Canadian Retailers Boycott Stones31 Oct, 2003 By: Erik Gruenwedel
A group of Canadian music and video retailers representing more than 300 outlets in the country last week began pulling all Rolling Stones CDs and DVDs, and related material.
The boycott by Toronto-based Music World, HMV Canada and Sunrise Records, among others, is in response to the previously reported Nov. 11 scheduled release of Four Flicks, a four-DVD set to be sold exclusively in North America for four months by Best Buy and its Canadian Future Shop subsidiary (VSM, Oct. 12-18).
Longtime Stones concert promoter Michael Cohl created the Stones DVD exclusive for Best Buy independent of the group's label, EMI Recorded Music.
Best Buy's price of $29.99 in the U.S. and $39.99 in Canada for the DVD set edged offers from rival vendors, which would have been $20-$30 higher and “unacceptable to the Stones,” said Cohl in a statement.
“This has never happened in Canada before,” said Dan Kuczkowski, VP/GM of Music World, which is pulling $100,000 worth of product from its shelves. “Everyone has a [unique] opportunity when it comes to marketing and promoting an individual retailer by adding a sampler, poster or CD single. But this is a whole different thing.”
Kuczkowski, whose mall-based Music World derives about 30 percent of its revenue from DVD/VHS, said the Best Buy deal implies the chain is not “good enough” to carry the compilation in the biggest quarter of the year. “This is the time that makes or breaks a lot of retailers,” he said. “What's going to happen when the next Britney Spears product comes out, and it's only available at Wal-Mart? I just can't sit here and not do anything about it.”
Reaction in the United States appeared confined to 24-store Newbury Comics in Brighton, Mass., which said it would scale back from 45 Stones titles to 15 and reportedly raise unit prices more than 18 percent. “If enough people take a stand on this kind of stuff there certainly will be an impact,” said Mike Dreese, CEO of Newbury Comics.
With traditional music retailers accounting for 70 percent of Canadian music and DVD sales, the exclusive will reach about 15 percent of the market, according to Tim Baker, head buyer at Sunrise Records. “We object that Canada is always lumped together with the United States as an afterthought when determining North America distribution deals,” Baker said. Baker criticized U.S. music retailers and the record companies for allowing the nontraditional retailers like Best Buy and Wal-Mart to take over the music business. “Our customer does not want to go into a store to buy music where they can also buy washing machines and dishwashers,” Baker said.
HMV Canada president Humphrey Kadaner said the Stones boycott will cost his company up to $1 million in lost revenue through the holidays.