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November 22, 2005

A (No-So) New Distribution Outlet [10:19 am]

With Custom CDs, Retailers Hear Cash Registers Jingle [pdf]

Custom CDs aimed at promoting a retailer’s brand have been growing since the mid-1990s. Rock River alone has shipped more than 12 million albums in the last decade, all to non-music retailers. This year, analysts estimate that stores such as Restoration Hardware, Polo Ralph Lauren and Kohl’s will distribute more than 20 million albums bearing their company names.

Retailers say the albums serve as inexpensive advertisements and make money. On average, stores pay $4 each for the Rock River compact discs, then sell them to customers for about $15.

“Shoppers think of Victoria’s Secret every time they slip our CDs into their stereo and relax,” said Ed Razek, chief creative officer at the lingerie giant.

“How else could we get advertising that intimate? And we make a few dollars on every CD we sell.”

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