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Record Store Day: A beacon of hope for retailing

Friday April 22, 2016

We have grown accustomed to newspaper headlines describing the "death of the High Street".

If shopping centres are not dying, they are said to be "faceless" or "bland" or "anonymous".

More and more retailing is conducted online, which is, by definition "faceless" and "anonymous".

How refreshing then to experience the fun, the unpredictable joy and sheer human interaction of Record Store Day.

RSD16 Resident Records 2016 Pic By Mike Burnell -9941

Over 230 independent shops participated in last Saturday's event. Early indications are that it was more commercially successful than ever - with stores reporting sales up on average between 10 and 25% on last year's event - and that is of course vital for a sector which has seen so many store closures over the past decade. For many indies today  it has been a lifeline.  But more than that, I believe Record Store Day exemplifies in a particularly dramatic way the very essence of entertainment retailing at its best.

It is about stores rooted in their local music community. It is about stores and fans united in a love of music. And it is about the diversity and individuality of an incredibly entrepreneurial sector.

It is a curious fact that for the past decades the wider music industry has tended to dismiss independent stores as old-fashioned, conservative, an anachronism.

And yet it is independents who week-in, week-out discover and nurture and find audiences for new music. It is independents , precisely because they have been marginalised, who have innovated, most notably by identifying an appetite for vinyl none of the big players had noticed.

ERA is proud to support Record Store Day. We salute our independent record shops. In their resilience, imagination and individuality they are a beacon of hope for retailing as a whole.

Posted at 09:51

A love letter to record companies

Friday February 26, 2016

It's no secret retailers and record companies sometimes have a 'lively' relationship. And even if margins weren't tiny and even if physical volumes weren't shrinking and even if streaming was fantastically profitable, things would still sometimes get fractious.

The fact is the skills required to make it in retail are very different to those required to sign and develop acts and bring them to market. The kinds of personalities you meet in record companies often wouldn't last five minutes in retail - and many of our lot would fare just as badly if they were pitched into the world of A&R. 

It's chalk and cheese. Too often in the past we have tried to gloss over the differences between us in a well-meaning attempt to reach a consensus which has left no one particularly satisfied. Sometimes we haven't been as clear as we might have been about our 'red lines', the things we really can't afford to compromise on.

Maybe it is time to celebrate each other's differences. Maybe it's time to celebrate each other's successes. To remind ourselves about what first attracted us to each other.

And since it's my idea, I guess I'm obliged to go first. And since we live in an age of clickbait, and the eye-catching line is everything, let's call it something you maybe never expected from the CEO of ERA:  A love letter to record companies. 

Brits 16-performer -adele -2website

And this week there's a perfect reason to write it: Wednesday's BRITs was a triumph. And the reason it was a triumph was because it exemplified many of the things record companies do best: 

The Strong Personal Vision 

Apart from a few outliers , the best retailers are very much team enterprises. On the contrary, many of the greatest record labels are the result of strong individuals with a distinctive vision (think Chris Blackwell, Martin Mills, Clive Davis or Lucien Grainge). 

This year's BRITs was very much the work of Warner boss Max Lousada. By all accounts over the past couple of years he talked the BPI council into significantly increasing the budget for the show which struck some as a bit odd when budgets everywhere else are under attack. 

In the end the result was stunning, a tour de force of production. You could see the money in the room, but most importantly, on the screen. 

The talent for talent 

Of course dealing with talent is what labels do, but there can be few greater challenges than the potential talent nightmare which is the BRITs.  The stakes are high, the egos as big as they get. This year's show really did offer some of the greatest mainstream musical talent in the world right now. Bieber, Rihanna, Coldplay and Adele made for a fiercesome combination. Brits 16-performer -coldplay -2website

The Appetite for Risk 

The BRITs was pretty much obliged to acknowledge David Bowie's demise, but that's not to say it wasn't risky. On the contrary, given the undoubted preponderance of David Bowie fans in the media, it felt in advance that they were set fair for failure. Gaga's Grammy effort seemed to prove the point, with The Guardian's Alexis Petridis reporting she "rampaged through the late singer's back catalogue like it was an obstacle onIt's A Knockout. 

Annie Lennox and Gary Oldman did a tremendous job with the spoken tributes and combined with the stunning visuals and Lorde's genuinely fresh take on 'Life On Mars' provided the ultimate riposte to the naysayers. This was a risk worth taking. 

All this, and great music too! 

By definition the BRITs is a mass market show and the talent choices reflected that, but as a handy two hour guide to the state-of-the-art in popular music, this year's BRITs would be hard to beat.  

And as the credits began to roll, streams and downloads of the performers flashed down fibre optic and copper cables and through routers to laptops and phones around the country, order lines to distributors began to hum, delivery vans fired up their engines. 

The UK record business provided the platform. Now it's time for retailers and digital services to work their own miracles and turn TV magic into the cold hard cash which makes the whole business possible.

Ends

Posted at 14:16

PRS/ PPL Fees

Tuesday February 9, 2016

It has long been a bone of contention with music retailers that they have to pay for the privilege of playing in-store the music they sell - through the PRS and PPL licences all business premises which play music are obliged to have. 

To be clear, they do not question the principle of public performance licensing. No one doubts the justification for DIY stores or bingo halls or bars or crematoria to recompense rights-owners for the use of their work. 

No one needs to persuade music retailers that music has a value. 

What they do question is the idea that they have to pay to play music when the main reason they do so is to sell music. 

This is very different, for instance, to commercial radio stations who play music to sell advertising or bars who play music to sell alcohol. Music retailers use music predominantly to sell music. And naturally any sales they generate typically benefit rights owners far more than they do the retailer.

Against this background and a physical music market which remains challenged, the steady increases in the fees demanded by PRS and PPL from music retailers is causing increasing concern in retail circles. 

Many ERA members have reported fees which have risen at more than double the rate of inflation over the past decade. The level of licence fees charged to the bigger chains and supermarkets in particular seem excessive, and in many cases these fees can completely wipe out any retail profit on music sales. 

ERA's representations on this matter have not so far resulted in a lot of progress. One senior PRS executive suggested that perhaps retailers can regard licence fees as part of their "corporate and social responsibility" messaging!

So you can imagine that our hopes rose when we received the letter above last week revealing the news that PRS For Music and PPL are to form a new joint venture which will provide one-stop licensing for music users. It is a long-overdue move which should allow the two organisations to cut costs and streamline processes. 

It is clearly wasteful to have two entirely separate organisations collecting money from the same companies and so the cost savings should be substantial. 

Naturally we therefore assumed that much of these cost reductions would be passed on to licensees. Unfortunately not. A PRS and PPL spokesman was swift to quash any such suggestion. Any cost savings we must assume therefore will be kept by the PRS and PPL. 

Which rather cuts to the heart of the whole issue. In competitive markets, when cost savings become available they are invariably passed on to consumers (ERA members do it all the time). But PRS and PPL do not of course operate in competitive markets. They are effectively monopolies.

A meeting of ERA members last week demonstrated that this issue provokes strong emotions. With selling music only a marginally profitable activity for many, there is concern that the rising cost of PRS and PPL licences could even make playing music in store unviable for some players. 

It would be a shame if the announcement of what by any measure is a progressive move - the coming together of PRS and PPL to bring new efficiency to public performance licensing - were to become a catalyst for some major retailers to give up on music entirely.

ENDS

020116 Letter To ERA-page -001

Posted at 09:43

Bayley on: 25

Friday November 27, 2015

Thoughts on a stellar week for music retailers

It was a week when UK entertainment retailers simply got on with what they do best: selling entertainment, and literally in truckloads.

From up and down the country this week the ERA office has heard reports of the quite extraordinary demand for Adele's25.

And while the headlines have been dominated by25 overtaking NSYNC's 1991 US week one sales record forNo Strings Attached, UK retailers have delivered a similar feat: by Wednesday this week Adele overtook Oasis andBe Here Now which in 1997 scored the biggest week one sale of any album in the modern era.

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There has been much focus on the decision of Adele and her label XL to withhold the album from streaming services, but by definition we cannot know what might have happened if25 had been available on streaming services. One thing is for sure, however: this week represents a ringing endorsement for the power of the ownership model and for physical formats in particular.

And in a sense what is most remarkable is how, after years of the record industry focusing (or so it seemed) exclusively on digital formats, the "old model" has apparently run like clockwork.

Apart from a few quibbles from individual retailers unable to get their hands on the much-coveted vinyl edition of25, there has been nary a hitch. One leading supermarket reports that in terms of a major release "the25 campaign has set a new gold standard".

 Much of the credit of course must go to Adele's label XL, but it is true to say that retailers have really pulled out all the stops from pre-order campaigns (Amazon reported that the title generated its biggest presale yet) to price offers through to digital stores offering high quality FLAC formats.

 After a period when the music industry has resigned itself to monetising an ever-declining number of music lovers, the overwhelming response from the public has been a welcome reminder of the ability of great music to cut through to a mass market. Quite simply, quality will out.

 And how fitting too that it took an artist who famously once worked at one of the UK's best indie record shops, Rough Trade, to produce such an album. 

So thank you, Adele. Thank you, XL. And thank you Britain's entertainment retailers, both digital and physical, for reminding us just how good a job you can do with the right product.

Posted at 09:52

Kim Bayley on the BVA's Video Insight Seminar

Friday July 17, 2015

Trust a retailer to tell it how it is. That was one clear takeaway from yesterday's Video Insight Day held by the BVA and supported by ERA.  Amid the glitzy presentation, lavish eats and hardcore security (attendees had to check in their phones and sign an NDA!) the presentation from Tesco Non-Food Category Director Ian Ditcham tackled one of the biggest challenges in the video industry with laser-precision: the negative effects of early digital release windows.

The ERA Manifesto, published in February, identified the issue.

"The video industry seems wedded to inconsistent windowing strategies," we said, "with titles available on download-to-own platforms far earlier than on physical formats.

"Studios need to adopt windowing strategies that work for the customer and recognise that a customer should not be forced to choose between physical and digital."

Ian Ditcham amplified the point at yesterday's event effectively telling video distributors: releasing digital before physical reduces the effects of in-store efforts and theatre.  In essence there's no point putting in enormous effort to promote something which has already lost its sparkle.

Instead, he said, the video industry should look to the example of the hugely successful games industry which has proven it can sell digital around physical, growing the overall market, rather than selling digital at the expense of physical.

The answer he said is more cross category promotion and cross physical/digital promotion.

To be fair many studios have acknowledged the point. In ERA's rounds of meetings with the video industry to discuss our Manifesto, many of them have acknowledged the need to do more to support Blu-ray and DVD.

The point now is surely to back up those kind words with action. As presentation after presentation pointed out, consumer appetite for physical formats is still robust. It is way too premature to push customers towards digital by using artificial windowing strategies.

Posted by Kim Bayley at 09:42
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