A dispute between EMI and HMV in Canada means music by artists signed to the major and the independents it distributes in the territory is becoming more expensive in the flagship retailer's stores. That means CDs from the likes of Nickelback, Janet Jackson, Norah Jones, Sum 41, Radiohead and Sarah McLachlan are rising in price from anywhere between $2 and $10.
The dispute revolves around the volume discount HMV is demanding from EMI. Such a discount enables the retailer to compete with the supermarkets on the mainstream new releases. The major says it cannot afford to meet HMV's discount demands, and the retailer in return says it is therefore unwilling to subsidise the major's releases at their end.
Although both sides are guarded in speaking about the dispute for commercial reasons, HMV Canada president Humphrey Kadaner has told The Canadian Press: "EMI chose to reduce the level of support that they had previously offered HMV. That means we can't give EMI distributed products the same level of "value-added" support as we give other labels".
EMI argue they haven't increased their CD prices - rather sales of their music at HMV has fallen by 25% in recent years so they are unable to offer the same bulk buy discount. Label head Deane Cameron told reporters: "It's not fair for us to have trading terms that reward HMV for their volume if their volume is not there. HMV is selling a lot more DVDs these days. That's why we're getting elbowed out. We asked them to consider different trading terms. That wasn't received too well and we appear to be in the penalty box. It's disappointing for artists to be punished to this extent."
It's not the first time HMV Canada have got into a dispute with a major label over price point - a similar dispute with Warner Music two years ago led to the retailer withdrawing their catalogue from their stores completely. Commercially speaking both sides are trying to protect their profit margins in a declining market. However Terry McBride of independent label Nettwerk, whose music is distributed by EMI and therefore affected by the dispute, argues both sides lose out when they start to argue in this way.
"It's extremely short-sighted because people are already buying less and less CDs. The reason why HMV and EMI are having this little tussle is because EMI margins have been shrunk, the marketplace is shrinking and every player in this business needs to come to terms with that and be part of the solution - not get into these stupid little trade wars. Nobody wins."