2008.12.12 - Reuters/Billboard - "Chinese Democracy" Shows Limits Of Retail Exclusives

"Chinese Democracy" shows limits of retail exclusives

By Ed Christman

NEW YORK (Billboard) - When Wal-Mart sold 784,000 copies of AC/DC’s “Black Ice” during the album’s first week in stores, many label executives believed that more superstars would release albums exclusively through big-box retailers.

And when Best Buy experienced disappointing sales of Guns N’ Roses’ “Chinese Democracy,” some of those same executives thought, well, maybe not.

“Chinese Democracy” (Interscope), the rock act’s first album of all-new material in 17 years, sold 261,000 units in its first week of availability, according to Nielsen SoundScan. That included sales at Best Buy, exclusive digital retailer iTunes and other stores selling import versions of the album.

While first-week sales forecasts for “Chinese Democracy” ranged from 300,000 to AC/DC’s first-week tally of nearly 800,000, most major-label sales prognosticators thought the album might sell between 400,000 and 500,000 units.

So how did one of the most hotly anticipated releases of recent years fall so short of expectations? Some executives suggested that the initial projections for “Chinese Democracy” were out of whack with reality, considering that Wal-Mart has 4,200 stores selling music while Best Buy only has about 950 stores.

But many others say that Best Buy simply didn’t promote “Chinese Democracy” as much as Wal-Mart pushed “Black Ice.” One major-label head of sales says he didn’t see “anywhere near the TV for Guns as I saw for AC/DC.”

And while no one expected the consumer electronics chain to duplicate Wal-Mart’s store-within-a-store strategy for Guns N’ Roses, about half of the executives interviewed for this story said they had a hard time finding “Democracy” at their local Best Buy.

That was certainly true for Best Buy’s store in the Woodside neighborhood of Queens. After this writer walked around the store twice looking for “Chinese Democracy,” as well as checking the Guns N’ Roses section in the album bins, store personnel pointed out the cardboard fixture housing the album. Although it was located at the end of the center aisle, among other merchandising kiosks, shoppers waiting in the checkout line could have easily missed it.

This wasn’t the case at many other locations, where the album was displayed in the front of the store.

TURNOFF FACTOR?

Other executives defended Best Buy, saying the retailer wasn’t to blame for the poor sales of “Chinese Democracy.” They pointed out that while AC/DC dutifully made the media rounds to promote its album, Guns N’ Roses frontman Axl Rose didn’t do any interviews to promote his. They also note that the years-long wait for the record, coupled with the mercurial Rose’s proclivity for not showing up for concerts, may have finally turned off fans.

Representatives for Best Buy and Interscope didn’t respond to requests for comment.

Meanwhile, other retailers that aren’t in on big-box exclusives didn’t exactly mourn the album’s disappointing performance. Some openly crowed about how the album had “flopped,” while others said they hope the experience gives major labels pause before signing another such deal.

Music specialty retailers regularly denounce exclusives, saying they are yet another factor hastening the demise of the CD business by forcing customers away from destination music stores with deep catalogs to big-box stores with smaller selections.

Of course, none of this affects Wal-Mart’s strong track record with exclusive CD offerings, given its self-reported first-week sales of 1 million units for Garth Brooks’ “Limited Series” boxed set in 2006; last year’s 711,000 debut-week sales for the Eagles’ “Long Road out of Eden”; first-week sales of 105,000 for Journey’s three-disc set “Revelation”; and the extraordinary success of AC/DC.

“Chinese Democracy” may serve to remind both labels and artists to consider exclusives on a case-by-case basis. And whether more superstars ultimately pursue such deals may depend on how the next one fares.

https://web.archive.org/web/20081217074017/http://www.reuters.com/article/musicNews/idUSTRE4BC06C20081213