Music Clubs and Ethics

When I was a teenager I used to join and rejoin music clubs like Columbia House and BMG. Deals were something like “Buy 11 CDs For Only a Penny!” or “Get 12 CDs For The Price of One!” The flyers that came with newspapers shouted these offers while detailing the commitment in the fine print below. Nevertheless, it proved to be a cheap, fast, and easy way to increase your CD collection. Many of my favorite CDs are from BMG. I still listen to them today.

When I graduated college it also meant leaving the campus radio station. No longer would I receive new music to listen to every week (no matter if it was good or bad). I only had two places to turn for new music; the retail stores that I hate or the internet (namely BitTorrent sites). Guess which one I picked.

After feeling the paranoia set in I decided that I was no longer going to download music for free off the internet. It’s a decision that I don’t regret, but I still feel like I gave in to big brother. I did what the RIAA wanted me to do. I hate them for taking the wrong approach and I disagree with their practice of suing music lovers, but I didn’t want to become a statistic either. No longer can I try before I buy, yet I also realized that I’m less likely to buy an album that I had previously downloaded (previewing albums now means listening to 30-second song samples on iTunes). I only bought the albums that I felt were worth buying. If II listened to music I downloaded over and over again and never got tired of it THAT’S when I bought it. Of course, the initial Awe factor that accompanies opening a CD for the first time is gone when you’ve already heard it (strange how that’s how the recorded music business is run, but that’s a different entry).

So, having been online alot I found a ton of music that I wanted to get legitimately on CD. I remembered that back in the day I had built up my collection quite quickly by joining a record club. Maybe it was time to try it again.

I joined BMG a few months ago. The offer back then was the one they’ve had for the past few years: Buy 12 CDs for the price of one and only commit to buy one more CD at regular price in the next year. I got a job, I can handle it.

I’ve made a little spreadsheet to help people understand how the club looks fiscally in comparison to other retail outlets: CDPrices.xls and for those without Excel (cdprices.gif)

None of these prices include sales tax since it is a variable that changes depending on where you live. With the exception of BMG, there are also no shipping charges. They’re included with the BMG prices because they make up the bread and butter of the BMG model. Free is never free. There’s always a shipping charge.

The chart is self-explanatory. I’ve saved a ton of money using BMG. Sure, there are some selections that are more expensive, but the average CD price is what we’re interested in. If you’re careful, take your time and wait for the right offers, you can get an average CD price under $7 like mine above.

Let me take a minute to explain the prices and offers. Anything that’s $2.79 in the BMG column is a “free” selection with shipping and handling. Some were from the initial 12 CD offering (I still have 2 more to go on that actually) and others are from specials like “Buy 1, Get 2 Free”. The latest Deal was the “Buy 1, Get 2 Free, and Then Get Unlimited 80% Off”. I haven’t even accounted for music points, a system that rewards you for the amount of CDs you buy with more Free CDs.

Sounds like a great deal, right? But at what cost does it come?

Major labels have tricky ways of working, and that goes especially for record clubs. The reason that BMG can offer prices like these is because they cut out three middle men. There’s 1) retail space. There are no storefronts, just computers and a warehouse. They 2) manufacture the CDs themselves and 3) they also cut out artists’ royalties.

That’s right. Artists receive a significantly reduced cut of royalties when you buy their albums from record clubs. Generally, they receive about half of what they usually get from regular retail, and that’s only from regular sale prices. If their selection is “free” or specially priced, they receive nothing. I bought 4 Björk CDs. She won’t see a dime from those sales (unless you count other means of compensation regarding Soundscan statistics, etc). The money I paid usually finds its way into the record companies’ pockets the fastest way possible: directly. BMG is owned by RCA, which was bought by Bertelsmann in 1987. Bertlesmann now owns 50% of Sony Music. BMG offers it’s parent company’s titles for direct profit.

That’s shitty, right, isn’t it? I mean, shouldn’t Björk see that I’ve spent money on her stuff? Shouldn’t The Stills, a relatively new band in an unstable time in the recorded music industry get a cut? Kylie Minogue (a guilty pleasure purchase), why, she just had breast cancer surgery! Doesn’t she need my money now more than ever?

It’s the typical ethics versus money battle that’s always plagued mankind. On the one hand, I should feel that I should enable my purchase to award the artist as much as possible. Yet, on the other hand I have a responsibility as a consumer to get the best deal possible. Oh, WHAT TO DO!?

People tend to forget a tiny, yet crucial detail when asking these questions. It’s understandable that they do this because they get so involved in the ethics of the situation that they overlook who they’re dealing with. And they’re dealing with… ahem MAJOR LABEL ARTISTS!

Björk is set for life for life as far as money goes, but she’ll still keep making music because that’s what she does. The Stills are probably in a contract to release more albums for their label (it’s called “job security”). And Kylie Minogue, she recovered fast and she’s still as sexy and perky as she’s ever been entertaining gay men and providing quality material for 13-40 year old straight guys to masturbate to. The Life!

The fact is, CD Clubs are just ANOTHER REASON WHY their music gets so much coverage. It’s promotional. That’s how it’s listed in their contracts. Yes! They KNOW that this is what’s happening, or at least they should since they signed the papers to allow it. It’s market saturation. It’s likely that they benefit more from taking a cut in royalties from club sales than letting albums sit on retail shelves. And if they don’t benefit, it’s probably negligible.

Besides, alot of times when you’re perusing that catalog, looking for the 12 CDs you want, you usually don’t find as much as you’d like, so you buy things on good faith. You buy them thinking “Oh, so and so said he liked this one.” or “I always wanted to hear this.” Sometimes you’ll even find yourself buying something solely on album art. Maybe it’s good, maybe it’s bad, but it’s almost always cheap. That’s good product promotion when you think about it.

Record clubs never have anything brand new anyway. It always takes maybe 5 months or more for a new title to come into the club. That’s because they know better than to compete with retail. By the time a CD finally comes to a club the album has cooled off and isn’t selling as hot as it was in the first few months after release. They’re in the safe zone.

Besides, these sales, while they’re at reduced prices and offer no royalties, still count towards albums sold. If I can help Logic Will Break Your Heart reach gold status, great. The Stills with 499,999 albums sold doesn’t throw around as much weight as The Stills that sold 500,000 albums.

So why haven’t indie labels done something like this? It could be that they simply don’t have the money. If they could, would they? Maybe. It works, at least for the majors. If it didn’t then BMG would’ve been dissolved by now. As weird as it sounds for me to say this, they aren’t THAT stupid. They’ve done their research and know how to meet their bottom line (granted, they could spend less on promoting Britney Spears and more on diversifying their catalogs, but catering to the masses works and it’s not going to change for a long time).

Is what I’m doing evil? That’s debatable, but I don’t think so. I’ll continue to do it because it makes financial sense. I think the ethics involved are negligible considering the nature of the beast. It’s not like the artists don’t know, and if they don’t then they should’ve paid more attention to the contract they signed, or gotten a better lawyer. Is this any better than downloading? Yes, because the labels know that I like the music I’ve bought from the club (most times). They see that it’s selling and that’s what they’re concerned with, not if an artist is daring or ambitious.

2 thoughts on “Music Clubs and Ethics”

  1. Dear Danny,<br/><br/>WHY ARE YOU WORKING IN AN OFFICE! I know for a fact that many magazines, papers or periodicals would pay you for a story like this. You’ve got real talent when it comes to writing, and that is so rare in this world. You need to let more people see this than me and whoever the hell that other guy is who sees this page.<br/><br/> Love, Chris

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