AC/DC Screws Up

AC/DC has a new record called "Black Ice."  Since its release in October, 1,319,914 copies have been sold. 

The album was distributed exclusively through Wal-Mart...which may explain why they sold about 2% of last week's 105,146 sales online.  None of those sales were downloads, by the way...they were all physical CDs via the Wal-Mart website.

Download numbers for last week?  Zero...just like every week.  Unless you count the illegal downloads.

The week before the album was released, it's estimated that about 400,000 people illegally downloaded it.  Who knows how many people have downloaded it since then.

I supposed you could argue, "If somebody really wants an album, they're find a Wal-Mart, get in the car, fight traffic, and make the effort to jump through all the hoops that AC/DC has put up in order to get the new album."

And that would have been a good argument in 2000, when the last AC/DC album was released.

But this is 2008.  Wal-Mart is no longer the biggest music retailer, iTunes is.

What does that mean?  It's a vote by music consumers for how they want to buy music.

AC/DC fans aren't typical music consumers though, right?  They're old school, hard-drinking, Camero-driving, mullet-wearing guys who want something they can hold, right?

Maybe...although the 400,000 people who downloaded Black Ice would suggest otherwise.

How much does it cost to put a record on iTunes?  Almost nothing.

Surely some of those 400,000+ AC/DC fans who downloaded illegal copies of Black Ice would have supported the band by purchasing a legal version...

If you want record sales, you've got to make it easy on people.  That means getting the music you have in the format they want. 

If people want downloads, give them downloads.  If they want cassettes, give it to them.  If they want CDs, give it to them.

Comments

[Brian Stephens]

Hey Dave,

You might want to research the deal they made with WalMart. (Very similar to the Eagles deal from what I understand.) You might be surprised at what you find.

At the end of the day, I don't think they (the band) really cares what the final sales figures are. Their bank on this deal (or at least the majority of it) was decided long ago.

I believe what you'll find is that the method that WalMart is using with these artists is very similar to the method of purchase/acquisition that they use with suppliers of all their other merchandise.

[David Hooper]

Oh yeah, I'm sure they got paid plenty. And people got it anyway, even if illegally, so I suppose you could argue that everybody who wanted it was able to get a copy.

Still, why would somebody limit themselves? Especially when digital distribution is so easy...

[Lee Jarvis]

I'd have to disagree with you here, I think that AC/DC made a bold move that suited their best interests. They are strongly opposed to iTunes for the reason of splitting an album into single downloadable tracks, therefor managed to create quite a deal with Walmart. The result? Over 780,000 sales in it's opening week, just in the US. I'd hardly call that a screw up.

I wrote a piece a couple of weeks on the release here: http://leejarvis.blogspot.com/2008/11/acdc-album-news-physical-revolution.html

[Gary Hawkins]

Why would AC/DC limit themselves? Because they want people to buy albums, not $.99 tracks. Kid Rock did it and sold more than 3 million CDs. Making something available on iTunes hardly stems the tide of illegal file sharing. Are you suggesting that 400,000 people would have paid to download the album at iTunes were it available for purchase? My belief is that people who illegally download tracks put absolutely no value on music, and wouldn't pay for it no matter what format it was in. These are the same people who complain about the high cost of CDs.

Incidentally, one of the reasons AC/DC chose Wal-Mart was because of their support of the band's back catalog, which reportedly sells 10,000-20,000 weekly. It has been suggested that the deal is in the range of what Wal-Mart paid for the Eagles "Long Road Out of Eden" which was a guaranteed $30 million upfront (nonrefundable) for 3 million albums. And Wal-Mart sold more than that, in 2007!! They may not be the largest music retailer, but they are for physical CD sales. For an industry which has based its business model on that format, it shows there are signs of life for the CD.

I have never bought a song from iTunes, but I did buy the CDs from the Eagles, AC/DC and Guns N Roses. Despite the convenience of downloading, CDs are still a vastly superior audio technology and, if the content is there, a good value.

[David Hooper]

Good thoughts, guys.

I'm sure that not all of 400,000 people who downloaded the album would have purchased a legal copy, but many of them would have.

The reason most people download albums is EASE, not cost. Make it easier to purchase than steal and you'll make money. This is why iTunes is the number one music retailer.

As far as the "splitting the album" argument, this is AC/DC, not some pop act. AC/DC fans obviously want the entire album, which is why it went #1 in 29 countries. That didn't just happen because singles weren't available.

How about the people who aren't yet fans yet? Those are the people who would buy the single. But they can't...

So those potential fans are off listening to (and buying from) somebody else.

As you've mentioned, the CD is not dead. My point is that we can have both. You don't make somebody fill up the tank when only a gallon is needed. Gallons add up.

[Gary Hawkins]

True, you don't need to "fill up the whole tank if you only need a gallon". But then you've got the iTunes cartel, which tells musicians and record companies how much you can charge for your music, what specific format it has to be in (again, if you don't own an iPod, iTunes is worthless) then and keeps 40% of the retail just for hosting it. So it does cost a lot to make an album available at iTunes.

[David Hooper]

Every retailer is like this. Amazon takes 55% and the rest, including Wal-Mart, are similar.

100% of zero is still zero.

You don't need an iPod to use iTunes, by the way. You can listen from your computer, burn to CD, etc. An iPod is easier, but for most people, pressing a button to burn a CD of your download is a lot less effort than going to a retailer and buying a physical CD.

[ideagirl]

You wrote:

"They're old school, hard-drinking, Camero-driving, mullet-wearing guys who want something they can hold, right?"

As a woman who does not wear a mullet, drives a Mercury Grand Marquis, and is firmly grounded in the 21st century, I am one of the people you are talking about.

I won't step foot in a Wal-Mart, but I did buy the CD through Amazon. I normally only buy downloads (regarding this album let's just leave that statement as is), but did make an effort to purchase the CD in this case because AC/DC has been my favorite band for 30+ years, and I want them to keep releasing new albums. If it was any band other than Angus and crew, I wouldn't have bothered to seek it out.

Perhaps, though, that is what they are counting on. But if they want to keep gaining new fans, they need to step into the 21st century and eliminate the protectionist marketing strategy.

[Neil]

Interesting choice by AC/DC and The Eagles, for me it has greatly devalued their "brands." I see WalMart as a source of cheaply made crud for people who have no care that WalMart is bad for the economy of both the place where the shoppers live, and that of the people who produce the goods. I'm not alone in that feeling - although I am sure I'm in the minority on this issue. Sad day.

[David P.]

Forget it's AC/DC for a second. What if you could only buy bananas at Wal-Mart for a month and the press, bloggers and TV ads all documented this fact. You better believe people would flock to Wal-Mart to buy bananas and there would be an uproar from banana lovers who wouldn't step inside a Wal-Mart.

The analogy is a bit nonsensical of course as you can get bananas at many retail places and a cart on the street. Hell, you can even grow your own or, gasp, steal them from a tree in the rainforest.

But here's a situation where you can't buy a single banana, only in bunches. And the banana owner received millions of dollars up front from Wal-Mart, even before a single one was sold. What do they care where they're sold... people just love bananas.

For those about to rock, head to Wal-Mart. Sorry to the other three retail places to buy music.

[Lee Jarvis]

David, another good point about the fact that "this is AC/DC, not some pop act. AC/DC fans obviously want the entire album". It was indeed largely the fact that they are an old-school supergroup with hardcore album-buying fans that made them go to number one.

I think the important thing that people can take from strategies like this is the fact that there are different ideas that sometimes do work. As much as iTunes is the biggest online store, there's other options for AC/DC. As much as giving away an album may not directly earn NIN any money, the respect they earned soon turned into sell-out concerts and high-end merch sales.