The Eagles join, Madonna, Nine Inch Nails, Radiohead, and others in dropping the record labels and going direct to consumers. The Boston Globe has an excellent original story about The Eagles decision to ignore the record labels and instead make a deal with Wal-Mart to be the exclusive distributor of the CD. Don Henley, lead singer of The Eagles, told the Boston Globe;
"This just makes business sense," says Don Henley. "With the disappearance of large record store chains, Wal-Mart is now the largest CD retailer in the world. And if people don't want to buy from Wal-Mart, they can buy directly from us at the website."
Napster was ahead of its time - Back in my Napster days there were several big name artists interested in working with Napster to sell their music directly to customers. They were tired of giving up the vast majority of their CD sales revenue to the big record labels. Even the most successful music acts only got about $2 from every $20 CD sale.
Those artists who wanted to work with Napster were still under contract to the big labels. As soon as their contract expired they wanted to go direct with Napster and sell their music for $1 per song...a lot better that $1 to $2 per CD in royalties. Madonna, Green Day, Limp Bizkit, MC Hammer, Courtney Love, and several other artists talked to Napster about doing a distribution deal.
The record labels are failing to adapt to the new realities. They have had 7 years to figure it out and for the most part they haven't changed a thing. They are still suing their customers, charging high prices for CDs, and giving the artists meager royalties. With big names like Radiohead, The Eagles, Madonna, and Nine Inch Nails make announcements like this it signals a significant change in the music business.
Napster lives...7 years after its untimely death.
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