain ZIA, is even more emphatic. "It's unethical for [the labels] to not make [the albums] available," Duncan said. In his view, since record labels depend on independent record stores to promote and break new artists, the independents also should be able to sell popular albums by big-name artists.

Instead, with AC/DC's album, Duncan claimed Columbia turned its back on indie stores while still expecting them to promote and sell the band's back catalog.

The response from record labels and big-box retailers has been quiet -- but possibly threatening. Best Buy spokeswoman Emily Shroeder would only say, "We're unable to discuss the actions of others in the industry."

Wal-Mart spokeswoman Melissa O'Brien, in a voice-mail message, stated there could be "legal ramification[s]" for the coalition. "It's with [Columbia's parent] Sony and Columbia where there may be issues," she said. When contacted by phone for clarification, she declined further comment.

Columbia and Interscope record companies didn't respond to repeated calls and e-mails for comment.

Tueller, of Graywhale, said he heard from his suppliers that "Interscope is trying to squeeze" the distributors, "trying to limit supplies." However, "We have more than one supplier," he said.
Because Australia is one of the few countries where the dollar remains strong, some coalition members are buying albums from there, Tueller said. At $8.50 per copy, plus shipping costs, Graywhale and other stores are breaking even when they set their retail price at $1 less than the price at Wal-Mart and Best Buy.

Kayvon Motiee, a radio DJ for 97.5 FM "The Blaze" (KZZQ), has been a vocal supporter of Graywhale's efforts. "If I could let my listeners know about a better deal, and support a local business at the same time, I'd do it every day," Motiee said. "I'm very excited to help them out."
Motiee acknowledged that "Wal-Mart did not get hurt one bit by independent record stores" because of the massive sales of the album at the massive national chain.

But Graywhale owners believe offering such big-name albums for sale is essential for the survival of their business. Some members of the coalition have even talked about filing litigation against record labels for unfair business practices.

And if the labels were to restrict overseas distributors from selling albums to indie stores, Graywhale employees plan to buy albums at Best Buy or Wal-Mart and resell them to Graywhale customers, at the same price -- or even lower. "We don't like people to come in and not find what they want," Tueller said.

That's exactly how Graywhale got the inventory to sell some 230 copies of AC/DC's "Black Ice" since late October, the album that's only for sale at Wal-Mart. Or so we thought.