An Open Letter to the Majors From Independent Record Stores

While this is a novel idea, I just don't see it happening - the $ just isn't there to support the 'old' system model. Hopefully this letter will get Direct Shot performing better though.

 

Going to record stores doesn't mean you understand how they operate, which your statement is blatant evidence of.

 

I own/operate a couple of stores. Sadly (and scarily), I'm getting a "destroy it all from within" feeling in regards to physical media and the major labels.

 

The ineptitude of any bureaucracy. Big small and inbetween is just mindboggling. And usually hurts themselves as much as any other party. I deal with this daily and it worsens in my line. Bureaucratic idiocy is so common.

 

There is also AEC One Stop that independent record stores still use as well

 

Published on Billboard.com:
'It's a Total Nightmare': Problems at Direct Shot Distributing Have Made New Vinyl and CDs Scarce

 

Unfortunately, I can't read the article since it's locked behind a paywall, but what little I could see certainly jives with what I'm seeing with my local. Items are still showing up weeks late. At this point, they should just revert back to the old distro system and dump Direct Shot, although I'm not sure that would even be possible. I can't believe this has been going on for close to 8 months and things haven't even gotten marginally better.

 

Here's another article. What a mess.

A Major Music Distributor Has Stifled Vinyl Sales for Record Stores and Indie Labels, Sources Say

 

This should be a sticky thread.

 

Absolutely, this is a huge issue effecting physical releases nearly across the board. The grateful dead threads here are rife with confusion and issues over these situations and it would be useful for more people here to understand the background of what has been causing these issues.

 

The amount of real damage done in the name of "efficiency" is legion. When are we going to learn that saving a buck isn't the be-all and end-all?

 

I think this is happening with video (DVD/Bluray) as well. When studios start putting new movies out digitally weeks ahead of physical release, you know they want physical media to just go away.

 

This is the real story, imo. As CD sales fall, many Vinyl lovers almost seem to applaud the demise. However, what happens with one eventually happens to the other. With streaming the labels will gain an unprecedented level of control over the music and movies that are released. The noose is tightening, all sold for $10 a month.

 

Wasn't aware that the article is locked since I was able to read it. I guess if you are on a Billboard.com mailing list, you have access to the articles.

'It's a Total Nightmare': Problems at Direct Shot Distributing Have Made New Vinyl and CDs Scarce

Indie distributors are helping to fill in the blanks in physical product, but the problem could drag on.
It's early December and Matt Jencik can't find any copies of A Charlie Brown Christmas. The buyer for Reckless Records, which owns three stores in Chicago, says that at this time of year the Vince Guaraldi soundtrack would normally sell a few copies a day — but Reckless can't sell records it can't stock. "There are holiday records I couldn't get that have always been good sellers, like titles by Stevie Wonder, Bing Crosby and Dean Martin," he says. "We were at a holiday fair last week and barely had anything to offer."

Since April, record stores and labels have been plagued by a distribution bottleneck that began when Warner Music Group moved its physical product to Direct Shot Distributing (DSD). The change made DSD, which also has contracts with Universal and Sony, one of the largest distributors of physical music in the country. The problem became apparent on April 13 — Record Store Day, the busiest and most profitable day of the year for many retailers — when some stores didn't receive the exclusive releases they had ordered. Since then, the problem has gotten worse.

The problems are varied, complicated and occasionally absurd. Buyers are told their orders are lost or unavailable without further explanation. Albums arrive with box-cutter slashes through the jackets. Large shipping pallets are delivered, shrink-wrapped, but with just one box. New releases are late, essential catalog titles are unavailable, and indie-exclusive vinyl pressings — like the silver version of Beck's new album, Hyperspace — aren't delivered. Further complicating matters, around the time it switched its business to DSD, Warner began using a new business-to-business website that doesn't provide tracking information.

"It is Kafkaesque," says Jencik. "Paperwork that goes nowhere. Calling people that don't respond to you. It's a total nightmare."

David Swider agrees. The owner of The End of All Music in Oxford, Miss., is scrambling to source the January 2020 title for his store's record-of-the-month club, which has anywhere from 50 to 100 members throughout the year. Swider originally picked The Dank D-Funk Blend, a compilation of funk tracks from the Prestige Records catalog released by Jazz Dispensary in November. But Swider is unsure if he'll receive the copies he ordered. "I called [my rep from Universal] today and they still have 400 copies in stock," he says. But Universal can't guarantee that DSD will get them. "It makes zero sense," says Swider. "You're the biggest music company in the world and you can't send me 60 copies of something?"

On Dec. 9, Billy Fields, vp sales and account management at Warner Music Group's distribution arm, WEA, posted a photo of The Dank D-Funk Blend on Instagram. "Uggh we didn't receive any of these, cool to finally see it," responded Annie Skinner, owner of Indy CD & Vinyl in Indianapolis, under the store's account. Warner and Universal Music Group did not respond to a request for comment.

Some of the problems stem from the increasing complexity of the physical distribution business, according to Kyle Krug, director of marketing for Legacy Supply Chain Services, which acquired DSD in June. DSD, which used to ship bulk orders to big-box retailers, now sends more small orders to individual stores. At the same time, the volume of online orders is skyrocketing — along with the number of manufacturers involved. "The Warner onboarding sort of created the perfect storm of challenges for the physical music industry," says Krug. (Legacy Supply Chain Services had started negotiating to acquire DSD before the Warner switch, he adds.) Krug also says DSD has added staff at its Franklin, Ind., warehouse, which processes all of its physical music product. DSD's warehouse partner is also upgrading its technology, although Krug says he does not know exactly when retailers and labels will notice service improvements.

In July, Amoeba Music in Los Angeles hosted an in-store performance for artist Cuco, to celebrate his debut on Interscope Records. But sourcing product for the packed show became an onerous task, says Amoeba co-owner Jim Henderson, and they ended up with mostly CDs. "There are also countless issues with returns authorizations post shows, which impacts credits and payments," he adds. And stores remain beholden to contractual billing cycles — usually 30 or 60 days — whether they receive the stock they ordered or not.

The problem isn't just affecting major-label artists. Many indies use distributors — including Alternative Distribution Alliance (ADA), Ingrooves, Caroline and The Orchard — that funnel product through the major-label network and into the DSD warehouse. After months of headaches, some indie labels are telling manufacturers to ship large amounts of stock to their own warehouses or directly to retailers so that they have it on hand for tours or online orders — which in some cases violates the exclusivity provisions of their distribution deals. "We've taken the approach that it's better to ask for forgiveness than for permission," says one indie-label executive.

Retailers are going rogue too. When the metal band Baroness released Gold & Grey in June, stores formed a patchwork supply chain to ensure that albums reached every shop with a scheduled in-store appearance — each store shipped its leftovers to the next on the list. This holiday shopping season, many stores are stocking more nonmusic merchandise items like T-shirts and totes to help offset the losses from missing and late releases.

Until DSD's distribution improves, representatives from Warner have said stores should order from one-stops (third-party wholesalers) — although that costs more. Skinner says that's how, on the advice of Warner, she sourced most of her Warner product for Black Friday Record Store Day on Nov. 29. But she doesn't see this option as sustainable. Sources say the three major labels are providing wholesalers with discounts to pass through to indie merchants to help offset the extra cost, a situation that was put in place primarily for the fourth quarter but that could last through Record Store Day 2020 in April.

Amid the chaos, distributors like ADA are losing big accounts. In the past year, large indies like Beggars, Epitaph, Third Man and Secretly Distribution left ADA. In some cases, indie distributors are stepping in to help stores navigate shortfalls in lieu of a permanent solution. "The silver lining to DSD's ****ups," says Swider, "is that the indies are really helping us get through this."

After a quick analysis of December sales at Newbury Comics, which has 29 stores across the Northeast, brand engagement director Carl Mello says sales were split about 50/50 between the majors and indies – a figure that would have been very different if the supply from majors was better. "We ordered Led Zeppelin IV in August and haven't seen it yet – like 600 pieces," he says. "It doesn't matter to the customer why you don't have these things. All they know is that you are failing to satisfy what they're looking for."

Additional reporting by Ed Christman.

This article originally appeared in the Dec. 21 issue of Billboard.

 

Distribution isn't rocket science, especially with simple product lines like CDs, Records and BluRays...

Still seeing issues at my local with missing/wrong/delayed shipments. BFRSD they were missing an entire box of good stuff they paid for up front and got a box of another store's stuff that they didn't want. As of this past week they were still awaiting an RGA on the box they got and they hadn't gotten the box they were missing (BUT PAID FOR!!)

It's a mess and an opportunity at the same time. Anyone want to go into distribution???

 

Can Music Stores, Indie Labels Survive The Big Distribution Debacle? - Hypebot

 

Man, this is really pitiful. How difficult a job could this possibly be?

 

The business model of any retail store is always dependent on a reliable distributor or distributors. Record stores don't make their own records.

 

This also explains why even amazon hasn't had many new releases on-hand to ship on their release date even if you had an early pre-order.

 

'The Whole System Collapsed': Inside the Music Industry's Ongoing Distribution Crisis

 

I did computer retail for nearly thirty years. I'm also pretty keenly aware of what goes on in bookstores.

I'm very surprised that there is another layer above Ingram. I'd have thought Ingram would be that top distribution level.

 

Profound is the word. I can't imagine being a record store owner depending on out of state shipments for album stock. And it's not that you get a big profit selling new releases! Talk about employees not giving a damn. Good God almighty!

 

At this point if I owned a B&M shop it'd be primarily used inventory. Really makes it feel more and more like new vinyl is simply a cash grab by the majors.

 

I’m just an interested reader and lack any knowledge of these distribution systems but indulge me a few questions. Has it been ruled out that something isn’t being done to damage independent brick & mortars purposefully? Seems the big online entities and big box stores have the leverage to make the record labels do what they want.

What is the percentage of physical sales independents account for and could somebody be jealous of that income? Or is one or more industry people trying to either contain the spending at independents or quash it altogether because every dime spent in an independent store is a dime the big boys don’t get. I’d like to know how comfortable tithe independent store ownership is with its relationship to the produces of media they rely on.

The stores I go into a very small and they sell a ton of used cds and are seeking used vinyl all the time. It seems likely the producers of new reissues and original releases might realize that is a leak in their boat.

 

My take is has covid helped this in terms of allowing distribution to catch up ? or as we slowly get going again around the world will it simply reappear ? an indie i use has been waiting on a couple of records i've ordered since Sept and i've no doubt its not an isolated case ...