iTunes To Test New Gift Cards In Stores
August 27, 2007 at 5:46 AM (PT)
In a move to enhance its already prodigious stature as a music merchandiser, APPLE will lead a test this fall that places artist -- and album-specific ITUNES gift cards -- in brick-and-mortar retail stores, reports REUTERS.
The ITUNES gift cards, according to label and retail sources, will each feature specific album covers against a standard DVD-size cardboard backing. Albums by MAROON 5, NORAH JONES and EDDIE VEDDER are under consideration for inclusion in the tests, which will run at SAFEWAY, STARBUCKS and BEST BUY. WAL-MART and TARGET have been approached, but there is no word on whether those merchants will participate.
The test creates a dilemma for the major labels. On one hand, executives like the possibility that the gift cards could get music into stores that don't carry it now. They also like the increased exposure for their artists. Yet they foresee a role for the gift cards in stores that already carry music, but where music selection and CD sales are being reduced by store closures, inventory realignments and the CD format's oncoming obsolescence.
One major-label distribution executive noted that when CD sales ultimately get weaker, anything that encourages music buying is to be welcomed.