Last Tuesday, Wal-Mart started selling on an exclusive basis a three-disc collection by the popular 1980s band Journey called "Revelation" that it bought directly from the band without the help of a
record label. Journey kept most of the money a record company would normally take as profit. Last year Wal-Mart made a similar, lucrative deal with the Eagles.
The deals highlight the
changing dynamics of the music industry as consumers migrate to digital downloads. To fill the gap, musicians are scrambling to connect with fans, and Wal-Mart is using exclusive deals to assume a new
role: hit maker. This summer it will carry an exclusive release by the young country singer Taylor Swift in a promotion that also calls for her to promote L.E.I. jeans.
Journey sold
45,000 albums in its first three days on sale, and Irving Azoff, founder and CEO of Front Line Management and a music industry veteran, predicts that it will sell more than 80,000 copies in its first
week. That is significantly more than its last album sold in total. "With the downturn, the labels couldn't match the marketing commitments that Wal-Mart could make," Azoff says. "It was well in
excess of anything a label could do."
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