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- ► 2007 (204)
There is sometimes nothing uglier for a Distributor than when a producer or partner drops the distributor and take product out of the Distributors channel. That goes double for industries such as entertainment where distributors are often the record companies or movie studios that sign top talent to multi-year contracts, promote the artists, the content and distribute that content at what is like a micro-monopoly over that artists body of work during the contract period.
These days more and more producers in entertainment as well as producers of goods in China and around the world are looking out side the box at the internet and other areas to move their goods electronically and physically. This is happening in markets that move CDs and movies to markets that sell novelty scooters and even basement dehumidifiers. As they break their bonds away from former traditional distribution partners, things can get very ugly for distributors.
A very good example of this is Nine Inch Nails break from Universal Records. The break has been bad for Universal for many reasons.
- First and foremost Nine Inch Nails has been very successful. Selling over $1.6 million in records during their first week of record sales, when they gave CDs away for FREE.
- Customers are following the creators and not buying from the distributors more and more.
- The new models are demonstrating that historic distribution models may be obsolete in many circumstances.
- Distributors often suffer the wrath of very bad press and public relations.
Singer and songwriter Trent Reznor has attacked his former record label Universal for "ripping off" fans, and once told a crowd to "steal, steal and steal some more".
The band's deal with Universal has now ended, but The Slip will still be coming out on CD, Reznor said.
"For those of you interested in physical products, fear not. We plan to make a version of this release available on CD and vinyl in July."
There's an interesting thing that is now happening in the microcosm of the Nine Inch Nails example. Just a little more than a month after their last free offering that included a 4 CD set with more than 30 tracks, Nine Inch Nails is doing it again and offering another album for free.
The producer is producing more and consumers are lining up to consume that product. As I write this the demand on the Nine Inch Nails Website is so large that the site is stalling out as consumers race to the site to get the latest free album.
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