What’s this? Journey put a new record out and I wasn’t informed?

On Tuesday Wal-Mart started selling on an exclusive basis a three-disc collection by the popular 1980s band Journey called “Revelation.” The difference, however, is that there is no middleman: the album was bought directly from the band without the help of a record label. Journey went right to Wal-Mart and kept most of the money a record company would normally take as profit for the group. Last year Wal-Mart made a similar deal with the Eagles, who like Journey are represented by Front Line Management, the nation’s largest music management company.

The deals highlight the changing dynamics of the music industry as once-powerful labels decline because of the migration to digital downloads. To fill the gap, musicians are scrambling to connect with fans, and Wal-Mart is using these exclusive deals to assume a new role: hit maker.

The Eagles’ double disc, “Long Road Out of Eden,” sold 711,000 copies in its first week and three million since its release, according to Nielsen SoundScan, impressive numbers at a time when CD sales are declining. Journey sold 45,000 albums in its first three days on sale, and Irving Azoff, founder and chief executive of Front Line Management and a music industry veteran who ran MCA Records in the ’80s, predicted that it would sell more than 80,000 copies in its first week. That is probably enough to debut in the top five, and significantly more than its last album sold in total.
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The idea of treating the label as a middleman that can be cut out fits Wal-Mart’s approach to cost-cutting. In the past the chain has pushed record labels to lower their wholesale prices, arguing that customers would buy more CDs if they were less expensive. [NYTimes.com]

Photo: thomasexciting

Apple today announced that the iTunes Store surpassed Wal-Mart to become the number one music retailer in the US, based on the latest data from the NPD Group*. With over 50 million customers, iTunes has sold over four billion songs and features the world’s largest music catalog of over six million songs.

Look out Wal-Mart, Stevie’s breathing down your neck.

iTunes is now the second-largest overall music retailer — online or offline — in the United States, behind only Wal-Mart, according to research the NPD Group released yesterday.

After Wal-Mart and iTunes, the top music retailers in 2007 were Best Buy, Target and Amazon, in descending order.

As popular as iTunes has become, NPD reported that legal music downloads accounted for just 10 percent of all music acquired in 2007. In addition, 29 million consumers used legal pay-per-download sites last year, up from 24 million the previous year. [Internet.com]