Minimum Advertised Price Lives On...In Video
In 2000 the FTC put an end to the major record labels' practice of minimum advertised price (MAP), which set a floor under which stores could not advertise with labels' cooperative marketing funds. Since MAP's demise, consumers have cheered, a class action suit has filled libraries with B-grade product and mass merchants have taken loss leader pricing to new levels.
But MAP does live on. As an article at Video Business indicates, the FTC never got rid of movie studio's MAP policies. "Navigating Around MAP" tells how retailers are discounting below MAP more and more these days. Coop funds are dwindling anyway, giving retailers less incentive to play by MAP. And some chains, such as Target, rely on slotting fees, not ad reimbursements.
The video world has the same issues that music retailers face. "It hurts the specialty retailers more than anything else," one source told Video Business, "because they can’t afford to lose money on ad [support]."
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