The Survivor's Guide to CD Club Membership
Mar 7, 2002 (Updated Apr 12, 2002)
I decided to write this review after reading about the negative experiences with BMG that some other reviewers have had. I thought it might help to provide some information about what to expect from this and other CD clubs, as well as what to avoid and how to make the best use of them.
As with any merchant, the amount to which BMG will meet your needs as a music consumer will depend on what you expect from it. If you want to be able to buy a new release on the same day it arrives at your local Sam Goody, then BMG will disappoint you. If, however, you are willing to wait a while for that release -- and willing to put up with some of the quirks -- then BMG might well be a great choice for you.
HOW CD CLUBS WORK
A music club like BMG operates by licensing recordings directly from a variety of manufacturers. Music clubs offer these recordings at a substantially reduced cost, even when you factor in the notorious shipping and handling fees. (Even with shipping and handling factored in, most full-price CDs end up costing savvy members about $7.50 - $8.00 each.) Certain record labels eagerly get into these arrangements because record clubs move lots of product, allowing the labels to bump up their "number of units sold." CD clubs also allow the labels to get exposure for some of their up-and-coming talent.
Because the average price of a CD purchased through a club is so low, some labels require a substantial time delay before the work of their most popular artists is made available. Their reasoning is probably that when it comes to their blockbuster talent, they don't really need the club sales to boost the numbers. Instead what they do is require that some number of months pass before the clubs are allowed to carry these releases. By that time, a particular CD's days in the Top Ten might be waning and a club's extra sales potential might hold more attraction. (Sometimes this delay can last up to a year, and I should note that some top-name artists refuse to make their music available to CD clubs at all, possibly because the clubs' low prices result in too great a loss of royalties.)
Because not every label enters into a licensing agreement with CD clubs, you will never be able to find a club that offers everything that's available out in the "real world." (This is especially true when it comes to releases on independent and foreign labels.) As a result, you will find that CD clubs carry releases mainly from the bigger labels that have U.S. distribution. In addition, not every release from these labels will be made available.
There was an interesting turn of events at BMG a couple of years ago, when they began to feature releases from the Sony family of CD labels. Sony is the parent company of BMG's biggest club competitor, Columbia House, and until then Columbia House had had exclusive rights to releases from subdivisions of Sony such as Columbia and Epic. Up until that time I'd considered joining Columbia House just to have access to these CDs, so I was delighted when BMG announced the Sony licenses.
What is different about music club CDs
When it comes to these music clubs, an obvious question is whether the product you buy from them is the same as what you find in your local stores. Those low, low prices just can't help but make you suspicious.
The first point to make in this regard is that CD clubs like BMG do not manufacture the CDs that you buy from them. The discs, inserts, and cases all come from the original manufacturers, although sometimes with a slightly varied look and/or packaging. The most notable differences are:
The UPC. If you look at the back of a CD purchased from BMG, you'll see that the UPC (the barcode that most stores scan to get the price) is different from its retail counterpart -- in fact it is a BMG barcode that says something to the effect of, "Manufactured for BMG Direct ... under license." This different barcode has two purposes. First, it allows BMG to operate its warehouse more efficiently. (If you think there are mistakes in order fulfillment today, just imagine how it was before the advent of scanning devices.) Second, it allows the manufacturers to quickly identify the product that they have sold to BMG. As it happens, many record stores are allowed to return unsold retail CDs to distributors for credit. Since BMG CDs look practically identical to retail product, without the different barcodes it would be possible for unscrupulous store owners to pass them off as actual retail merchandise, returning them to the distributor for an undeserved refund. BMG's custom barcode provides distributors with a safeguard.
The inserts. Sometimes BMG's version of a CD will skimp on the packaging that comes with it, perhaps by including a different or slimmed-down version of the paper insert. In my experience this has most frequently happened when the release in question is packaged in an extravagant, unusual way. In such instances the scaled-back packaging is an unfortunate but expected by-product of the fact that you're getting the CD for about half the retail price. This might not matter to you that much -- it certainly doesn't to me.
The CD case. This is an instance where I'm actually grateful for the BMG difference. Lately some CDs are released in cardboard fold-outs rather than plastic cases. I have found these cardboard cases to be of limited value because with normal use they deteriorate too fast. When releasing its own version of such a CD, BMG will usually replace the cardboard case with a plastic one. Yippee! I for one like that very much.
No annoying plastic strip along the top edge. I don't know its official name, but I'm sure you know what I'm talking about: that strip along the top of the CD that is a pain to peel off and keeps you from opening the CD properly until you succeed in doing so. (It's there to allow the title of the CD to be visible when browsing through a bin from overhead, but I also suspect that it's tough to remove on purpose, for security reasons.) Anyway, only rarely do BMG versions of CDs have this strip. Yippee again!
The label on the silver compact disc itself. The label printed on the compact disc itself is usually identical to the one you'd find on the retail version except for one thing: the catalog number. Whereas the store version will have the label's standard catalog number for the release, the BMG version will usually have BMG's catalog number.
What is NOT different about music club CDs
With all this said, I want to make a point of noting what is exactly the same about the CDs you buy from music clubs like BMG.
The content of the CD. BMG does not offer abridged versions of retail CDs, although I should note that if a label puts out a "special edition" of a particular release (such as a version with bonus tracks or a second bonus CD) then in all likelihood you won't be able to get this from BMG. Like the special packaging that some CDs get, this is one perk that just isn't possible given the lower price-point of record club CDs.
The quality of the disc. The quality of the materials and the quality of the sound of the silver discs is identical to the discs you buy at retail. This is because it is actually to the manufacturer's advantage to have it this way, since to do otherwise would require added expense. As things stand, they simply use the same raw materials and processing equipment to turn out a disc that is identical except for the catalog number.
In the days of the LP, it is true that the quality of the vinyl records you'd buy from a record club could indeed be less than what you'd find at retail. This was because in many cases, the LPs sold by the clubs were ones that were stamped toward the end of a pressing, using masters that had started to wear out. The result was an LP with skips or a noisy surface. With CDs, since the music is digitally encoded the entire concept of a "worn master" can be disregarded -- it just doesn't apply. The data on every copy of the CD master has 100% integrity and reproduces the contents of the master precisely. As a result the sound produced from the disc is identical to its retail cousin.
So, the actual CD itself is the same as the one you'd get in the retail store, and the packaging is not always exactly what you'd get in the store (in some good ways and bad ways.) In the end you need to decide how much this matters to you. I suggest that you think of it this way: if there does turn out to be a slight difference between the BMG version of a release and the retail version, are you willing to pay an extra $4.00 to $10.00 at the store to get the higher-end version? My answer to that question has always been no.
HOW CD CLUBS MAKE MONEY
So, if clubs like BMG are able to sell CDs so cheaply, how do they make money?
One part of the answer to this question is "direct marketing." That is, by selling the CDs directly to you, BMG cuts out the middle-tier retailer. This reduces the amount that the CDs need to cost in order to bring in a profit.
The other part of the answer lies in both the "hidden charges" and those convoluted contracts that you enter into when you sign up. It all starts with the introductory offer. Everyone is familiar with the "Buy 12 CDs for 1 cent" deal -- this is the bait that clubs like BMG use to reel you in. If you read the fine print, though, you realize that you will get those 12 CDs for a penny provided that you (1) pay for shipping and handling, (2) agree to buy some number of "full priced" CDs within the next year or two, and (3) agree to respond to a "featured selection" offering each month or end up having it shipped to you automatically.
Since these three things are a huge basis for a CD club's profitability, we should examine them a little more closely.
(1) The shipping and handling charges. Here of course we have the most famous "gotcha" in the CD club business, the pricey shipping and handling per CD. ("Handling" refers to the materials and labor for packing your order.) The dirty little secret is that BMG doesn't pro-rate these charges for a multiple-unit order. Instead, you get charged another instance of the same rate for each CD in your order; the rate does not go down as you add more CDs. So, in the case of the introductory offer, even though it appears you are buying 12 CDs for a penny, BMG still ends up charging you roughly $2.79 per disc for delivering them. That amounts to about $33.50 -- not exactly my idea of a penny!
Simple arithmetic shows that you're still paying only $2.79 per CD, so in the end you're still coming out way ahead of the retail prices for those same CDs at Sam Goody's, but it's still aggravating to think that they structure things this way. Why can't they just be upfront about the price that you really pay? The answer is simple -- marketing. In addition, the clubs figure that some number of people won't read the fine print and will instead get hooked by the promise of something for nothing. As a smart consumer you just have to resolve that you'll always think of those CD prices as a combination of what BMG advertises the price to be, plus the shipping and handling charge. If you can get past the ruse and take this in stride, you'll find that life with BMG can be very good indeed.
As for why clubs like BMG depend on a pricing structure that uses shipping and handling fees to pad their profits, one theory I heard recently is that the licensing that the clubs negotiate with the labels stipulates that the labels' cut of the profits is based only on the asking price of the discs and does not include the shipping charges. Therefore, after BMG charges you $5.79 for the CD plus $2.79 to mail it, the percentage they pass along to the CD's manufacturer is based only on the $5.79. This sounds like a plausible explanation to me although I guess it still leaves the clubs looking a bit sneaky.
(2) The purchase contract. Of course, in exchange for the 12 CDs for $33.50 (I won't insult you by insisting on the "penny" part), you will be obligated to buy some number of additional CDs in the coming months. What's up with that? Well, if you don't buy those extra CDs within the stated amount of time then BMG will invoice you for the 12 you got when you joined. That could amount to $200.00 or more.
And this, quite simply, is another way that the clubs make their money. They can always count on some percentage of members to fail to fulfill their contract and hence get invoiced for their introductory order. If BMG happens to have a member's credit card on file (very common these days) then the result is not just an invoice, but a charge to the card. Ouch.
(3) The featured selection. Along with the infamous shipping and handling charges, the requirement to respond to a featured selection is another notorious feature of CD clubs. Each month (sometimes more frequently) the club alerts you to this "featured selection." While you must pay full price for this CD, if you opt for it then you usually get to choose two more CDs "free." The alert about the featured selection will come via postal mail or email. Either way, each time it arrives, if you don't want the featured selection then you are obligated to refuse it (either by mail or via their website) by a specified deadline, usually about 3 to 4 weeks. If you fail to do so, the club will ship you the CD automatically.
This turns out to be yet another big profit maker for the clubs. What they count on is that some percentage of members will forget to respond by the deadline and then be too lazy or confused to return the unwanted selection when it arrives. And, again, if they have your credit card on file then they will have already charged you by the time you receive that CD. In the end a sufficient number of members fall prey to this and the clubs come out ahead. The profits climb even higher when you realize that any member who receives a CD automatically has purchased it without taking advantage of the free extras that could have come with it. This means that the club rakes in even more dough.
HOW TO BEAT THE MUSIC CLUBS AT THEIR OWN GAME
What follows below is my time-tested advice on how to belong to one of these clubs and save money. There's nothing illegal or shifty here -- I guarantee that you'll be following all their rules. You'll just be smart about it.
I've been a member of BMG since 1994. I've purchased hundreds of CDs from them over the years, to the tune of thousands of dollars. The survival hints below I learned through much experience.
Rob's Top 10 Rules for CD Club Success
(1) Fulfill your contract within the first 3 to 6 months. There's no getting around the contract, so at least get it out of the way as soon as possible. Once you do, the club will classify you differently and you'll have access to better prices and sales. The best deals that BMG has offered me so far are "80% off everything" and "70% off everything, with free shipping and handling." The first time that "free s/h" deal showed up I couldn't believe it.
(2) Don't try to fulfill your contract all at once -- do so one month at a time. Wait until the "current sale" includes a requirement to buy one CD at full price, then do so -- and be sure you also take advantage of the "get two free" or "get three free" that comes along with it. This makes fulfilling the contract a lot less painful.
(3) Immediately contact the club's customer service department and ask for the "positive option" on your account. The positive option is the industry term for canceling the automatic shipment of featured selections. Every CD club, including BMG, has a positive option. The only catch is that they don't tell you about it, so you must ask. The best way to ask is to call their customer service directly and speak with a live person. This way you can be sure it gets done. BMG's customer service number is no longer toll-free, but I believe it is well worth the long distance charge to get the positive option on your membership. If you miss getting charged for just one unwanted CD then you'll come out ahead. So, with that said, here is BMG's customer service number: (317) 692-9200.
(4) Try to get them to invoice you for each shipment rather than use a credit card they keep on file. As long as they have that credit card on file, you lose a bit of leverage if your order gets lost or you want to return something. Plus, when you don't pay for your shipments ahead of time via credit card, you don't have to worry about how they'll settle your account when you mark unwanted packages "Return to Sender" and mail them back. So, contact BMG's customer service at (317) 692-9200, speak with a representative, and request the positive option. (You might find, however, that you'll first need to fulfill your contract before they'll give in.)
(5) Always factor in the shipping and handling charge when calculating CD price. This is the Golden Rule of BMG membership. You should always add $2.79 to whatever price is featured on their website or in their catalogs. (BMG's own website now has a calculator that actually does this for you.) Don't let yourself get all worked up about the ridiculousness of the masquerade -- just smile, do the math, and determine the real price of each CD. It will usually come out to $7.50 - $8.00 per full-price disc, depending on the CD and the terms of the current sale.
(6) Watch for clearance items. BMG's clearance prices vary from $1.99 to $3.99 -- plus shipping and handling, of course. Sometimes there are some real gems to be found in the clearance section of the website or in an occasional mailing.
(7) Buy only CDs from the club, nothing else. Stay away from the calendars, posters, t-shirts, and other such goods that BMG occasionally dangles in front of you. BMG contracts out the fulfillment of these orders to third-party companies and their responsiveness is often worse than anything you can attribute to BMG. Plus, their prices are hardly ever discounted off of retail. There's really no point to buying from them unless you absolutely can't find the item anywhere else -- and with the web that shouldn't be a problem.
(8) Don't buy any multi-CD sets comprised of more than 4 CDs. For some reason, when the number of CDs in a set numbers 5 or more, sale prices cease to apply and you must pay a set "special price" that is usually anything but special. Even with sets consisting of 3 and 4 CDs there has been a little hanky-panky lately with BMG's pricing structure -- sometimes "percent-off" prices simply cannot be applied to certain multi-sets. I haven't got this one totally figured out yet.
(9) When the current sale starts with "Buy one...," never include a multi-CD unit in your order. When the current sale is something like, "Buy one, get two free," BMG will always consider the one you actually pay for to be the most expensive item in your order. Since they count a 2-CD set as "one item" in this case, your 2-CD set will be priced in full and you'll get a far worse deal. (Of course, if your "two free" items are also 2-CD sets you're okay.)
(10) If you can, wait for the "percent-off everything" sales. The best sales at BMG are the ones where you simply take a percentage off the price of everything -- no need to "buy one" at full price to activate the sale terms. The percent-off sales can range from "2/3 off" to "70% off" or, on rare occasions, even more. These sales are the best deals for multi-CD sets too, for the reason I explained in number (9) above.
PLUSES AND MINUSES OF BMG MUSIC SERVICE
In addition to the tips above I'd like to offer the following list of pluses and minuses of membership with BMG.
Pluses of BMG
Low prices. Even when factoring in the shipping and handling charges, if you follow my advice then the price per CD at BMG is about 1/2 to 2/3 of what you'd pay at retail.
Music Points. "Music Points" are credits you earn from BMG for buying CDs. Typically, you earn one Music Point per CD you buy (not counting clearance items.) When redeeming the points, one Music Point equals one dollar that you can apply toward free CDs (although you do pay shipping and handling -- of course.) The catch here is that when you redeem the points, BMG treats the item as though it is at full price, regardless of the current sale. In addition you can't split the cost of a CD between money and Music Points -- if you don't have enough Music Points to pay for a release, you can't get it for free yet. Still, it's all about free stuff so I'm not complaining.
Clearance items. There seems to be little predictability to what BMG lists in its Clearance section on the website or in its catalog. The prices are great, though -- $1.99 to $3.99 per CD plus s/h.
Minuses of BMG
Shipping time. Yes, despite the expensive shipping fees, BMG's default shipping method is USPS Media Mail. This is generally the s-l-o-w-e-s-t method just this side of asking you to drive to North Carolina and pick up your order yourself, but if you're not in a hurry then this won't put you off too much. For those who are eager to get their CDs sooner, you can opt for faster shipping methods for a not-too-bad fee that is charged per order and (surprisingly) not per CD.
Delayed availability of new releases. As I mentioned earlier, the very latest CDs don't show up at BMG right away. Sometimes it can take months.
Some CDs are never offered. BMG's back catalog is huge, and you can access it in its entirety at their website. Still, independent labels and many mainstream titles simply never appear. If your taste runs to local bands or other independents then BMG may not be worth your trouble.
Some CD cases sometimes arrive damaged. I'm not sure if this is something that's really BMG's fault, since the packaging they use for mailing is made of thick cardboard and a lot can happen to a parcel once it's in the hands of the USPS. (Also, I don't know if I'd consider a cracked plastic case as truly "damaged".) Still, since some reviewers here have complained loudly about damaged merchandise from BMG I thought I should mention this. It might matter to you.
NOTES ABOUT THEIR WEBSITE
Speaking of their website, here are some its pluses and minuses.
Access to new releases sooner. BMG updates their website regularly. It is more likely that you'll find new releases here long before you receive your catalog from them, plus on the website you can view the new releases in other music categories besides the one that you've assigned yourself to.
Access to BMG's full back catalog. BMG's full current catalog is accessible via the website. For any given sale, you can apply the sale terms to anything they have listed.
You can sample the music. Many releases include an ability to listen to a 30-second sample of some or all tracks. This helps a lot when trying to decide on releases from less well-known artists.
Access to all genres of music. When you join BMG, you sign up for a particular music style and they send you information mainly on releases in that genre. At the website, though, you can browse everything, from rock to classical to Christian, country, and jazz.
Special deals. Via the website you can easily take advantage of special deals that BMG alerts you to via email. Most often these are one-day sales, but sometimes the specials last for a week or more.
Lousy search engine. The search engine is very limited. Often you have to "outsmart" it in order to find what you want, especially when you need to try to figure out how they would categorize a particular classical CD.
Its pages and frames can take a long time to load. I personally don't think the response time of the website is that bad, and my home internet connection is a dial-up. However, with that said, some people do find that the site is too slow.
Tiny type, tiny pictures. BMG recently revamped the site and for some reason they have resorted to smaller typefaces and images. The pics might be smaller in the hope of making the website load faster on your web browser, but since they're smaller they are less clear.
Non-intuitive. Like the search engine, sometimes finding a particular area on the site requires thinking like BMG would -- which might seem like a scary proposition.
MY BOTTOM LINE
The ratings I attached to this review are based on following my own advice and utilizing BMG properly.
Price: Overall I rate the prices "Very low." With CDs costing roughly 1/2 - 2/3 of retail, it is hard to beat them. When you consider their prices for clearance items, they're a veritable bonanza.
Selection: I rate BMG "Above average" here because you can indeed obtain a lot of hit music through them. They are also working constantly to increase the breadth of their offerings. Again, though, if you are into independent labels then BMG will disappoint. I try to think of BMG more as an add-on resource for my music purchases rather than a primary one. I always check them first, then turn elsewhere if they don't have what I want.
Customer Service: I rate BMG's customer service as "Good". They have always been responsive about resolving the few orders that have been messed up or lost. They get points off for not having a toll-free number and for making it very hard to discover the customer service phone number in general. Which is why I'll give it here again: (317) 692-9200.
Sometimes their service reps will make odd decisions, like not asking you to mail back a CD you got by mistake instead of the actual one you ordered. In such cases it is simply relative costs bearing out -- they probably often lose money where returns are involved, so if you're a member in good standing then they might waive the necessity that you mail something back. (Abuse the privilege, though, and things may change for you.)
On-time Delivery: I feel BMG's delivery is "Right on-time" because they have never tried to hide the fact that they use Media Mail when sending packages. They also allow you to opt for a faster shipping method, albeit for an extra cost. It seems unfair to take points off just because you either didn't read the fine print or want to get something for nothing.
If you love music as much as I do, and are careful and patient, then membership with BMG can benefit you in many ways. It's not for everyone, since if you don't use them carefully then you might end up paying more than retail. My own experience with BMG has been terrific and I think yours can be too.
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