BPI Chief Calls For Teamwork

At a time when both parties are suffering from falling sales, British Phonographic Industry chairman Tony Wadsworth has called on record companies and retailers to work more closely together.

Giving the keynote speech at the annual general meeting of the Entertainment Retailers Association (ERA) Sept. 15, he spoke of the need to drive digital sales of music and the core business of compact disc sales.

“UK record companies and UK retail are together responsible for one of the highest per capita music spends in the world. Labels want retail to work – they need retail to work – and will give whatever focus is necessary to help each other,” he said.

Although digital sales now make up 30 percent of the market, he emphasised the record companies’ continuing commitment to the physical product.

He pointed out that it isn’t in the labels’ interests to do nothing about the decline in physical sales.

“With 70 percent of our turnover tied up in the physical format that would be business suicide. Talking to labels in the last few weeks, I know there is a desire to innovate as much in the physical retail space as there is in the digital space,” he said.

For the labels’ part, he said they’re committed to create ever more attractive deluxe and special physical editions of albums.

“These aren’t just niche products,” he explained. “The Special Edition of Exile On Main Street by The Rolling Stones sold 100,000 sets and gave the band their first No.1 album since 1994.”

He said there’s no problem with the demand for music and that it’s a product that also helps sell other products that a store is offering.

“British music specifically is something to shout about. The UK enjoys only a 3 percent share of world trade in goods, and 7 percent of trade in services – but our country’s music accounts for an impressive 12 percent of the global trade in recorded music.”

“Let’s get our heads together and make the most of the special power of music to promote other products and work on ideas for cross-selling, multi-channel and multi-format,” he said.

The ERA’s main beef is that the government’s “funereal pace” in progressing the implementation of the Digital Economy Act is costing its members millions.

ERA chairman Paul Quirk said retailing can’t work if it continues losing so many of its major and independent chains, citing the demise of Woolworths, Zavvi, Music Zone and Andy’s Records as examples of those that have fallen by the wayside.

The speeches came on the same day that Comet sent another chill wind along the UK’s high streets by announcing that between May and July year-on-sales plunged 22 percent.

The electrical goods retailer intends to reshape 60 of its stores to give more space to small, higher-margin products such as accessories, headphones and small appliances.

It’s a similar move to the one HMV made earlier in the year and will likely put the national chains in closer competition, although HMV’s current sales – down 15.1 percent on 2010 – show no signs of the strategy beginning to work.