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    Tuesday, February 10, 2009

    Nikki has a new CD, "Hawa". Unfortunately, I've been getting a lot of calls and messages from friends and fans saying that they have trouble finding the CD in stores.

    Unfortunately, this is true and it's a challenge faced by the music industry when it comes to retailing.

    I am going to oversimplify the issue but still get the point across. You see, the recording label will only print a limited quantity of CDs because there are only so many copies that will be sold. There is an industry ratio for each product category. For instance, in the book retail business, an area which I am painfully familiar with, only 2 out of 10 books will be sold. In other words, on average, 20% of the books in stock at the bookstore will be sold. And the rest will be returned to the publisher.

    There is no return policy in the music retail business. It's either firm sales or on consignment where the record label will place the CDs in the store and the unsold copies will be returned to the label. With firm sales, unless it's a proven artist, most stores are reluctant to buy too many copies for fear that they will not be able to sell the CDs. (There are questionable practices that major labels use to "force sell" CDs and get CDs into the retail system but that's another story.)

    As a business, the trick here is to balance between making the CD available and not having a store room full of unsold CDs in six months.

    The other thing that is "killing" music retail is the lack of stores itself. Former retail chains such as Tower Records, Salem Power Station, and Music Valley are gone. There are more Starbucks and Coffee Bean outlets than there are music stores. Why? Because the concept of the music retailer today is outdated and it's inefficient. Add the piracy issue, the music retail store is not a viable business model anymore.

    This is why digital download is conceptually very suitable for music retail and distribution.

    The reason why I am explaining this is because Satu is co-releasing Nikki's CD with Artistes United Records, and we are responsible for the distribution. And we are faring no better or worse than when Nikki's first album was distributed by two other labels. Unless we print 10,000 copies of the CD and offer the CD on consignment, the issue of not being able to find the CD will always be there.

    So, let's try this. Get in touch with me if you want a copy of Nikki's "Hawa". You may also have the CD personally defaced by Nikki with her autograph. The CD is RM25.90 and an additional RM3 delivery charge to any address in Malaysia.

    That's RM28.90 for each CD delivered to your doorstep! Or if you prefer, you may save the RM3 and pick up the CD at our office in Jalan Utara, Petaling Jaya. (And no, you will not meet any famous people at our office.)

    Email me at buy(at) for payment and delivery details.

    Do it! Do it now. Free Willy!


    Eng said...

    thanks Audi for the interesting insight into music retailing/distribution :)

    in KL, i've seen the CD at Victoria Music Sg Wang and some Speedy outlets.

    i wish for the iTunes online store being available for Malaysian consumers soon! but will that kill the local retailers??

    Mr. Manager said...

    I'm going to quote your posting at my blog.

    hafizanmohd said...

    read the review