Warner Music Issues Potentially Devastating Blow to Small Record Stores
WEA shuts down accounts of a number of stores doing less than $10,000 in business annually with them
WEA, Warner Music’s distribution and marketing arm, has shut down the accounts of “about a hundred” retailers that did less than $10,000 in business with the company last year, a WEA source has confirmed to Pitchfork. The move put into effect an existing policy requiring a $10,000 minimum annual order for stores holding direct accounts with WEA. This could have a devastating effect on small record stores around the country, representatives for various shops tell Pitchfork.
A WEA rep said in a statement: “WEA proudly supports hundreds of independent vinyl retailers across the country with direct distribution, and many more through other channels. Last week, in accordance with our long-time policy, we recommended that a limited number of retailers would be better served by working with one of the many vinyl wholesale partners that carry all of our artists’ releases.”
A WEA source clarified that the accounts did not all sell vinyl and that more than one-third of the shuttered accounts hadn’t ordered vinyl in more than a year. The source said the retailers affected included not just record stores but also museum gift shops.
Greg Glover, a co-owner of Commercial Astoria, which sells vinyl records alongside clothing, jewelry, and accessories in Astoria, Oregon, said he didn’t find out his account was closed until after spending the weekend prepping a $1,400 order. “No product flow means no business,” Glover told Pitchfork.
Small businesses that can’t afford to order directly from WEA will now have to order through intermediaries. Glover said that will be more expensive and lead to higher prices for customers.
Rick Wojcik, co-founder of Chicago’s Dusty Groove, said that while his store shouldn’t be affected, the move reflects how the record industry has always tended to undervalue the smallest stores. “When we started, and were quite small, we found it very difficult to work with record companies—even some of the small ones—because we were seen as ‘peanuts’ compared to the big retailers out there,” he told Pitchfork. “These days, those big retailers are all gone, while we’ve slowly grown, and numbers that once seemed negligible to the music business are now the numbers of success. The vinyl revival is one example of that, where the numbers pressed are tiny, but seen as driving the bigger business of these companies, so it is a bit of a surprise that they’d be shaking loose customers who were small, but important.”
Nate Niceswanger, owner of Des Moines, Iowa’s ZZZ Records, said his shop’s account also appeared to be fine, but added that raising the limit too much further could have a seriously adverse effect. “If that happens, we’re probably out of the game at that point,” he told Pitchfork.
Wojcik at Dusty Groove said, “Through all of this is the continuing self-fulfilling decline—in which the industry shuts doors on music retailing, then complains about its failure.”
– by Marc Hogan Pitchfork