For months, Wal-Mart has been the one bright spot among retailers struggling through this recession. Today, the mega-retailer known for deep discounts joined the others with the announcement that December same-store sales only increased by 1.2 percent – well below analyst expectations. Excluding fuel, the sales figure was only slightly higher at 1.7 percent.
Even worse, Wal-Mart has lowered its current-quarter forecast based on projections of further reduced consumer spending. The announcement shocked Wall Street and drove Wal-Mart (WMT) stock down 7.49 percent to $51.38.
Slower sales at Wal-Mart can have grave implications for the music industry, especially on the recording side. While exclusive deals with legends like AC/DC and the Eagles over the last year have proved successful, similar distribution efforts are difficult to scale across the entire industry. Just look at the Best Buy’s recently disappointing deal with Guns & Roses as evidence of what can go wrong. Plus, shelf space at Wal-Mart stores is increasingly valuable and physical music units are not creating the revenue to keep their space safe. Wal-Mart is currently the largest retailer of physical music, so any reduction in inventory could leave labels vulnerable.
Such forecasts for the next year require the industry to look for other revenue sources. Licensing and touring appear to be the best options.Touring is still thriving, despite the problems with the music industry and our country’s current recession. ArtistForce can help you increase your touring dollars. With solutions to streamline the booking process, more shows can be booked in less time. The reduced cost in touring can then make up for areas where revenue is sagging. Whether you’re an artist, booking agent, promoter, venue, or manager, you can change your forecasts for 2009.
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