Warner 'stopping CD distribution here'

Retailers said they have been told of Warner Music's decision and fear that other big labels may follow suit. Sony Music has outsourced its storage and distribution functions.
Retailers said they have been told of Warner Music's decision and fear that other big labels may follow suit. Sony Music has outsourced its storage and distribution functions.ST PHOTO: NEO XIAOBIN

Industry insiders say it may be due to falling sales as fans turn to online music sources

The Singapore office of Warner Music - one of the major music labels along with Universal Music and Sony Music - is no longer bringing in CDs for sale and distribution here.

This is what insiders in the local music industry - retailers and other labels - have heard. When contacted, Warner declined comment.

In the last year, it released albums by Stevie Nicks, Ed Sheeran, Jolin Tsai and Singapore's JJ Lin, according to its website. Other local musicians signed to it include Reuby and hip-hop duo SleeQ.

While the other labels are still bringing in CDs, The Straits Times understands that Sony no longer handles the storage and distribution of CDs to shops here. It has engaged a company for those functions.

A veteran in the music industry, who declined to be named, said Warner's decision was made last month. Retailers have also been told of the move, and they say it is likely due to falling CD sales worldwide.

HIGH COSTS

I can totally understand Warner's position. To bring in a CD, you have to pay for freight, GST, the warehouse to store the CDs, as well as distribution cost. If the sales volume is not high enough, it actually doesn't make financial sense to do so.

MR NGIAM KWANG HWA, managing director of record label and concert organiser Rock Records

A spokesman for HMV Singapore said it was notified of Warner's move a couple of weeks ago, and of Sony's move last year. Said the spokesman: "We will need to make slight changes by importing the CDs in the case of Warner.

"For Sony, we can still get them locally supplied by MM2 (the company engaged by Sony). But some titles may be late, or on a rare occasion, not released."

Mr Ho Chan Sian, 60, the owner of Memphis Music, a CD shop in Coleman Street, learnt about Warner's move two weeks ago.

He said: "It will be less convenient for us because we will not be able to draw stocks from Warner like before. We will have to turn to wholesalers to get CDs of artistes under the Warner label."

Consumers in the United States, the world's largest music market, bought 257 million albums last year, an 11 per cent drop from 2013.

At Universal, sales of physical CDs in Singapore for the first half of this year have fallen 8 to 9 per cent, against the first half of last year.

Said Ms Kim Lim, the head of marketing and sales for Malaysia and Singapore at Universal Music: "The market has evolved from physical sales towards digital distribution.

"Digital is more affordable and easier to access. The consumer can also get it more quickly, instead of having to wait for CD stock to be ready in stores. There are also very few stores nowadays as retail store rents are increasing year by year."

Said managing director Ngiam Kwang Hwa, 55, of record label and concert organiser Rock Records: "I can totally understand Warner's position. To bring in a CD, you have to pay for freight, GST, the warehouse to store the CDs, as well as distribution cost. If the sales volume is not high enough, it actually doesn't make financial sense to do so."

Both Universal and Rock still bring in CDs for distribution. Ms Lim said: "We still believe some albums - that have nice packaging, exclusive content and limited-edition packaging - are collectible items."

But Mr Ngiam expressed concern that Warner's move is the beginning of an unhealthy outlook for the industry. He said: "My worry is that another one of the big labels will also stop bringing in CDs. Then the distribution system might change, and we might be forced to react."

Music fans were not surprised by Warner's move.

Public servant Tan Wei Ye, 28, has not bought a CD in more than 10 years. He said: "Nowadays, I buy my music mainly from iTunes. I also use Spotify, Soundcloud and Bandcamp, and listen to music on YouTube sometimes. You can just buy the individual songs you want, instead of having to commit to the full 10 or 12 songs on a physical CD. It doesn't make sense to go to the physical CD shop any more."

A version of this article appeared in the print edition of The Straits Times on August 01, 2015, with the headline 'Warner 'stopping CD distribution here''. Print Edition | Subscribe