Brooks’ ‘Gift’ Alarms Some in Industry

Garth Brooks is at it again.

The country music superstar, who keeps his concert ticket prices among the lowest in the business, is creating a buzz in the record industry--and, he hopes, excitement among consumers--by pricing his upcoming boxed set at a fraction of the cost of similar packages.

Titled “The Limited Series” and due Tuesday from Capitol Nashville Records, the six-CD collection will sell for as little as $27.85 in some retail outlets, slightly more than the typical cost of a two-CD set. (Six-CD sets usually would retail for $60 to $100.)

It’s clearly a bargain and almost certainly will bring truckloads of country fans into record stores. Capitol Nashville says initial retail orders, which the label expected to reach about 750,000 copies, have topped 1.8 million.

But not everyone is cheering.

Many industry observers fear that establishing such a deeply discounted price on the set will feed the long-held perception among consumers and retailers that CDs in general are overpriced by record companies. What’s best for Brooks’ fans, they say, might not be what’s best for the industry.

Scott Levin, director of marketing for the Musicland Group, the nation’s largest record retailer, says the discounted Brooks box will have a “devaluing effect” on similar packages. “And, unfortunately,” he adds, “none of the other boxed sets are going down in price.”

Pete Howard, editor and publisher of the ICE CD newsletter, says the low-ball pricing will raise a red flag among record buyers.

“For consumers, this justifies the argument that CDs can be sold for less,” he says. “They’re going to look at this and say, ‘If the record company can afford to do this with Garth Brooks, why aren’t all the other releases this cheap?’ ”

The short answer, says Capitol Nashville President and CEO Pat Quigley, is that this is a “once-in-a-lifetime promotion” made possible only because of the willingness of everyone involved to accept reduced profits. Although Quigley would not comment on Brooks’ normal royalty rates, he said Brooks and the label will make only about 10% of what they would have made if the boxed set were fully priced or if the albums were sold separately.

Profits for retailers, distributors and packagers also were cut, as were the amounts paid to songwriters and publishers. For example, the packager charged less than one-third of its usual rate of $1.92 for the box that holds the CDs.

The cost of manufacturing and packaging a CD, according to industry insiders, is about $2, on top of which a label must pay artist and songwriting royalties and marketing costs, which can be astronomical, before it can begin to post a profit.

As can all CDs, the Brooks set can be sold at any price a store decides on, but the low wholesale price and market competition are expected to keep retail prices in the $28-to-$40 range during the first few weeks of release and no more than $49.95 thereafter.

“This is not a good business venture,” Quigley says. “It’s a gift from Garth to his fans.”

Says Brooks, who has sold more albums in the U.S. than anyone other than the Beatles: “It’s a thank-you to the people who have supported us.” He says he wants to allow people to catch up on his older albums “without breaking their backs.”

The box contains all of Brooks’ first six albums, along with six new tracks, including the singer’s version of Bob Dylan’s “To Make You Feel My Love,” which is the set’s first single and is also part of the soundtrack to the upcoming Forest Whitaker film, “Hope Floats.” Also included is a 64-page booklet.

Quigley says Brooks, his eyes on new technology, proposed the idea of a discounted boxed set after deciding to cease production of CDs of the six individual albums. Brooks hopes to reintroduce the albums starting next year in a new software format that would combine audio and video and could be played both in existing CD and DVD (digital videodisc) players. Capitol Nashville stopped taking orders for the individual CDs on Friday.

Quigley thought Brooks’ boxed set plan was brilliant, believing that it would build loyalty among the singer’s existing fans while also possibly expanding his fan base by serving as a cheaper introduction for anyone not already familiar with his music.

“I’m not looking to make money on everything I do,” Quigley says. “I’m a chess player, as opposed to a checkers player. Sometimes you have to make some extra moves before you capitalize. . . .

“If it gets a lot more of Garth’s music into a lot more homes, that’s probably a good investment.”

Even with some retailers expected to sell the package for as much as $39.99, Quigley says, he’ll be disappointed if “The Limited Series” doesn’t sell at least 100,000 copies during its first week in stores--an unprecedented figure for a boxed set. Production of the collection will be limited to about 2 million copies, and the label’s goal is to sell out before Christmas.

Says Brooks: “It’s the perfect Christmas gift that hopefully won’t be available at Christmas.”

“The Limited Series” is a discounted sales item, says Quigley, like a cut-rate six-pack at a liquor store or a shirt that’s been marked down at a department store. It is priced to move quickly, he says, and the consumers he has talked to seem glad for the opportunity.

“In all our many hours with focus groups,” he says, “not once did anyone say, ‘I was right; you’ve been robbing us all these years.’ It never came up. This is such a shocking price that people were saying, ‘Wow, what a value.’ . . .

“It is never a bad business move to do something good for your customers. Never.”