Wal-Mart and other discounters: Cultural oligopsony?

In a recent New York Times article

Wal-Mart and other discounters: Cultural oligopsony?

In a recent New York Times article (“Shaping Cultural Tastes at Big Retail Chains,” May 16, 2003), reporter David Kirkpatrick reveals the surprising power in books, music, and DVDs held by a few national discount retailers. The biggest player is Wal-Mart, but stores like Target, and K-Mart, along with discounters Costco and Wal-Mart’s Sam clubs.

In what one publishing executive calls “a seismic shift in the market,” it is these mass merchandisers that can make and break new books, CDs, and DVDs. These companies “often account for more than 50 percent of the sales of a best-selling album, more than 40 percent for a best-selling book, and more than 60 percent for a best-selling DVD.” And the audience they appeal to, not the traditional cultural elites, are determining more and more what gets published.

And unlike Borders, Barnes & Noble, and Tower, which carry a little of everything for everyone, the mass-marketers but only a limited range of products for their stores. They carry, according to Kirkpatrick, fewer than a thousand different titles in each category (in some cases, around 100), and they are even more ruthless than the specialized chains about returning product that doesn’t sell immediately. Moreover, the companies, especially Wal-Mart, act as gatekeepers to keep out anything that might offend their customer base (for example Eminem is banned from Wal-Mart, and Wal-Mart demands that other artists released pre-censored versions of their albums (rap star 50 Cent) and DVDs (“Y tu mama tambien”). But it’s not just sexual content that gets banned Cheryl Crow’s album was banned after she criticized Wal-Mart’s gun sales.

Publishers, record companies, and movie makers are becoming more and more dependent on these companies, especially on Wal-Mart. Most of the music companies have offices in Bentonville, Arkansas, Wal-Mart’s headquarters. Book publishers are gearing more and more books to what will sell well in these stores. And all companies are bending over backward to please Wal-Mart and other buyers, self-censoring many books and starting Christian imprints and other lines that will appeal to the small-town, religious, family values of the patrons of these stores. (It’s no surprise that right-wing political books from authors like Ann Coulter and Bill O’Reilly are big sellers at these stores.)

Wal-Mart and the others have perfected the art of the oligopsony, making demands on its suppliers and standardizing choices. They are now doing the same with these media companies. The underlying motivation, one favored evangelical Christian producer notes, is to have a major impact on popular culture. “That is our goal, to impact the culture of this country.” That’s their right in an open market of course, but it’s interesting how silently it is happening. A few companies have increasingly have power over American cultural expression, and, to some extent, political expression, and few people are noticing.  [Oligopoly Watch]

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