Hip Hop Fridays: Suing The Major Labels Won't Help Hip Hop, Black Music or Independent Record Stores
The lawsuit filed Tuesday by 30 states against the major record labels accusing them of price fixing may make for good headlines but it won't do anything to help the Independent Music Stores that drive Black Music and Hip Hop sales. Nor will it help the artists that make such music. Our official Hip Hop supplier - John Chambers, whose record store, the Music Factory, is one of New Jersey's most popular independent record stores is very much against the lawsuit against the major labels. According to him, those who think the states are representing the best interests of the people simply don't understand the issues involved or the real impact on Black communities.
The focal point of the case is the MAP program, which is backed by major record labels. MAP is an effort to keep large department stores and electronic chains like Best Buys and Nobody Beats The Wiz from advertising CDs below a certain price and getting subsidized for doing so. Best Buys and The Wiz can sell CDs for any price they want but if they go below the MAP determined price they won't receive advertising subsidies which record labels commonly give to stores that sell music.
Record labels enacted MAP because they did not want to see any record stores going out of business. While they didn't have small Black stores in mind when they designed MAP, the program does benefit Black-owned stores. The Major Record Labels primarily wanted to save stores like Camelot, Sam Goody and Towers with MAP. These stores were being hurt by the growth and emergence of superstores like Best Buys and The Wiz, which drew consumers into their stores for not just music sales but the sales of electronic appliances and equipment.
John says that if MAP is removed, Best Buys and The Wiz would benefit because their low advertised prices draw consumers away from independent stores which John sees as a predatory practice. " They only advertise these exceedingly low prices in an attempt to put us out of business. They don't even make any money off of it. And because they sell printers, computers, video games and stereo equipment they don't have to make money off of their CD sales while we do. They want to corner the market on music sales and this is a way to do it." John adds, "If we (Independent Stores) were put out of business these superstores wouldn't sell any records that weren't top 200. This would mean you couldn't buy reggae, gospel, underground hip-hop, jazz, mix tapes or classic soul."
So in the long run, John says, Black and alternative music - anything that isn't Billboard Top 200 - would be totally undermined if MAP disappears. " The superstores don't care about servicing these markets." John says. "They only want to sell multi-platinum artists like Puffy. Later for Yolanda Adams, Mos Def, Redman, Common, Will Downing, Beenie Man or any new artist." John is actively trying to get this point across to those who are following the issue. "The media never addresses these points." John concludes.
The following is a letter John wrote to the FTC:
May 31, 2000
As a music retailer, I deplore your pursuit of record distributors to eliminate their Minimum Advertised Price (MAP) policies. These policies have rescued the industry, which include the new artists, the retailer like us, and the infrastructure of people who depend on music for this $10 billion a year industry.
By taking away the (MAP) policies, you will destroy thousands of music retailers and only help a few giant retailers. Only after you have successfully destroyed thousands of jobs and lives, can these giant retailers have a monopoly where they can exploit their customers and raise prices to any level they choose.
I can guarantee that by taking away the (MAP) policy my business will be destroyed. In addition, my employees will lose their jobs and local communities across the country will lose the businesses that care about them.
Don't let history repeat itself as it was prior to (MAP) when in the mid-nineties over 1,000 record stores were forced to close and Chapter 11 was notorious.
Retailers Say States' Suit Against Labels Won't Lower CD Prices
Friday, August 11, 2000