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The Orchard apology letter to artists

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The following is a letter that The Orchard's CEO sent out to most of their artists. Will they go the way of Sponrecords.com?


"In reference to your recent inquiry regarding late payments, a letter from our CEO Richard Gottehrer.


Dear Friends,


I am writing you today not as CEO of The Orchard, but as someone very much like you. At various stages of my long and successful career in the music business, I've been a songwriter, artist, producer and record company owner. The last and hopefully best stage began with the founding of TheOrchard, which opened the gates of major distribution to all independent artists throughout the world. This was and still is not easily done. We have grown rapidly and accomplished many great things in a relatively short period of time, but this growth is not without problems. These problems are merely growing pains and will be corrected, but until then they will appear from time to time.


Our greatest problem is that we are late with payments. For this I apologize and assure you that you'll be paid in full for every record sold. We will meet all our commitments to you as quickly as possible.


By way of explanation, all I can say is that we started The Orchard with the highest goals of providing a new kind of service, in a new way, butafter two and a half years of operation we're beginning to understand why other companies are unwilling to distribute most independent music. Margins are razor thin, setup costs are high and the work involved is enormous. Returns present a huge problem and adversely impact the more than 8,000 releases already in our system.


Over this past year we have begun to show some of the financial strains associated with this. We have opened many new doors but we have also made afew mistakes along the way. During the past two months we have made sizable cuts in our operating budget so that we can return to profitability and continue providing our services. This means that we may have a few more bumpy months ahead as we overcome these financial obstacles. I ask you tobear with us and understand that we are doing something together that hasnever been done before. We are changing the way the music business operates. We are democratizing an industry. Change does not come easy, but we can make it happen together. Please be patient and I guarantee the benefits will far exceed anything you might have expected. We are firmly committed to meeting all of our obligations and continuing to provide great opportunities to the music community. We are very passionate in our belief that all independent music deserves the opportunity to besold side by side with major label releases and we will always offer this service and much more.


Sincerely, Richard Gottehrer, CEO, The Orchard."

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I think they should rethink their approach. MP3.com's "Just in time" cd production architecture allows for zero inventory. Sure they are selling low quality MP3-wav conversions, but the concept is sound.


I'd like the ability to send a high quality cd master to such a company that would

a) archive it (audio/artwork) to Hard Disk

b) setup an ecommerce system that would let me electronically "drop ship it" from a website.


If a particular CD starts really selling well, then that's when inventory management measures could be taken.


I wish DiscMakers would look into something like this.


-david abraham


[This message has been edited by David Abraham Fenton (edited 10-17-2000).]

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i have told them [mp3.com] over and over about selling full resolution cd's but they are just too dumb to realize it. they dont listen to shit and are too busy kissing the majors asses now. they are very close to being kicked off the nasdaq [$3/share now/IPO hit $80], the company from what i hear if it is heavily fined, universal might assume ownership as they dont have the money to pay the fines.


i yanked almost all my stuff off mp3.com.



"if god is truly just, i tremble for the fate of my country" -thomas jefferson

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