Wadsworth issues rallying cry to retailers
Wadsworth to retailers: let’s work together to build digital and physical music sales
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15 September 2011: BPI Chairman Tony Wadsworth CBE has issued a
rallying cry for record labels and retailers to work more closely
together not just to drive digital sales of music, but also to
strengthen the biggest part of the market - mass market compact
disc sales.
Delivering the keynote address at this year's annual general
meeting of the Entertainment Retailers Association (ERA), Wadsworth
said, "UK record companies and UK retail are together responsible
for one of the highest per capita music spends in the world.
Labels want retail to work - they need retail to work - and will
give whatever focus is necessary to help each other."
Wadsworth noted the strong 30% share of music sales now taken by
digital, but he moved to allay fears that record labels are any
less committed to physical product.
"It is not in the interests of record labels to accelerate the
decline of the physical format," he said. "With 70% of our turnover
tied up in the physical format that would be business suicide.
Talking to labels in the last few weeks, I know there is a desire
to innovate as much in the physical retail space as there is in the
digital space."
He pointed to the strong commitment by labels to create ever
more attractive deluxe and special physical editions of albums.
"These aren't just niche products," he said. "The Special
Edition of Exile On Main Street by The Rolling Stones sold 100,000
sets and gave the band their first No.1 album since 1994."
The strongest weapon the industry has at its disposal, he said,
is the compelling nature of music itself.
"There is no problem with the demand for music," he said. "Music
is a special product - it is the best advert for itself, but it
also helps sell other products in a store's offering. British
music specifically is something to shout about. The UK enjoys only
a 3% share of world trade in goods, and 7% of trade in services -
but our country's music accounts for an impressive 12% of global
trade in recorded music.
"Over the last 10 years, we have produced three times as many
global best-sellers as the rest of Europe combined.
"Let's get our heads together and make the most of the special
power of music to promote other products and work on ideas for
cross-selling, multi-channel and multi-format."
Wadsworth highlighted some positive developments:
"Last year's Record Store Day was a triumph," he said, "thanks
to the way that stores supported it and the way labels
wholeheartedly backed it with 250 specially-originated exclusives
and marketing support."
He also pointed to growth in the number of music outlets. "There
has been a growth in the number of independent retailers this last
year - that's a healthy sign. Labels are constantly looking
to increase the points of purchase for their product, and so every
year more stores become music retailers."
Wadsworth gave three examples of potential areas where labels
and retailers could drive new business:
- Online supermarket shopping. "Labels would love to talk to
grocers about selling CDs integrated into your online grocery
business," he said. "As we all know, CD is a proven online
success as a product."
- Linking physical and digital sales. "Let's also look at how we
can use CD as a driver for digital sales, and vice-versa. I
know that labels are open to discussions on dual licenses to sell
digital access with a CD - let's get the technology right and make
this work. Physical retail has the potential to play a huge
part in sales of digital music."
- Bundling CD sales with related products such as phones and
other technology, or with artist merchandising. "These are all
ideas which will make the most of the power of physical retail," he
said.
ENDS