Physical media distribution problems getting worse

[Progatron]

I haven't seen this posted/discussed here (or I missed it if it was).

This letter is from July of this year, but from what I can tell, things have only gotten worse. I've only recently become aware of this problem myself, and it certainly does explain some of the missed street dates I've encountered personally. I wonder, does this even affect Amazon? There's been a sharp increase in the number of pre-orders that are getting pushed back on Amazon (Canada), including the new Zappa Halloween box which I'm now told I am not receiving until at least November 1st (of all the idiotic things, the day AFTER Halloween).

Thoughts?


An Open Letter to the Majors From Independent Record Stores


In 2007 things were bleak. Record stores were successful but irrelevant in the eyes of many in the music industry. In response, independent record stores owners got organized and created Record Store Day (RSD). By doing so, the world’s largest music event was established and a billion-dollar-per-year vinyl industry was relaunched. Last year’s RSD was the biggest ever, as were our Black Friday and Small Business Saturday events, breaking all previous sales records. Unsung in the ensuing positive press coverage was the amount of CDs sold on our big day. With so many other businesses leaving the CD behind, record stores are still selling substantial numbers. With the help of our industry partners we continue to adapt and thrive.

Not everything is rosy; things have been rough over the past 3-4 months. Just last week, Michael Bunnell, the owner of Boise’s Record Exchange and President of the Coalition of Independent Music Stores, sent a message out about how bad things have gotten.

But this isn’t about Record Store Day, or a store owner or an independent retail coalition. This is much bigger: It is impacting the distribution of all physical music retail.

Here is what has happened.

In an effort to streamline operations, the majors and the largest independent distributors moved their services to a company called Direct Shot. The admirable goals were to increase efficiency and reduce costs but the results have been terrible:

-- Stores are waiting on new release and catalog orders that were made weeks and months ago.
-- Shipments arrive with a fraction of the CDs and vinyl ordered.
-- Shipments arrive as empty boxes.
-- Artist in-store appearances and marketing campaigns happen without proper product.
-- Special edition vinyl, made for indie stores by the artists who support them, never arrive or come too late.
-- Vinyl and CDs are sent to the wrong stores with no way of getting them returned or reshipped to the correct address.
-- New releases miss the Friday street date by days, weeks and now months.
-- Invoices do not match what was delivered or ordered.
-- Incorrect invoices require payment with no system in place for rectifying the mistakes or for making returns.

The end result has been a lot of misery. Store owners who once enjoyed running their stores and turning people onto music are left trying to make sense of a new system that doesn’t provide customer service or allow humans to communicate and solve problems. All the while, employees who work for the labels and distributors are struggling to function under the strain. The customers who shop at record stores are leaving empty handed, shaking their heads in disbelief. Lost sales, lost credibility and wasted man-hours. It is about as bad as it can be.

This message is a respectful plea to the folks who chose Direct Shot as their warehouse and distribution system. Artists and record stores must be able to depend on the supply chain. Product delivery in a timely, accurate manner should be the most basic priority of a distribution company.

This is a warehouse problem that is affecting every distributor that uses the Indiana-based Direct Shot system. It is a problem that warrants a collaborative, cohesive solution. All shipments are affected. All orders are affected. This is not just a new release problem, it is dramatically affecting catalog sales.

Singular platforms and standards for ordering, billing, shipping, customer service and returns should be developed. The industry came together for Sensormatic source tagging and street date. Rather than have every company trying to solve the same problems, there needs to be a cooperative effort to provide a superior model. It’s all the same barcodes, data and media on the backend.

We realize that work is being done to improve this dire situation, but this letter is a notification that extensive harm has already been done: lost sales, lost customers and lost confidence. We need a solution in the coming weeks to stem more damage to an important part of the music businesses’ ecosystem. We are asking you to please create state of the art distribution now and communicate your progress on the implementation so that confidence can return.

The record stores, artists, labels and fans deserve better.

Thank you for your time and consideration.

Signed,

The Sound Garden, Baltimore/Syracuse; CIMS/The Record Exchange, Boise, Idaho; Rough Trade, Brooklyn, NY; Amoeba Music, Los Angeles; Waterloo Records, Austin, Texas; Twist and Shout, Denver, Colo.; Easy Street, Seattle, Wash.; Newbury Comics, New England; Bull Moose, Maine; ZIA Record Exchange- Arizona/Nevada; Music Millennium, Portland, Ore.; Salzers, Ventura, Calif.; Silver Platters, Seattle; Electric Fetus, Minneapolis and Duluth, Minn.; Down In The Valley, Minneapolis; Monster Music & Movies, Charleston, S.C.; Young Ones, Kutztown, Pa.; Independent Records, Colorado; Graywhale Entertainment- Salt Lake City, Utah; Rasputin Music Chain, Calif., California; Josey Records, Dallas, Kansas City, Tulsa, Okla., and Lubbock, Texas; Vintage Vinyl, Fords, N.J. Rhino Records/Mad Platter, Claremont, Calif.; Tunes Music, Hoboken, N.J.; Homers Music, Omaha, Neb.; Pure Pop, Burlington, Vt.; Lou’s Records, Encinitas, Calif; Strictly Discs, Madison, Wis.; Omega Music, Dayton, Ohio; Dearborn Music, Dearborn, Mich.; Central Square Records, Santa Rosa Beach, Fla.; Indy CD and Vinyl, Indianapolis; Park Avenue CDs, Orlando, Fla.; Plan 9 Music, Richmond, Va.; Cactus Music, Houston, Tx.; Wooden Nickel Records, Fort Wayne, Ind.; Magnolia Thunderpussy, Columbus, Ohio; Looney Tunes, West Babylon, N.Y.; Schoolkids Records, North Carolina; Rock Paper Scissors Goods, Minneapolis; Reckless Records, Chicago, Ill.

[LASERCD]

Yes it affects Amazon as well. It affects all retailers.

Bad situation.

[miamiscot]

This is very disturbing. Direct Shot has been failing miserably.

[aith01]

Wow. Unbelievable...

[Camelogue]

The end is near....

[Adm.Kirk]

Direct Shot, so far, has been a joke. I've been out of some titles for months. Some are late. India.Arie's new CD has been out of stock since June. Ringo Starr's new album only arrived on CD, no vinyl. It is indeed bad.

Bill

[aith01]

Surely the record labels are aware of these deficiencies on the part of Direct Shot, right?

...Right?

[FrippWire]

I work for one of the stores that co-signed this letter and every bit of it is true. What we used to be able to stock in a matters of days is now taking weeks. We haven't seen a Warner Music Group restock order in 6 weeks -- this a vendor we used to do weekly restock orders with. We are forever having to tell customers that the new release they're looking for is getting to us late -- the Tull / Stormwatch box is the latest of many examples. We never got our initial order of Yes / 50 Live (I had to buy my personal copy elsewhere instead of my place of employment). We also see things like an order 5 copies and we get shipped 50 copies or we order 30 of something and we get 30 but it arrives in 30 boxes when all 30 would've fit in a single box. It's a colossal mess. RSD Black Friday will be a good test to see how awful RSD '20 and/or the holiday season could be.

[FrippWire]

Surely the record labels are aware of these deficiencies on the part of Direct Shot, right?

...Right?

They are aware but they've been unable to move the needle in a positive direction as far as I can tell.

[LASERCD]

The issue has been going on for about six months with no solution in sight.

Here is an inside peek at the current state of the music industry...

At this point there are three main record labels (with sub-distributions and sub-labels): Sony, WEA, Universal. Sony and WEA no longer directly do fulfullment to retailers themselves. They have handed off all of their inventory to a company in Franklin, Indiana called Direct Shot. I assume the issue is happening with Universal as well as I've seen missed street dates for new releases for their titles. There are smaller distributors out there like Red Eye, MVD, Naxos that either ship directly to retail or they are also using Direct Shot.

Sony was using Direct Shot for quite some time and there were no real issues. WEA decided to close down their warehouses and hand over all inventory to Direct Shot as well. This is what killed everything. Direct Shot simply wasn't set up to handle the volume and apparently their organization is in chaos. My understanding is part of issue is that the way WEA product was sent over was a total mess. I know that Sony has tried to work with them and I assume WEA as well to clean things up. Nothing has helped.

Alliance Entertainment is the main "one stop" distributor in the US and I believe the largest in the world. One stop meaning they handle all labels - frequently import titles as well. Alliance is also at the mercy of Direct Shot.

What is happening is that Direct Shot is focusing on getting new releases out to retailers in time for street date. From my experience they were successful up until a few weeks ago but I have heard from other retailers not being so lucky. I used to get new Sony distributed releases about 4 days before street date. Lately I've been getting them on street date or after - incomplete shipments are common. Restocks are a significant problem. A year ago I would get a restock from Direct Shot within 3-4 days of ordering. Now it can take 3-4 weeks. So its difficult for a retailer - we have to guess how many we need for an initial order plus add on a number above this because getting the restock can take awhile. Guess wrong and you can be sitting on product or not have a hot title when you need it.

Sony and its subsidiary The Orchard have been forced to frequently bump street dates for releases. Back in April, WEA cut off virtually all direct accounts, forcing retailers to buy product from Alliance. Based on my experience with WEA labels, they are basically throwing up their hands in disgust with no help.

Its a screwed up situation and I'm not sure how much the majors care since it seems they really would rather you just stream digital.

[Garyhead]

Strange times.....you see it with folks having Stormwatch 40th in hand while others waiting....Eloy in hand with others waiting.....Hackett in hand while others waiting....a real crapshoot......maybe the folks who say...."I now have all the music I could possibly ever listen to in my lifetime" portend what will play out over the next 5 years when physical media will disappear.

[Progatron]

Awesome. Seems fair:

Hello from Amazon.ca.

We now have delivery date(s) for the order you placed on September 12, 2019 (Order# ...). We've listed the item(s) listed below with the expected delivery date(s):

Frank Zappa "Halloween '73 (Boxed Set) (4CD)"
Estimated arrival date: November 27, 2019 - January 30, 2020

[JJ88]

Its a screwed up situation and I'm not sure how much the majors care since it seems they really would rather you just stream digital.

I don't have anything mentioned in this thread, but yes. The big shot players in the industry view those who want physical product as an inconvenience. I expect further 'nudges' to move people away from it.

[progmatist]

The saddest part of this saga is it's the artists who are left holding the bag for all losses related to distribution. That's part of any standard recording contract.

Edit: The record companies have zero incentive to keep track of where any product goes. They're not the ones paying for it.

[3RDegree_Robert]

Our stuff at CD Baby (every studio album CD) goes through Alliance I think. No fans complaining to us....yet.


Sent from my iPhone using Tapatalk

[LASERCD]

Our stuff at CD Baby (every studio album CD) goes through Alliance I think. No fans complaining to us....yet.


Sent from my iPhone using Tapatalk

I looked up your band’s inventory at AEC. They have four titles listed. Zero stock on two of them. One copy of one title and two copies of another. AEC is not a factor in your distribution scheme. CD Baby must be doing the heavy lifting for you.

[Trane]

Has anyone encountered the same deficiencies in Europe and/or the rest of the world, or is this a North Am-only issue?

I don't have anything mentioned in this thread, but yes. The big shot players in the industry view those who want physical product as an inconvenience. I expect further 'nudges' to move people away from it.

No doubt, and unfortunately (for us) evironementalists will agree that dematerialisation is a good thing for sustainability

Outside possible conspirationist issues (digital files becoming unreadable , etc...), I don't have any good counter-arguments

[Birdy]

35 years in business and this is the WORST I've ever experienced with distribution and the major labels not giving a shit! Nothing seems to be on time anymore and even regular product is sometimes 3 weeks or more to get back in. It's a joke. Worst supplier in ALL ways is SONY who a) don't keep back-orders as in "please feel free to check back often" b) don't allow you to pre-order when they list a title coming as in "please wait until we open it up for ordering, c) do not allow you to order Sony imports because "at this time our system won't allow it. Check with a rack-jobber" and d) often don't open their titles up until almost the release dates.
I give it another 3-5 years and all retail music stores will be either gone or frustrated and hanging on.

[LASERCD]

35 years in business and this is the WORST I've ever experienced with distribution and the major labels not giving a shit! Nothing seems to be on time anymore and even regular product is sometimes 3 weeks or more to get back in. It's a joke. Worst supplier in ALL ways is SONY who a) don't keep back-orders as in "please feel free to check back often" b) don't allow you to pre-order when they list a title coming as in "please wait until we open it up for ordering, c) do not allow you to order Sony imports because "at this time our system won't allow it. Check with a rack-jobber" and d) often don't open their titles up until almost the release dates.
I give it another 3-5 years and all retail music stores will be either gone or frustrated and hanging on.

Perhaps its different in Canada with regards to Sony. I have no issues dealing with them. The problem isn't them its Direct Shot. I speak to Sony customer service so often I'm on a first name basis with all of their reps. They are just as frustrated with the bottleneck. All the issues you are running into getting product is consistent across the continent.

[jkelman]

Well, Sony just announced today that, due to logistical and production issues, the upcoming Pink Floyd box has been delayed two weeks.

Unfortunately, I suspect that the barrage of special edition box sets, especially since so many have special manufacturing requirements, is creating difficulties in labels getting them on time, even if they’ve planned as best as possible. Add to that, that manufactures often bump smaller labels when a major comes along with a big order..especially at this time of year, when there’s so much material being released.

Without naming names I know more than one label (not majors) that have had to delay planned projects for that reason.

But that Sony has been hit its own issues making the original street date for the Floyd is an indication that it isn’t just small labels who are dealing with increasing lead times to get their products manufactured and distributed in time for release dates. And even then....best intentions and all that...

One thing I would say, having just gone through a huge issue with digital delivery of the latest Grateful Dead ox set: no way could I say dead.net doesn’t give a shit, as some folks here accuse the labels. Things beyond their control, meaning the issue had to be resolved by Rhino, who was reasonably communicative with me as well, and they screwed up twice, so it took longer than expected. Way longer. But to be fair, that Dead box was far from the only product they were dealing with, so I try to be patient and not get pissed at the front line.

[Progatron]

I have a bad feeling that Hot Rats box due for release on December 20th will not be under my Christmas tree this year.

[LASERCD]

Well, Sony just announced today that, due to logistical and production issues, the upcoming Pink Floyd box has been delayed two weeks.

Unfortunately, I suspect that the barrage of special edition box sets, especially since so many have special manufacturing requirements, is creating difficulties in labels getting them on time, even if they’ve planned as best as possible. Add to that, that manufactures often bump smaller labels when a major comes along with a big order..especially at this time of year, when there’s so much material being released.

Without naming names I know more than one label (not majors) that have had to delay planned projects for that reason.

But that Sony has been hit its own issues making the original street date for the Floyd is an indication that it isn’t just small labels who are dealing with increasing lead times to get their products manufactured and distributed in time for release dates. And even then....best intentions and all that...

One thing I would say, having just gone through a huge issue with digital delivery of the latest Grateful Dead ox set: no way could I say dead.net doesn’t give a shit, as some folks here accuse the labels. Things beyond their control, meaning the issue had to be resolved by Rhino, who was reasonably communicative with me as well, and they screwed up twice, so it took longer than expected. Way longer. But to be fair, that Dead box was far from the only product they were dealing with, so I try to be patient and not get pissed at the front line.

John this is a separate issue. Production issues arise and street dates get pushed, particularly when packaging is more elaborate.

What we are discussing is a bottleneck in the distribution of product AFTER its been manufactured.

[jkelman]

John this is a separate issue. Production issues arise and street dates get pushed, particularly when packaging is more elaborate.

What we are discussing is a bottleneck in the distribution of product AFTER its been manufactured.

Yes, but I also cited issues with the digital version of the Dead box, and that does, I think, fit, even if not hard media.

What I’ll say is that distribution is becoming increasingly complex. Look. I’m not justifying when things go totally SNAFU; only that, even after manufacture, distribution is not always simple as it seems. That said, some labels either need to get their act together or hire more customer support people. My feeling is that if they communicated better with their customers, there’d be less grief. I know, speaking for myself, the hours I spent on the phone dealing with the Dead issue is what bothered me the most, nit that there were problems. Sadly, dead.net is two-tiered, it’s customer service only handling making or changing orders, with all else going to Rhino. Despite their all being responsive, the waits on hold and for emails were excessive.

So when there are major releases, I think,part of the problem is not enough customer service agents...and those they have often don’t have enough info to be helpful, so that needs to change. If someone can give me good information and a reasonable estimate as to when a problem will be resolved, I’m cool with that.

Unfortunately, that doesn’t always happen.

Is that better?

[jkelman]

I have a bad feeling that Hot Rats box due for release on December 20th will not be under my Christmas tree this year.

Actually, if you’re talking about production, I think they were smart. Most labels want their product by late November at the very latest, so manufacturers start to slow down, at least as I understand it, in early December. So it’s quite likely it’ll be there for ya, if this is what you mean .

[Progatron]

Actually, if you’re talking about production, I think they were smart. Most labels want their product by late November at the very latest, so manufacturers start to slow down, at least as I understand it, in early December. So it’s quite likely it’ll be there for ya, if this is what you mean .

I'm talking about it being available on release date (December 20), which has been the major problem the last several months - almost everything I've pre-ordered recently (regardless of the vendor) has been pushed back because nobody ends up having in stock when they are supposed to.

It's not a production issue from where I'm standing - Lately I've had some review copies in hand weeks or even months before release date (I've had Stormwatch since September 6 I think, and some people still won't have it for over two weeks), because those are mailed directly from the labels, there is no middle-man distributor grinding the proceedings to a halt.