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More Musicians Route Around Music Labels -- Go Direct To Retailers

In the past, we've written about Starbucks' success in producing and selling CDs by artists such as Ray Charles and Bob Dylan. It appears that other retailers have taken notice. Rajesh writes in to point out the news that Target is now signing deals with "older" musicians, and will sell their CDs for $9.99. As Rajesh notes, these kinds of deals probably make sense for everyone. Without the record labels involved, the musicians conceivably get better deals, and while the retailers probably make some money on the music, the real benefit to them is in the advertising value and getting people into the store. It's been clear for a while that the only successful retailers of music now view music as a loss leader, which means that a store like Target probably isn't even all that interested in making money directly off CD sales, so long as it brings more people into the stores. For people who seem to think that their can be no other model for musicians other than signing big record label deals, here's yet another example of why that's wrong. That's not to say this is the right business model for all musicians -- but it's simply one of many alternatives that are starting to make themselves clear.

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