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Beyonce Snubs Target, But Target Hates Itself

Stocks in this article: TGTAAPLP

NEW YORK (TheStreet) -- I've tried to make sense of Target's (TGT) decision not to sell Beyonce's surprise iTunes-only release when it comes available as a CD.

And I have come to the conclusion that there's just no making sense of what's nothing but a bonehead move. One that perfectly illustrates the pathetically horrendous state of most brick and mortar retailers.

Via our friends and lovers at Billboard, here's the deal:

Columbia Records released "Beyonce" at 12 a.m. EST on the morning of Friday, Dec. 13, exclusively via iTunes without any pre-release announcement. They are the exclusive seller of the album through at least Dec. 18, when some brick-and-mortar retailers in the U.S. could begin to receive copies of the album.
Most physical retailers will receive it by Friday, Dec. 20. It is understood that the album will not have any additional bonus or exclusive content, for any retailer.

And Target's rationale:

At Target we focus on offering our guests a wide assortment of physical CDs, and when a new album is available digitally before it is available physically, it impacts demand and sales projections.

I was going to wait until Thursday morning to publish this, but I figured I shouldn't sit on it. Because I'm stunned Target hasn't backtracked yet. If the company has a decision maker with a clue not on holiday, they will change course soon. Particularly as holiday shoppers descend on their stores. Holiday shoppers who have heard the buzz over Beyonce. Buzz that might bring them to Target's CD isles. A trajectory that could lead to CD sales, even if not Beyonce CD sales (though I would bet her previous titles might see an uptick this week and beyond). 

Target seems to think Beyonce's decision to go digital-only for a week undermines the notion of the physical CD. That's backwards logic. Target's reactionary decision actually does more damage.

The fact that an artist would go all-digital like this (and see it work better than anyone could have imagined) does pose a problem for physical retailers. No doubt. But Target should treat that as a separate and ongoing issue. The company should not confound the butt-whipping it has received over the last decade with singular events.

Some people like to have the physical hardcopy of a record (often for the cover art) in addition to or instead of the digital version. My daughter, a big One Direction fan, is one of those people. I know quite a few others. And, while I'm not saying these types will save physical music sales from certain death (they won't), some of them will be looking to get the Beyonce CD in the flesh. And they won't be able to get it from Target.

They'll just order it from Amazon.com (AMZN). Or go to Wal-Mart (WMT), who was smart to not only carry the album, but not diss the digital download (also a dying breed).

On the other end of the spectrum, you would never -- ever, ever -- see a streaming service such as Pandora (P) or Spotify refuse to stream the tunes once they become available because Apple (AAPL) has first and, for one week, exclusive access.

That type of thing just isn't in their DNA.

They'll serve their users as best as they can. But, more importantly, they'll look forward, devising creative ways to secure these types of deals, as they have in the past. And that's another funny thing about this -- Target gets all sorts of artist exclusives and special branding opportunities. So why the lame reaction here?

There must be something at play behind the scenes. I can only think Target had a deal in place (or something) and feels betrayed. So it's lashing out, but only hurting itself in the process.

Pardon the speculation, but I'm racking my brain to try to comprehend such an inane move. Sadly, it could just be that physical retail is run by a group of incompetents who are even more incompetent than I thought they were in the first place.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist for TheStreet. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

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