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ARSCLIST  November 2009

ARSCLIST November 2009

Subject:

Re: VERVE SELECT

From:

Tom Fine <[log in to unmask]>

Reply-To:

Association for Recorded Sound Discussion List <[log in to unmask]>

Date:

Thu, 12 Nov 2009 11:50:21 -0500

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (135 lines)

Hi Thomas:

This is a very limited market, and you have to know what you're doing. There are several ways to 
approach these niches that I've seen, all of which must be successful since the companies involved 
have been around for a while. What I have been told by players in all of these various niches is, 
this is a labor of love and it's not very profitable but you can have fun and make a living. So one 
wonders what will happen when the bean-counters get wind of a little division servicing a niche in a 
megaglomerate.

The models that seem to work:

1. specialize in vinyl. This would be like Classic, Speakers Corner, Sundazed, etc. The key to this 
is get a good deal from the copyright owner and know what you are doing as far as getting a really 
good sounding vinyl product out there. Then you can charge a premium price and make enough money per 
unit that a run of 2500 or 5000 units puts food on your table.

2. deluxe CD box sets. Mosaic, Bear Family, now Universal is dabbling in it, Rhino (part of Warner 
Music), etc. I think this market has shrunk considerably in this decade. Just see how many fewer of 
these products are being introduced now as opposed to 1999. One problem with this model is, the 
megaglomerate copyright owners demand a certain number of units, and they demand to be the 
manufacturer. I am told terms have become more reasonable in recent years, but still 2500-5000 is 
usually demanded, which is a lot of up-front money. The bottom line is, your labor of love better be 
able to sell in a reasonable amount of time of you'll go hungry warehousing lots of merchandise with 
no buyers. So if you pick right, make a really nice product and market aggressively, there still 
seems to be legs to this model.

3. the more limited CD or 2CD made up of really obscure material. I have a few funk collections done 
this way. Sundazed plays in this market with funk, surf and rockabiliy collections. Also Light In 
The Attic, Rhino (remember the original Nuggets albums?) and other small players. These things can 
take on a cult status and sell quite well. Usually, the best ones are true labors of love, although 
a "larger" (ie more than one person) operation like Rhino or Sundazed can approach a copyright owner 
and just re-issue a lot of vault material (Sundazed with EMI/Capitol earlier this decade, for 
instance). Then you have projects like "The Funky 16 Corners," where someone goes and hunts down 
obscure material from all over the US, sometimes finding master tapes stored under someone's 
mother's bed. I can't see how you'd make a mint on these sorts of projects, but imagine how much fun 
it is, since you wouldn't take on something like these collections if the music was not a strong 
interest of yours.

4. a new model that is emerging in the fast-dying classical CD business is what I call "throw in the 
kitchen sink at a deep discount," which is to put together a many-CD set in the cheapest packaging 
possible priced at $5 or less per disc. Universal has been very active in this with DGG back-catalog 
and Decca back-catalog. They've also reissued some products that were more deluxe boxes back in the 
90's (ie the Dorati Haydn symphonies) in ultra-cheap packaging at ultra-cheap prices. This is smart 
if you've taken material out of print at regular prices because it wasn't selling, but you have 
digital masters and CD manufacturing plants sitting idle. The case for this is, any market is better 
than no market and presumably these cheapo sets are profitable. By the way, this is an old practice. 
Think Mercury Wing or the cheapo RCA re-packaging of golden-era stuff in the 70s. This has been a 
market dominated by the major megaglomerates -- I doubt there is a niche in the cheapo end of things 
aside from reissuing royalty-free junk for which you happen to have masters sitting in your closet.

It will be interesting to see how Universal does with this Hip-O Select imprint. Will they be 
satisfied with a limited-quantity but high-margin (presumably) market? This goes against all past 
business practices of music megaglomerates, previously the emphasis was on producing many units in 
the plants at maximum efficiency and forcing them fast into the retail channels, then selling 
returns at a discount occasionally when warehouses filled up or unloading slow-sellers when 
bean-counters chose to write-down that inventory.

One key question -- is there an even better niche business model in selling full-resolution 
downloads with PDF's of the booklets? I do not know the answer and, given the jazz demographic 
(aged), the answer may be that physical media will sell more units, enough so that net profits will 
be higher.

-- Tom Fine

----- Original Message ----- 
From: "Thomas Stern" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Thursday, November 12, 2009 9:32 AM
Subject: Re: [ARSCLIST] VERVE SELECT


> Hi Tom,
>  They do have a potential for making significant profit, given the high price ($20+ per disc) and 
> small costs (if they do
> significant restoration perhaps costly-but this is not done on everything, and certainly nowhere 
> near studio costs for new
> recording).
>  Perhaps the collapse of the retail channels will force the majors to look at their legacy 
> holdings and make them available via
> this type of marketing.  IF collectors support it.
>  I think "younger" music collectors are NOT interested in these packages - any under 30s here who 
> are willing to
> comment?  Electronic distribution seems to be their medium.
>  Does anyone know how well BEAR FAMILY does with their massive complete packages, or for that 
> matter MOSAIC??
>  They seem to continue in business, producing magnificently produced packages.  Are they 
> experiencing the downward
> spiral in their market place, or holding their customer base?
>  Best wishes, Thomas.
>
> -----Original Message-----
> From: Association for Recorded Sound Discussion List
> [mailto:[log in to unmask]]On Behalf Of Tom Fine
> Sent: Thursday, November 12, 2009 8:47 AM
> To: [log in to unmask]
> Subject: Re: [ARSCLIST] VERVE SELECT
>
>
> This imprint is interesting:
> http://www.hip-oselect.com/scr.public.cmstemplate.asp?section=ABOUT
> and smart. Do limited pressings, sell directly (ie pocket all the profits). Probably distributed 
> out
> of whatever system they have left for the few small retailers that are left, or handled by a third
> party like the bones of an old record club or something.
>
> Smart.
>
> -- Tom Fine
>
> ----- Original Message -----
> From: "Thomas Stern" <[log in to unmask]>
> To: <[log in to unmask]>
> Sent: Thursday, November 12, 2009 7:58 AM
> Subject: [ARSCLIST] VERVE SELECT
>
>
>> Just received an e-mail announcing the launch of
>> the VERVE SELECT label - limited edition CD sets
>> (via HIP-O SELECT).
>>
>> First release includes
>> ELLA FITZGERALD  (4CD unissued nightclub recordings)
>> BILLIE HOLIDAY   (2CD Commodore & Decca masters)
>> OSCAR PETERSON   (3CD "rare live, all Mercury singles, tracks from various albums, plus two
>> unreleased cuts.")
>>
>> It will be interesting to see how successful this is.....
>>
>> Best wishes, Thomas.
>>
>>
>> http://www.hip-oselect.com/scr.public.product.asp?product_id=89BF6F62-2C75-4AE3-AF55-67275D1F9C5D
>>
> 

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