Best Buy signing, promoting local bands
Minneapolis / St. Paul Business Journal - by Carissa Wyant Staff WriterShane Wyatt, an aspiring country singer who’s been performing in Minnesota and elsewhere since he was a teen, doesn’t have a record contract. But he does have a CD out, and you can get it at Best Buy.
The placement is part of the Richfield-based retailer’s Unsigned Artists program, which lets local musicians sell music through Best Buy’s stores and Web site. The program’s first efforts quietly rolled out in late 2007, but the company began its first big solicitations of musicians in June. So far it’s signed about 100 artists.
For Wyatt, 34, the deal gives the sort of exposure and legitimacy that once required a record deal. “[It] helps lend credibility, which as an independent artist is something you struggle with constantly,” he said. “When people ask where they can get your album, and you tell them Best Buy, it helps to legitimize you as an artist.” And, he added, “Hopefully we’ll get some sales.”
There’s a credibility element for Best Buy as well, said Lon Lindeland, director of music merchandising for Best Buy, who sees it as a way for the chain to reach out to local musicians, a crowd that might be inclined to view a big-box retailer with skepticism.
“The goal is to create a connection with the local music community … to lend support to the unsigned artist, or the artist who has recently gone independent,” Lindeland said. He has been working on the Unsigned Artists program for two years.
The CDs are distributed through a partnership with Leawood, Kan.-based J Distribution, which was started by John Fetto, a former regional buyer for Best Buy. Fetto said he saw a need for a distribution company “that is totally dedicated to the independent artist.”
The CDs, which span genres from punk to Christian rock, are priced at $9.99. Bands are chosen by the company, which employs eight regional music buyers across the country to weed out hopefuls based on factors such as where and how often they tour and Internet exposure via social networking sites like MySpace and Facebook. Artists are paid a cut for each CD they sell.
Music sales have long been a staple for Best Buy, which is looking to double total annual sales to $80 billion in the next five years.
But U.S. sales of music CDs are plunging. They posted another double-digit decline at mid-year, down 11 percent to 204.6 million units for the six months ending June 29, according to Nielsen SoundScan, as listeners turn to online services such as iTunes.
Targeting local acts is a way to combat that trend (though you can buy Shane Wyatt’s album on iTunes, too). “It’s a good strategy” for the company to target independent musicians, said Morningstar retail analyst Brady Lemos. “The concept helps tie together the music store and create a music-type atmosphere.”
Glenn Feinberg, national entertainment director for Best Buy, said the Unsigned Artists program gives the company a “chance to personalize each store … and connect with the local community.”
The company declined to provide revenue projections for the program, which it is advertising in stores and circulars.
Wyatt initially said he was turned on to the program by a fan who had heard Best Buy was looking for a few good bands. “I don’t see other big boxes reaching out to local artists,” Wyatt said. “I think it paints the company in a pretty good light.”
Chris Roberts, host of Minnesota Public Radio’s The Local Show on radio station The Current, thinks the idea is solid. Independent artists would be “grateful for any help,” he said.
Roberts also said the move may be viewed as a way for Best Buy to bolster its image, since big-name retailers are sometimes seen as contributing to the demise of local record stores.
Roberts hopes the company will take some risks in choosing artists, “and not just choose the most marketable. They could really play an important role in helping aspiring musicians to reach a wider audience.”
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