“Physical retail distribution is dictated by a business model that no longer works for either the customer, the artist or the label,” Rubber MD David Vodicka said in a statement. “It’s also anti-competitive. We can’t sell-in direct to the biggest national retailer JB Hi Fi, we have to go through a third party distributor with an account. Distributors take a minimum cut of 25 percent, and we have to pass that onto the consumer. There’s no point in engaging in this model as it currently stands. We’ll consider it in the future, but only if it works for us."A final liquidation of stock is planned for 15 May.
These developments provoke moral outrage in people nostalgic for the era of plastic discs. It's tempting to buy into that debate but I don't know that there's much more to say. Discs are a storage and distribution technology. They'll cling on for as long as they're needed.
A more interesting discussion is: what will the role of labels be in the post-disc era? I've been asking myself this for a while. I've released many cds, tapes and vinyl records over the years, but probably won't any more, and my most recent release was mp3-only, partly as an experiment to see what it would be like to promote such a beast.
Labels traditionally paid for recording, manufacturing and promoting discs. These costs were recouped through sales of the discs. Now /soon, recording is cheap, manufacturing is unnecessary, and sales revenue is greatly reduced. The concept of label may be reduced to the middleman between bands and the iTunes store. Will anybody be willing to pay for promotion of mp3s? In whose interest will it be?
Good luck to them, but I think they're stupid. I don't understand their distributor argument. Why not sell CDs directly on their own website? Why not do limited runs? Why not combine their new digital service with physical product as many other indies are doing? (CD for $10, CD plus digital for $15, digital only for $5 for example). Everyone seems to be able to manage this with vinyl limited runs.