Christina Aguilera is the latest musical artist to release an album exclusively through one retailer. Aguilera’s greatest hits CD, which released Tuesday, will be available only through Target, one of America’s largest chain stores.
Aguilera is following a number of artists who have struck exclusive deals with retailers. Wal-Mart has had huge success in similar deals with the Eagles, Journey and Garth Brooks, and just released AC/DC’s new album “Black Ice.” Target has also made exclusive deals with music celebrities John Legend, Alicia Keys and Carrie Underwood.
Working with an exclusive retailer helps simplify the marketing strategy of the artist, maximize sales efficiency and target a specific audience. With today’s oversaturated media communications including everything from newspapers to television to Internet and billboards, using one retailer can help simplify the marketing strategy because of the large in-store audiences that are available to large music labels through their deals with Target or Wal-Mart.
Instead of using print, online and other media materials to get the consumers to enter a record store or online retailer, artists have the ability to promote themselves within the contracted retailer to an audience of millions across the country.
Aguilera would be able to promote her album more heavily in Target than non-contracted artists simply because Target has market control of her product. Target is also looking to make a major profit from having the exclusive rights and will be able to promote the album as so.
“We definitely do specific marketing for our exclusive products,” said Target spokesperson, Brandy Doyle. “I think the benefit of carrying exclusive music, is a way we can differentiate [Target]. It’s essential to driving traffic in our store.”
With numerous online retailers like Amazon and iTunes becoming major players in music sales, the pricing of music has shifted. You can now buy songs individually, which means fewer albums sold and lower profits. With iTunes setting the price at 99 cents per song, profit margins obviously changed.
Before Apple unleashed the Ipod, a consumer could walk around Best Buy and try to buy an album for $14 to $20. But now, look at Amazon.com and you find most albums averaging around $10.
With artists working exclusively with retailers like Wal-Mart and Target, the labels don’t have to compete with online retailer pricing and would have consistent pricing throughout the nation. Labels could agree on a $12 to $15 price and would have dramatic increases in profit margin since consumers would have to buy the album from the selected retailer.
Using a specific store can also help artists bring their music to their targeted audience when a certain demographic uses the store consistently. Target’s younger consumer base is probably one of the reasons Aguilera partnered with the store instead of retail giant Wal-Mart.
“Target wants to partner with artists that really appeal to our guests,” Doyle said.
Aguilera’s partnership with Target allows her to build impressions with her target audience: college students picking up new bed sheets, young adults checking out electronics or high school students picking up school supplies.
To sum it up, exclusive deals with retailers are going to become more and more prevalent with established artists because of the many benefits the partnerships have to offer. Record stores are going out of business, online retailers have yet to catch up for the initial decline in record sales due to the online boom, and I hate to say it but soon big businesses like Wal-Mart and Target may be some of the only places to buy a tangible album.
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