Sunday, November 11, 2007

Corporate Environmentalism and Cutting Out the Middleman: The Case of the Eagles (the Rock Band)

In recent years, you can directly buy computers from the maker (Dell), buy your own plane ticket without a travel agency ---- now the Eagles will sell you their album at Walmart without any record company getting involved. Cutting out the middleman raises the revenue per CD that the Eagles will receive. Could there be any environmental benefits from simplifying the chain?

Don Henley claims that he has more direct access to Walmart (the seller of his album) because of his band's direct contract with him. This green believes that he can "green" Walmart from the inside because of their mutually profitable relationship.

This is an interesting claim and he may be right. It would interest me what suggestions he makes to the company and whether they really "listen" or whether they say "let's nod our heads as this old hippie makes these suggestions and then continue with business as usual after he leaves". I'm hoping I'm wrong about this and that Dr. Henley is right.

November 11, 2007
A Big Box of Eagles

The new Eagles album — “Long Road Out of Eden”— came out recently, but only at Wal-Mart. One of the points the Eagles may be making is that you have to consider your allegiances in the world of the present, not the past. A few years ago, any link between Wal-Mart and Don Henley, an ardent environmentalist, would have seemed puzzling at best. But there is a simple equation here. This new album was released without the participation of a major record label. This isn’t just a case of selling exclusively in the Big Box. It’s a case of giving up Big Vinyl and its distribution.

Mr. Henley has also explained this decision in terms of demographics. The Eagles may have the best-selling album ever, but Mr. Henley is 60, and most of the band’s fans are either closing in on that birthday or receding from it. There is no doubt that Wal-Mart is doing a good job of getting the CD into the hands of buyers. After all, it sold 710,000 copies in its first week, the second strongest debut of the year so far. The details have not been made public, but it is safe to say that the band is getting far more money per CD than it would have if the album had been released by a major label.

The music industry is undergoing a series of tectonic shifts, something that is beautifully illustrated by the marketing of “Long Road Out of Eden.” But it is also reflected in the decision by Billboard, the music trade magazine, to begin listing on its sales charts records sold exclusively through a single source, something it never used to do. And the No. 1 record? “Long Road Out of Eden.” This is both a recognition of Wal-Mart’s importance in music sales and a sensible effort to keep the Billboard charts from becoming irrelevant.

Have the Eagles sold out? Mr. Henley says that by doing business with Wal-Mart, he has more influence and easier access to the company’s executives, including the ones responsible for trying to make the company more environmentally conscious. His argument is almost certainly bolstered by the strong sales of “Long Road Out of Eden.”

We hope, with him, that he has the influence he suggests, otherwise this arrangement may well turn out to be nothing more than a long road to Wal-Mart.