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Record label creates 'new' method of CD/digital sales

Nonesuch Records, a division of Warner Music Group Corp. (NYSE: WMG), is joining other record labels under the Warner Music banner by creating a new website designed to bypass the digital retailers and maintain physical sales, according to Billboard. The new service was launched this week with the release of the soundtracks to Tim Burton's Sweeney Todd and Paul Thomas Anderson's There Will Be Blood.

The attempt by Nonesuch and Warner Music to sell digital tracks directly to consumers with the purchase of the physical versions of the music is not the first time this method has appeared. The program follows this plan according to Billboard and the label's storefront is the following description:

"Buy the latest Nonesuch CDs on the Nonesuch Store and get:
The CD of the album shipped to you
A free digital download of the album with every CD purchased
Your choice of Standard (128 kbps) or Audiophile-Quality (320 kbps) downloads at no extra cost
Exclusive digital bonus tracks on select album included at no extra cost"

A plan like this was previously attempted by a company called AnywhereCD, which had agreements with Warner Music that were terminated after the arrangement to sell CDs and give away high-quality MP3 tracks was announced. What the above description does not talk about is the disuse of Digital Rights Management technology, the anti-piracy software the labels encode into digital music and other media files.

The arrangement, which is nearly identical to the one Warner Music stopped AnywhereCD from using will apparently include DRM-free tracks, Billboard reports. In any case, though the store requires consumers to buy a CD to accompany the digital files, at least one more music company is testing the possibility of eliminating the use of the anti-piracy software. It is a late minute addition to the holiday season, but it is still in time to capitalize on consumers hoping to load up their new MP3 players with music as a result of the holiday season.

Warner Music's advertising strategy

Warner Music Group (NYSE: WMG) may be in a lawsuit with online retailer AnywhereCD, but the company is doing something right, and that appears to be their advertising. With the coming summer music season, all of the major albums by big artists are being released. Warner will release Linkin Park's third album Minutes to Midnight on May 15th, a highly anticipated album by the rock sextet.

The company appears to have taken the enormity of that band into their consideration of how to best market the album. The biggest change in album marketing I've noticed is the appearance of TV commercials that feature the new single "What I've Done" over the album art, followed by the release date (I've rarely seen a new album by such a large band marketed this way). Additionally, the album has been available for pre-order on Apple Inc.'s (NASDAQ: AAPL) iTunes Store since mid-April, well before pre-orders are typically made available, and features "secret bonus tracks" that are exclusive to that store. In my local Best Buy (NYSE: BBY) store's weekly ad this morning, the album is also available for pre-order and carries special pre-order offers. The album is still two weeks from being released.

These rather minute advertising successes may not increase album sales, but they certainly increase the awareness listeners will have of the album and the release. That is what makes Warner's success this month vital for the company, especially as their prices slowly rise. Last week alone they increased steadily to gain nearly a $1.

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Last updated: February 11, 2012: 01:18 PM

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