Beginning in September, all San Diego--area Borders stores will begin taking a 40 percent cut of musicians' revenue generated by CD sales. In the past, Borders has allowed artists to pocket all of the money made from discs sold during in-store performances.
"WHAT A RIP-OFF!!!" e-mails Simeon Flick. He has performed at Borders stores in Mission Valley, the Gaslamp, Carlsbad, El Cajon, Carmel Mountain, and in New York. Flick writes that CD sales were his only source of income from those engagements. "I sold my CDs at my Borders gigs for $10 a pop." In the new deal, he writes that Borders "would end up keeping 4 bucks on every CD I sold."
Borders regional marketing manager Mike Gibb says that under the new system, customers can still purchase a CD from an artist, but they have to pay for it at the store's cash register.
"It's a standard policy that was implemented last year in Borders stores throughout the rest of the country," says Gibb.
flick goes off on borders
Though unsold CDs would go home with the performer at the end of the night, the proceeds from any CDs sold will remain in the register.
"The store then submits the invoice to the home office and a check is cut for the amount, less the 40 percent and any sales tax," Gibb says. Turnaround time on payment? "Usually 30 days."
What about passing the 40 percent cut along to the consumer?
"The answer is a resounding no," Flick writes in a later e-mail. "I charge $10 for my CDs. It probably only cost about $6 per unit for me to produce them. I'm not in this game to make a killing, just a living. To pass this burden on to my potential fans doesn't rub me the right way." Flick says that he will continue to perform at Borders but that he will no longer offer CDs there.
Guitarist Jim Earp e-mails that he will no longer perform at Borders because of the new policy. "I can't see raising my CD prices only for the Borders stores and then bringing them back down for other venues." Earp, who sells CDs via the Internet, says, "If I did raise my prices, my Internet label would be selling them cheaper than I would!"
Singer/songwriter Michael Tiernan says he'll pass on Borders' new deal.
"I certainly understand the position of the performers who say they can't do this anymore," says Gibb.
Has Borders experienced any long-term fallout?
"In other parts of the country, we did find that, yes, there was a drop in the number of musicians who wanted to play at our stores, and then after a while the number of people playing picked up again."