Ettu,U2

Rip It Up, Issue 136, 1 November 1988, Page 4

Ettu,U2

I was a little disappointed to read your article on U2: The Pricing Dispute in month's issue of RIU. ~ ' I work for one of the companies that took Festival to court and followed the case very closely. Our basic principle for proceeding with the action was that we objected to having a wholesale supplier telling us in effect what price we had to sell their product at. . Record retailing is a tremendously competitive business — as everybody in the industry will attest. If our customers thought we were overcharging on a particular item then they could easily go down the road and compare prices. Festival, however, can charge the retailer what they like for their product, and if we want to buy it (and what record shop could afford to miss out on stocking the likes of U2 ?) our margins are regulated. We, of course, are not allowed to buy the product they j 7 distribute elsewhere. If the roles were reversed and Festival's wholesale price was regulated by the retailers, I wonder how they would feel? I also thought it was naive for RIU to accept Jerry Wise's implication that • Festival were defending their position "for the consumer". Festival have adopted their marketing strategy of cheap records because they think they will make more money out of it that way, not because of any altruism. - Retailers adopt their various marketing strategies for the same reasons, but at least we don't try and make out like : we're "doing it for the kids." I applaud RlLfs attempt to cover an important issue in the music business, but I do wish that it could have been handled in a slightly more serious manner. ? ' . ' 7 PeterFarnon ’■ /