The Eagles team up with Wal-Mart. How dare they.
Wall Street Journal
Sunday, November 25, 2007 12:01 a.m.
One of the most popular rock bands of all time has finally managed to offend--not for its songs, but for how it sells them. There's a lesson here in technology, new business models, and hidebound "progressives."
The first new album from the Eagles in over a decade, "Long Road Out of Eden," has already sold more than a million copies, hitting Billboard's #1 in its first week. It's the kind of blockbuster that used to pay Christmas bonuses at the big record companies, only this album wasn't produced by a big record company. The Eagles released it themselves and are selling it exclusively through Wal-Mart.
This isn't going down well in certain elite precincts. Music blogs accused the group of selling out, while a review in Rolling Stone opined that there is an "inevitable contradiction in buying a record that attacks corporate greed . . . from a superchain with a bleak record on employee rights and health care." A piece in the Boston Herald noted that "The deal will make the Eagles richer. But it could cost them cool points (if the aging rockers have any left)."
So how can Don Henley, an environmentalist who wrote a song mocking Ronald Reagan, embrace a middle-American retail colossus out of favor with enlightened opinion? How can the #1 album not be available in New York City, where politicians have blocked Wal-Mart from opening even a single store? "You would have thought we did a deal with the devil," Mr. Henley says. "People have been crying out for a new paradigm. So we did something new."
That something turns out to be good business. In cutting out the record company, the band cut itself in for a bigger share of the per-album profits. While it might have expected fewer sales from restricted availability, that doesn't seem to be happening. Wal-Mart's retail price of under $12 for the two-disc album has allowed smaller retailers to stock up on the album at Wal-Mart and then resell them with a markup.
The Eagles aren't the first to try new ways to sell a record. Garth Brooks signed an exclusive deal in 2005 with Wal-Mart and has sold millions of records. Beyonce has released an exclusive DVD through the store. Joni Mitchell and Paul McCartney are selling their music through Starbucks. Billy Joel's daughter, Alexa Ray, is trying to establish her own music career by doing an exclusive with Target.
These and others are evidence that Napster and its filesharing successors weren't the death of the music business but a smart bomb that forced the creation of new delivery models. Apple's iTunes is the most famous. But the Web has allowed thousands of bands to find new audiences, and even create global niche brands. Thanks to the Internet, a Norwegian metal band named Enslaved has been able to fill small town bars and auditoriums in the U.S.
Alas, some rockers sound like old fogies complaining that nothing is as good as it used to be. KISS's Gene Simmons says he can't be bothered to go into the studio anymore because the business model that made him rich no longer works. As he told Reuters recently, he blames filesharing: "Every little college kid, every freshly-scrubbed little kid's face should have been sued off the face of the earth. They should have taken their houses and cars and nipped it right there."
We believe in property rights as much as anyone, but when technology is changing, businesses have to change too--and that includes the business of music. So let's applaud Mr. Henley, Glenn Frey, Joe Walsh and the other Eagles for some creative capitalism, however politically incorrect.