May 19, 1973
Disk Execs Study Dual Q'
Inventory As RCA Hedges
By CLAUDE HALL
LOS ANGELES
The record industry is faced with another double inventory record situation in spite of everything that RCA Records has been doing to try to prevent it.
Last week, even RCA Records was discussing the possibility of dropping its single inventory-and price policy on compatible quadrasonic albums. There were two reasons: First, confusion at the dealer level. A spokesman for the record company said, "There is no doubt that we're finding some dealers putting our Quadradiscs in an isolated bin with other quadrasonic records and not also stocking them in the regular stereo bins by name of the artist.”
RCA Records has 24 discrete Quadradiscs on the market presently and will have “easily another 30-40 Quadradisc albums on the market by this Fall.”
Thus the record company might be losing many sales from regular stereo customers.
Another reason RCA may be forced to go to a double inventory is the fact that the WEA group of labels. Warner Bros., Elektra, and Atlantic, went to a double inventory. By establishing a single inventory policy, RCA had hoped to set the policy for the industry and thus, by sheer weight, eliminate stereo completely fast. However, the decision by the WEA group, who're also into the same CD-4 discrete system as RCA, to go to a double inventory—and double prices—sort of pushed RCA into a comer.
RCA felt "there's no question but that an educational process is needed at the dealer level to educate him to the fact that Quadradiscs should be stocked at both places—not only under stereo, but under quadrasonic. We had no problem with the recent Elvis Presley album … it sold more than a million units even though it was a 2-LP set. But that particular album was generally placed near the cash register because it was such a big seller.”
Sticker Help
What the RCA executive didn't mention was the fact that the label, either on purpose or inadvertently, took no chances. The LP jacket carried the designation "VPSX-6089 STEREO” and on the outside of the shrink wrap was a sticker that read: "Certified compatible: stereo/4-channel recording. Designed for high performance on any stereo or discrete quadraphonic system."
Many record labels look at the double inventory idea as a "mess" and hope it doesn't become a widespread reality. At least three record company executives said that their decision (still pending) on which system to go for quadrasonic—SQ matrix, QS matrix or CD-4 discrete will be based on "avoiding the double inventory problem.”
Stan Kaven, vice president for CBS Records which developed and marketed the SQ matrix system and charges a dollar extra for quadrasonic albums, said: "All of us look forward to the day when there will be only one record. But, because of the extra costs involved in quadrasonic, there must be a two-step process.”
Bob Kornheiser, vice president of tape sales for Atlantic Records, said
WEA would stick with their double inventory and dollar higher price for quadrasonic, even though, at the same time, Dave Glew, vice president of sales for the label, wishfully hoped that the label could “go a different direction in the future.”
Felt RCA Erred
RCA made a mistake, Kornheiser felt, "when they didn't raise the price on their quadrasonic record. There's certainly more justification for a price increase between stereo and quadrasonic than there was between monaural and stereo, because of the vastly increased costs." He pointed to the costs of tooling up for the different compound necessary for quadrasonic albums, and the increased costs in mixing the records." He said some albums were costing $20,000 to $50,000 additionally in mixdown charges alone.
"Thus, to charge the same price for a quadrasonic album as a stereo album is ridiculous. I can only surmise that RCA wanted to establish quadrasonic in the market place and figured to come out ahead in the long run. But that type of thinking would be impractical for us. So, how do we avoid double inventory? Can anybody answer that? There's no way out of it.” But even Kornheiser hoped that the double inventory situation could be phased out at the point “when it pays to put everything out in quadrasonic." The one great factor in the whole double inventory situation, Kornheiser said. is that "the CD-4 discrete record is really compatible."
Field Staff Teaching
RCA, meanwhile, is hoping to be able to avoid a double inventory sit-ation by a vast educational campaign and even now its 40 field representatives are visiting dealers to alert them to marketing procedures for the Quadradisc—specifcally, that it should be racked along with regular stereo albums as well as in special quadrasonic
displays.
At the same time, several other labels are "on the fence" regarding quadrasonic records. CTI Records stepped down from the fence last week with the release in SQ matrix of its "Deodato" album. But Gil Friesen, vice president of administration for A&M Records, said, "It's premature to say that we're close to making a decision on which system to become involved in ... whether Sansui or dis-crete. But the retailer is very concerned about having to stock a double inventory. That will be a factor in any decision we make."
In light of the troubles RCA is having at the dealer level with the confusion about quadrasonic versus stereo, Friesen said: "A pity, since they have the system that would eliminate all double inventory problems.”
A&M Holds back
A&M has been holding back on two albums, one by Quincy Jones and another by Rick Whitman, pending a decision on quadrasonic. Earlier, the company had distributed a Carole King album on Ode Records in Sansui matrix quadrasonic and quadrasonic sales were 12,000, a rather small figure in comparison to the sales in stereo of the same album. Her "Tapestry" album, which wasn't in quadrasonic, sold around four million units, for example.
Vanguard Records reports that its quadrasonic product is beginning to grab on very strong on a one-to-one basis in classical music "and it's also catching on in the pop field. The SQ matrix system does everything we want. There may be confusion now about which system will win, but in the end it's got to be SQ,” said Herb Corsack, vice president of sales and promotion.
Marvin Schlachter, head of Chess/ Janus Records, said he was thinking increasingly of quadrasonic and had “examined both systems but are still sitting on the fence. We haven't felt the market strong enough yet to put any records out."
But, at the very moment
contacted, he was sitting with producer John Schroeder talking about quadrasonic and said that the firm which put out his tapes wanted to put out quadrasonic tape cartridges of Chess/ Janus product.
Glew wanted to impress upon the industry the great need to "try not to get too excited or crazy” about quadrasonic, "recall the days when everyone flooded the market with 8-track cartridges and over-supplied the demand?”
