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> Warner pulls CDs from Tesco stores; Source: MW
Topic Started: Oct 19 2010, 02:34 PM (34 Views)
Mikey
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Buzzjack
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Warner Music has spectacularly fallen out with Tesco over proposed new trading terms, resulting in the retailer not stocking any of the major’s new releases.

A repackaged version of Michael Bublé’s multi-platinum Crazy Love, which is released today (Monday), has become the first key Warner release to be hit by the dispute and will not be available in any of the supermarket’s 800-plus UK stores selling music.

Unless a settlement is quickly reached, other forthcoming Warner albums by acts including James Blunt, Cee-Lo Green, Katherine Jenkins and Rumer will also be affected by the row, which has been sparked by what the music company says are “unacceptable” new trading conditions offered by Tesco.

Warner Music UK CEO Christian Tattersfield says, “They came to us wanting to renegotiate the terms and conditions and these were not economically viable for Warner Music.”

However, the dispute has taken a curious twist because Tesco entertainment director Rob Salter claims the first time he became aware negotiations had broken down was when Music Week told him of Warner’s position. According to Salter, the two sides “weren’t that far apart”.

“To be honest I’m quite surprised,” says Salter who has already negotiated Q4 terms with the other three majors. “We’ve been talking to Warner about Q4 and about terms and conditions and certainly weren’t aware they had effectively ceased trading with us. They certainly hadn’t told us that.”

Despite this apparent breakdown in negotiations, already-released Warner albums, including Paolo Nutini’s Sunny Side Up and Plan B’s The Defamation Of Strickland Banks, which are respectively the third and sixth biggest-selling albums of the year to date, will continue to be stocked by Tesco as these come under previously-agreed terms. But the dispute could now hit what Warner believes is a very strong Q4 line-up.

“We’re very confident with our release schedule, but we are not prepared to be bullied and we believe, unlike some people, there’s an incredibly strong future for music,” says Tattersfield.

The Warner executive will clearly be keen to get the dispute resolved as soon as possible given his rivals will now have the distinct advantage of having their new albums stocked by Tesco while his will be missing, but he is holding firm on not agreeing to the new conditions.

“I’ve no idea how long it’s going to take, but the bottom line is we’re not prepared to do deals that don’t make economic sense,” he says.

The dispute comes four years after another fallout between Tesco and the major over trading conditions, which similarly resulted in new Warner albums being barred from the supermarket’s shelves, including titles by My Chemical Romance and P Diddy.

Since then the retail landscape for music on the high street has changed dramatically with key players such as Woolworths and Zavvi having gone out of business, leaving Tesco as one of the few physical retailers left selling music.

Given its more powerful position when dealing with music companies, the supermarket under Salter has adopted what could be described as a more aggressive stance, repeatedly warning labels the space Tesco provides for music in its stores could decline.

“In the end we’re not forcing anybody to do anything,” adds Salter. “We actually think we should be on the same side here and we need to find a solution for us to take music in the future. It cannot be lost on anybody the space devoted to music by retail has shrunk alarmingly. We think there’s a solution, but that has to be done collaboratively with our clients and ourselves. If Warner think the best thing for them is their releases shouldn’t be stocked in Tesco then that’s their choice.”

The tougher stance by Tesco comes against the backdrop of the supermarket’s attempt to sign deals with artists to sell their albums exclusively, a trend more common with retailers in the US. Although deals have been struck with Faithless, Simply Red and Nadine Coyle, whose first album outside Girls Aloud is released on her own Black Pen label through Tesco on November 8, these are all acts who self-release and Salter has publicly acknowledged he has “struggled” to secure exclusives with artists signed to labels.
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Stewie
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I posted a reply to this on the MW web site. Good luck with that Warners, you'll need it.
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