The labels make a distinction between the following types of customers:
- Wholesalers and Rackjobbers: Act as intermediary between record companies and retailers. In addition to gross sales of albums they can also take care of album positioning in retail outlets. Supermarkets notably purchase music albums via their services.
- Supermarkets: Supermarket and Hypermarket chains for example Carrefour, Tesco, Auchan, Lidl, etc.
- Specialised music chains: Specialised Multiple (in other words specialized among others in music) for which music sales are a substantial part of their business (music roughly makes between 30% and 60% of their revenues). This type of customers would not be able to significantly reduce their shelve space for music without dramatically changing the nature of their business. Examples of specialized music chains are Virgin, FNAC, HMV, Mueller, etc
- Department stores: General Multiple (in other words not specialized in music) for which music is not part of their core business (music roughly makes less than 10% of their revenues) for example Karstadt, El Corte Ingles, MediaMart, Saturn, etc.
- Independent music stores: Small chain retailers for whom selling music is the main business (music roughly makes 80% or more of their revenues) for example Tipo, Fopp, Andy’s Records, etc.
- Mail and Internet: Retailers that mainly sell music through Mail Order or Internet.
- Clubs: Retailers that sell music only to club members. Clubs generally purchase music at discounted PPDs or at very high invoice discounts.
- Exporters: Customers that purchase music mainly for exporting purposes.
- Others: None of the above categories applies to the customer in question, for example kiosk retailers.
- Sales of albums are mainly achieved through wholesalers and rack jobbers, supermarkets, specialized music chains and department stores. The proportion of sales realised via these different types of retailers can vary significantly from one Contracting Party to the EEA Agreement to another, and in some of them, music will be predominantly sold via one or two types of retailers only, whereas in others, music will be sold via all the different types of above mentioned retailers. These four main categories of retailers nevertheless account for [80-90]% of sales in most affected markets.
This item is part of the series of posts based on the European Antitrust Agency 2007 Music Industry Analysis for the Sony BMG Case. It’s home page is here.