Wal-Mart Takes on iTunes -- But Who's Listening?

[MacBytes]

Category: Opinion/Interviews
Link: Wal-Mart Takes on iTunes -- But Who\'s Listening? (http://www.macbytes.com/link.php?sid=20040330131348)
Posted on MacBytes.com (http://www.macbytes.com)

Approved by arn

[RHutch]

Could someone please post the full article? I could only read the first page.

[adamjay]

Booo.. i can only read the full page too.. and i'm not subscribing.

you know Walmart never ceases to really get me P.O.'d
My girlfriend likes to do our grocery shopping there because it is cheaper and i tell her the reason it is cheaper is because Walmart is the worst Union-buster out there, and when you don't have to pay your employees a fair wage, you have more room to lower prices.

so i wonder, now that Walmart's music store is 88 cents per download... there goes any chance of their web admin's, programmers to join unions too. Its so correlative... Pay your employees Nil so that prices can be Nil and you will beat the competition. But if employees join unions, you cant pay them Nil anymore and thus you will not beat the competition. So don't allow the employees to join unions and you will be at the top of the Fortune 100. ARGH.

[winmacguy]

Booo.. i can only read the full page too.. and i'm not subscribing.

you know Walmart never ceases to really get me P.O.'d
My girlfriend likes to do our grocery shopping there because it is cheaper and i tell her the reason it is cheaper is because Walmart is the worst Union-buster out there, and when you don't have to pay your employees a fair wage, you have more room to lower prices.

so i wonder, now that Walmart's music store is 88 cents per download... there goes any chance of their web admin's, programmers to join unions too. Its so correlative... Pay your employees Nil so that prices can be Nil and you will beat the competition. But if employees join unions, you cant pay them Nil anymore and thus you will not beat the competition. So don't allow the employees to join unions and you will be at the top of the Fortune 100. ARGH.


If you dont like ****ty pay from stacking supermarket shelves then get out there and go to University or college and get yourself a university degree. Unions are only "good" for the worker but not for big business or the economy. They create an artificial environment for the worker forcing the company to pay the worker more than they are actually worth in a competitive market. With higher rates of pay for lowly skilled workers doing basic jobs selling products with very minimal margins, your labour costs become too high and your profit margins non existant. In the case of walmart they make their HUGE profits by being the biggest, most prolific retailer in the US pumping out a huge volume of stock on very low margins.

[wdlove]

I've never even been in a Wal-Mart store. I think that when it comes to music, Apple is a more trusted name.

[adamjay]

If you dont like ****ty pay from stacking supermarket shelves then get out there and go to University or college and get yourself a university degree. Unions are only "good" for the worker but not for big business or the economy. They create an artificial environment for the worker forcing the company to pay the worker more than they are actually worth in a competitive market. With higher rates of pay for lowly skilled workers doing basic jobs selling products with very minimal margins, your labour costs become too high and your profit margins non existant. In the case of walmart they make their HUGE profits by being the biggest, most prolific retailer in the US pumping out a huge volume of stock on very low margins.

firstly, you assume that i work at a supermarket? WRONG.
secondly, you assume that i have no education that would give me a job outside of a supermarket? WRONG.

Example A:
Small town, centrally located amidst other small towns (a typical target of walmart). A mechanic that was once making oh lets say $35,000 a year, has been forced out of work because Walmart moved in and the penny penchers that people are.. they'd rather pay $40 for a tune up instead of $46, oh yea and have it done while they go do all their shopping (to the detriment of other small businesses), all so they can save 45 minutes of their precious time to insure they wont miss the first 5 minutes of "Friends". Now that Mechanic is forced to work AT Walmart for $23,000 a year because he has been a mechanic his entire life and Walmart is the only place where he can utilize his trade.

You see, its the WALMART CULTURE that is destroying America. And anyone who's rebutle is the knee-jerk "if you dont like it then get an education" is obviously drowned in the 12% savings they've made at Walmart over the last decade. are you really that much better off?

i'll do my shopping at Target, who pays their employees a FAIR wage and allows them to join UNIONS. Sadly, even IF Walmart allowed its employees to join a Union, they wouldn't make the $300+ Billion a year they have been, but i guarantee you they'd still be on top of the Fortune 100. They are just Greedy, and at the expense of the worker.

[winmacguy]

[QUOTE=adamjay]firstly, you assume that i work at a supermarket? WRONG.
secondly, you assume that i have no education that would give me a job outside of a supermarket? WRONG.

My apologies adamjay, I worded my post incorrectly. I was not trying to assume that you were the one with the low paying job stacking shelves in Walmart. I was talking about people in that position and expressing my views on Labour Unions and Walmart.

[winmacguy]

firstly, you assume that i work at a supermarket? WRONG.
secondly, you assume that i have no education that would give me a job outside of a supermarket? WRONG.

Example A:
Small town, centrally located amidst other small towns (a typical target of walmart). A mechanic that was once making oh lets say $35,000 a year, has been forced out of work because Walmart moved in and the penny penchers that people are.. they'd rather pay $40 for a tune up instead of $46, oh yea and have it done while they go do all their shopping (to the detriment of other small businesses), all so they can save 45 minutes of their precious time to insure they wont miss the first 5 minutes of "Friends". Now that Mechanic is forced to work AT Walmart for $23,000 a year because he has been a mechanic his entire life and Walmart is the only place where he can utilize his trade.

You see, its the WALMART CULTURE that is destroying America. And anyone who's rebutle is the knee-jerk "if you dont like it then get an education" is obviously drowned in the 12% savings they've made at Walmart over the last decade. are you really that much better off?

i'll do my shopping at Target, who pays their employees a FAIR wage and allows them to join UNIONS. Sadly, even IF Walmart allowed its employees to join a Union, they wouldn't make the $300+ Billion a year they have been, but i guarantee you they'd still be on top of the Fortune 100. They are just Greedy, and at the expense of the worker.

Actually it is called the "Laws of Economics" and living in a free and democratic capitalist society, where the person who is able to put their idea to work and make money out of it ends up being the most successful person in town.

If you lived in a Communist country you wouldnt have to worry about yourslef or anyone else being to rich ot too excited to go to work because you would all be in the same boat(except for the politicians and congressmen/women who put you there)

We have a similar situation in NZ with our biggest Warehouse suppiler (namely "The Warehouse") who because of their size and buying/retailing power are able to squeeze a lot of smaller businesses out of small towns for the same reasons. The Warehouse in NZ is also known for its low pay rates as a result.

However just because they do this doesnt always mean that they sell the best high quality products in their stores. It is usually the opposite. They do a vast trade because a majority of the population are low to middle income earners who try to make their dollar go further by buying cheaper goods. If you want and can afford to buy higher ticket items you go to a more expensive store.

[adamjay]

no worries.. its an emmotional subject indeed.
i just see the correlation to low prices and no unions, compare that to the unionized competitors and to me it just seems like a really important issue to Walmart to allow these rights to its employees.

it stinks to me. also, in the case of many Walmart workers who have attempted to unionize in the past, all they wanted were health benefits... they were perfectly fine with the wage for the work they were/are putting in. So unions are more than entities to force companies to pay their worker's more, and in some cases that is all they do (yes unions can become a form of business, i dont agree with it), but in many it is the only way for a worker to get a fair deal.

[rjwill246]

Because of the monopolostic system that we have encouraged, Walmart, et al are no longer forced to compete on a level playing field as once they have leveraged themselves into the monopolies that they are and while there is a large pool of un/under employed as we have now, they are able to pay below subsistence level wages, buy from China and poor 3rd world countries (see how many toys in Walmart are US or European made) at rock-bottom prices and offer the public prices that are incredibly low- and because we have a population that is getting poorer and poorer, these people now MUST shop at the Walmarts of the world- we end up with an inbuilt system of institutionalized poverty that will, given its direction, ultimately destroy us. The US today is so much poorer than it was in the 80's: the health care system is on its knees, the Walmarts of the country are indeed flourishing because it is the only salvation of the working poor (even though they have helped create the very people who depend on them- talk about travesty!) and so back to Apple: I hope they can make it past the illegitamacies of the Walmart 'ethic.' We are really in sad times.

[RealityMonster]

firstly, you assume that i work at a supermarket? WRONG.
secondly, you assume that i have no education that would give me a job outside of a supermarket? WRONG.

Example A:
Small town, centrally located amidst other small towns (a typical target of walmart). A mechanic that was once making oh lets say $35,000 a year, has been forced out of work because Walmart moved in and the penny penchers that people are.. they'd rather pay $40 for a tune up instead of $46, oh yea and have it done while they go do all their shopping (to the detriment of other small businesses), all so they can save 45 minutes of their precious time to insure they wont miss the first 5 minutes of "Friends". Now that Mechanic is forced to work AT Walmart for $23,000 a year because he has been a mechanic his entire life and Walmart is the only place where he can utilize his trade.


It's even WORSE than that. They often set up shop in small towns, drive everyone out of business, and then to keep costs low, LEAVE TOWN. They close the WalMart down, and force everyone in the small town to drive one town over to get all their shopping done. It's happened dozens of times. It's not just bad for the small business people, it's bad for the consumer. They just don't realize it until it's too late.

Forget it. I'd rather pay more somewhere else. Saving a dollar doesn't help me sleep any better at night, so I'm happy to part with it.

[michaelrjohnson]

whew!....

and as for the music store:

i agree with the title in saying "who's listening?" Apple IS (believe it or not) a major name in the consumer-side of music buyers. wal-mart is cheap, but this whole debate like above will happen over the music store too, so really, i dont' beleive that wal-mart will "take over" iTMS, but rather strengthen apple's position.

[Sun Baked]

What I really want to see are the Wal-Mart vs. MicroSoft articles, it was eventually going to happen...

Looks like the Music space is where they'll have their first big scuffle.

[Gymnut]

If I recall, Walmart stores only carry the clean version of CD's. I really don't care much for radio edits so I wonder if their on-line store follows suit with their brick and mortar stores.

[Jerry Spoon]

I think that when it comes to music, Apple is a more trusted name.

I don't think that many people who shop at WalMart are concerned about trusted names. They trust that WalMart is saving them a couple bucks. I would think many of the people who end up using WalMart's music service are people who have never used an online music service before. I'd venture to say that there are a noticable number who have never even heard of an online music store before they hear of WalMart's.

[solvs]

I've said it before, and I'll say it again... doomed to failure. Online music is a luxury. Cheap people are going to be buying cheap devices and CDs. Or d/l music for free through P2Ps.

And people blowing a buck a song for music aren't going to bother with saving 11 cents for a crappy service.

The iPod is a status symbol. It's cool, it's easy, it works. It's a niche item to fill a niche field. That's something that places like BuyMusic and Wal-Mart (and Virgin and Coke) aren't getting. The only people who really know a lot about places like Napster are the people who've long since moved on to Kazaa (well, Kazaa-Lite, etc). :rolleyes:

[Savage Henry]

I've said it before, and I'll say it again... doomed to failure. Online music is a luxury. Cheap people are going to be buying cheap devices and CDs. Or d/l music for free through P2Ps.

And people blowing a buck a song for music aren't going to bother with saving 11 cents for a crappy service.

The iPod is a status symbol. It's cool, it's easy, it works. It's a niche item to fill a niche field. That's something that places like BuyMusic and Wal-Mart (and Virgin and Coke) aren't getting. The only people who really know a lot about places like Napster are the people who've long since moved on to Kazaa (well, Kazaa-Lite, etc). :rolleyes:

Couldn't agree with you more there, squire.

A company like Sony opening an online store would be interesting, but these cowboys bore me and any self respecting muzic luvva. Until somethings rival the iPod and iTMS, I'm not interested.

[shamino]

Let's face it - who cares? If well-established names like Roxio/Napster can't make a go of it, why should Wal*Mart? They may have a chain of brick-and-mortar stores that people buy lots of stuff at, but this doesn't necessarily translate to on-line success. Especially when their web site has a reputation for being significantly more expensive than their stores.

But let's take this at face value anyway. They claim they're going to be selling songs at 88 cents each. All of them? Or just the super-savers that nobody wants anyway? buymusic.com tried this scam and it blew up in their faces.

But let's be generous and assume they really mean 88 cents per song for everything.

Industry analysts say that Apple's profit from ITMS is about 10 cents per song. If Wal*Mart is going to sell for 12 cents less than that, they're going to have to cut their costs to less than Apple's. But what can they possibly cut?

50 cents of every transaction goes to cover credit card fees, so that's not negotiable. I suppose they could force you to use PayPal or a Wal*Mart line of credit, but that would seriously hurt their sales. How many of you trust PayPal after all of their recent scandals? And how many of you would want to take out a new line of credit solely for the purpose of buying music from one store?

Apple pays about 39 cents per song in the form of royalites to the record labels and to run the network. I highly doubt that Wal*Mart can run a massive download network better than Apple, especially when Apple can buy XServes for the manufacturing cost and doesn't have to pay for support and maintenance contracts. So the price cut is going to have to come from the music industry's royalty.

Do you think the recording industry is going to let Wal*Mart use liberal DRM like Apple when they're getting reduced payments? Do you think you'll be able to burn unlimited CDs? Do you think you'll be able to burn CDs at all? Do you think you'll be able to move your songs to a new computer when you upgrade? :rolleyes:

I can think of two other ways to be profitable, but those are even more likely to spur a backlash from their customers.

They can make themselves a subscription service. If you stop paying your monthly fee, all your songs expire and become unplayable. This method was tried by groups like PressPlay - it failed miserably.
They can require a proprietary player that shows you advertisements. Ad revenues at playback time can compensate for losses at the point of sale. But if they do this, they won't be able to use an industry-standard file format (like AAC or WMA). Real tried this approach and it also failed miserably. People won't use a file format that they can't load into their portable players or use with their favorite player software.
Trust me, this is going to go nowhere. Either Wal*Mart will end up charging a lot more than 88 cents for the songs people actually buy, or there will be so many strings and DRM restrictions that they'll end up in the same boat as Napster and buymusic.com - both of which were also predicted to hurt Apple, when they started, if you remember.

[wowser]

Speaking as a European, it would be nice if Apple actually opened a music download store in Europe. :mad:

[Fender2112]

Got milk?

No. Can I share hers? ;)