Tesco wants to pay much less for CDs
News: 9th March 2011 by Louise Dodgson under Record Labels
It is truly a test of the recording industry versus the retail chain as Tesco proposes that they cut the amount they pay for CDs upfront...and cut it by rather a lot! At present Tesco pays £7 or £8 in advance per CD for its stock, and wants to reduce this amount to a measly 50p! The rest of the wholesale cost will be settled by Tesco when the CD is sold, if at all.
This will have a huge effect on the cashflow of record labels and is unlikely to be a change they will be happy about. However, Tesco claim they are spending £3million a year in returning unsold CDs back to music companies and by cutting this cost they will be able to stock a greater variety of music, which could in turn lead to more sales. Let's see how this one plays out...
Related Links
http://www.thecmuwebsite.com/article/tesco-pushing-for-new-cd-sales-terms/
http://www.ft.com/cms/s/0/616759dc-4831-11e0-b323-00144feab49a.html#axzz1G6ZWwV3L
Tags
tesco, music sales, record labels, record companies, music retailers, cd sales
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