This item continues onward from item:154, where we discuss both national
and local issues related to music retailing.  Mostly we seem to 
collect CD store obituaries...
 

106 responses total.

Another CD shop obituary...  I hopped over to Windsor today and found 
that Dr. Disc will be closing on February 11.   The sign in the window
invited customers to stop in and pay their respects; viewing hours 
end at 6 pm.   My visit was cut drastically short; I had planned 
on the store having its usual late evening hours.

Dr. Disc was part of a southern Ontario chain of indie-oriented stores,
and I didn't ask if the whole chain was going out of business, or 
just the Windsor store.  I'd only been there a few times over the years;
their folk stocks were always disappointing, but they did carry a 
lot of Canadian rock bands which I might have heard on the CBC-FM
late night shows.   Today, the stock has already been well 
picked over -- the store was about half empty -- and the sale discounts
weren't too deep, so I wouldn't recommend a trip there for anything 
except sentimental reasons.

Perhaps the relatively new (?) HMV store in the Devonshire Mall 
pushed Dr. Disc over the edge; the HMV store had a lot of goodies 
in it.     ((preserved from item:154...))

http://www.washingtonpost.com/wp-dyn/articles/A32294-2001Feb20.html
 
The Post has a grim article on the consolidation of music retail power
in the hands of Wal-Mart, KMart and Best Buy, and similar operations.
Or, more specifically, in the hands of the buyers for those stores.
The people who run one such buying service don't actually listen
to the music.  They don't care. 
 
The article says that a typical Wal-Mart carries around 4,000 titles.
A Tower outlet would typically carry 20 times that many, but the 
increased selection is not helping to protect Tower's market share.

  A Tower outlet carries 80,000 different selections?  That's way higher
  than I would have guessed..

Counting all the old price stickers still on the items, yeah, that 
sounds about right ...

It's probably the Internet that's killing off local (recorded) music 
stores. These days I listen to mostly Cajun and Zydeco music, and trying 
to find much of that stuff in local stores is tough (although Borders 
probably had the best selection for the locals). But that's no problem--I 
can just order anything Cajun or Zydeco from Floyd's Records down in 
Ville Platte, Louisiana! I would have liked to support the local stores, 
but I wouldn't waste my money on most modern 'pop' music.

Damn, damn, damn.   I thought I saw this coming when I saw the sales:
electronics 30% off, used CDs 50% off.  No, I wasn't going to be paranoid,
they're just thinning the stock before the students go home.

Wendy/hematite just told me: the East Lansing Tower is closing up shop.
 
I'm not sure what this means; I think this means that CD in-store retailing
is collapsing.  This leaves NO "conventional" CD store in the immediate 
neighborhood of Michigan State, a university with 45,000 students;
just three used CD stores.   

I'm really going to miss having access to a Tower Records.  Even the 
small store in East Lansing had considerable value for me.

The new mega-Barnes & Noble opening November 2001 in East Lansing 
is supposed to have a CD department.

That's totally weird. 

how many stores does that make that have closed in that area now? Don't
worry.. you can just get all of your music from Napster.. <eitysg>

        Betcha someone could have success selling CDs in that area
near MSU if they where only going for 'current music college students
are buying' in much less square footage.
        Tower probably had the stock it thought would satisfy the 
*entire* Lansing area market, as normalized by a large corporate
view.  It, of course takes much more square footage in probably
costly rental district.

Ann Arbor's music retail history doesn't seem to agree with Tim's
theory from #9.  Ann Arbor has seen not only giant mega-stores like
Tower fold, but has also lost nearly every other size and shape of
CD retailer -- mid-sized record stores like Wherehouse, local 
independents like Schoolkids' and SKR, small specialty retailers aiming
at college listeners (I can't even remember the names, but several have
attempted to establish ongoing concerns in Ann Arbor and almost all
have failed -- the only one left at present (that I know of, at least)
is the Grooveyard..)

I can't believe that the only stores that can make money selling
records in a college town are Best Buy and Wal-Mart.  A year ago
everyone was blaming the internet retailers but none of them are doing
particularly well, either.  Where's all the money going?  CD prices are
at a record high and every year sets a new record for the amount of
money Americans are spending on recorded music.  How can that be
possible when the retail outlets are withering up and dying?

(I'd thought that Best Buy [and possibly others] were selling CDs as 
loss-leaders, meaning that they *aren't* making money on music.  that 
might account for why more money is spent on music without profits 
being generated directly by it.)

(also, I imagine the used record stores are doing just fine making 
money in Ann Arbor, and maybe in other college towns, too.)

And I know people who still insist that Napster is not affecting CD 
sales.  CD sales are still going up, they say.  But not in the vicinity 
of colleage campuses, where they've plunged, I observe.  But CD sales 
are still going up, they say.

  re #11:  OK, I've heard that too..  If it's true, then seemingly
  *nobody* (or damn close..) is making money in music retail.  How
  can that possibly be true?  Put a different way, all of that money
  has to be going somewhere.  Conventional wisdom has it that it's
  not going to the artists, record stores are dropping like flies,
  etc..  The traditional bogeyman in this scenario is the big, bad
  record company, but I'm not sure I buy that..  Do they really
  monopolize (or oligopolize, I suppose..) the production, distribution,
  and sale of recorded music to such an extent that they're the only
  ones in the whole chain who are able to make money?  How is this
  supposed to be sustainable in the long term?

  re #12:  Ann Arbor's music retail woes began long before anyone had
  ever heard of Napster, and evidence that this is true elsewhere has
  been widely trumpeted by Napster supporters, if not by the record
  companies.  It's probably fair to assume Napster is a factor of some
  sort in college-area record sales, but it's by no means safe to assume
  that it's as important as you suggest.

To answer Dave in resp:8 :: I count seven big CD stores gone from my usual
circuit, but my circuit is unusual because I am bimunicipal -- my daily life
includes both Ann Arbor and East Lansing.   The casualty list is: 2 Michigan 
Wherehouse Records, 2 Tower Records, and then in Ann Arbor, the original 
Schoolkids, and the spinoff/successor stores SKR Classical and
SKR Rock/Pop/Jazz/Blues.

I started an item on Cafe Utne to ask if this sort of a wipeout was being 
seen anywhere else, and while this is not a scientific survey, so far the 
answer seems to be no, the catastrophic wipeout is a Michigan phenomenon.
(Mike:  what does Seattle's retail scene seem like?   Mickey, how's Austin
doing?)

Austin music stores seem to be thriving. I admit that I'm not frequenting
retail music stores enough to observe any slow downs, but they do seem to be
expanding all the time. I'm not sure if this growth is simply a mirror of the
continued growth in other sectors, or if this has something to do with the
seemingly insatiable appetite for music for which Austinites are known.
Whatever the reason, I am thankful that there are so many options, and I try
to support the local retailers whenever possible.

I tried to list the stores with a sizeable retail music section, and came up
with this:

Waterloo Records (the granddaddy of Austin's independent music stores, still
doing well in their downtown location, despite traffic and construction
snarls)
- Jupiter Records <www.jupiterrecords.com> (recently opened a second store
in So. Austin)
- ABCDs (www.chainstoressuck.com) another wonderful independent, around since
1987. I like this store a bunch, because they have two smaller soundproof
rooms, one for classical and the other for jazz.
- Wherehouse Music (formerly Sound Warehouse, and I'll forever mourn their
passing) ... 3 locations in Austin
- Tower Records - one location, on The Drag right across the street from the
UT campus
-  Barnes & Noble, at least 4 of the newer super stores around the metro
- Borders (!) two Austin locations

There are probably more I'm missing, but there you have it. Music is big
business in Austin. The office of the Governor has even set-up a website
clearinghouse to promote Texas music. 
http://www.governor.state.tx.us/music/

I'm back from making a run at the East Lansing Tower, my first trip 
there since the closing was announced.  The sale is $4 off the normal
prices of most discs.  There is a stark contrast between this Tower
closing and the closings in Ann Arbor -- there is still an awful lot
of merchandise in that store.   Is it possible that even at sale
prices, MSU students are no longer willing to buy CDs?  In last year's
closing of Where House Records in East Lansing, the store was quickly
stripped of the best stuff.  

Classic rock seems particularly well stocked.   
I picked up two Jethro Tull CDs for $9 each, 
and Horslips/LIVE (a 2-cd set) for $18.  There's some personal irony
in the Horslips item; I almost got it back in the 1970s at a long-forgotten
head shop and record store in downtown Lansing, but that store went out
of business before I bought the copy.   I never saw that item again
in the LP era; it's recently out on a band-approved CD from Edsel, after
the band won a court fight against their old label.  But I digress.

I want one of that! (The Horslips.)

I don't think it's a matter of students not buying CD's, it's still 
that they can find what they want cheaper. That's the main reason my 
friends and I never shop at Tower, and are tentative now because with 
the discounts they prices are starting to get back into reasonable 
college student prices. 
And as a Napster user, I *have* bought more CD's since using it. I've 
found a lot of bands that I never would have heard of, and was able to 
decide not to waste my money on CD's I heard were good but when I 
listened to them they sucked. <shrug> 

Here's a discouraging word from musicalamerica.com via Usenet.
Go to www.deja.com and search on "Tower Records" to see the whole thing.
 
The story reports that Tower has stopped buying new releases from three
major independent classical distributors: Allegro, Harmonia Mundi and 
Qualiton.   Tower appears to be in deep financial trouble and it has 
pressured the major labels to give it deep wholesale discounts, and to 
allow it to wait a year to pay for product.  Universal, Sony, BMG and EMI 
have gone along, WEA has balked, and the independents feel they cannot 
afford such generous terms for Tower.
 
Quote:
"All parties quoted for this article insisted on anonymity --
understandable, for, without Tower, selling classical CDs at the retail
level would be well nigh impossible. Tower is just about every classical
distributors largest retail customer."

Bankruptcy is rumored to be a possibility.

It's got to be the fault of those pesky kids, trading symphony 
recordings on Napster..

[Did anyone else watch Futurama this week with its digs at "Nappster"
(aka "KidNappster")?]

Little preachy, I thought.  But still funny... "If you're an investor, just
dump your money into the hole" (points to hole in floor).

resp:20 - funny, Mike, but of course classical isn't where Tower ever 
made its money, and consequently that's not how they're losing it.

Since a vast percentage of my classical purchases are CDs from those 
very distributors from Tower, I'm concerned about alternate sources.  
Searching for classical recordings on Amazon is very difficult, and 
browsing for just about anything on Amazon (a la wandering the aisles 
of a brick&mortar store) is just about impossible.  Any better online 
sources?

Well, that was pretty deafening.

I've made my first visit to Tower since the above news hit.  There are 
two Towers in my area: one has a smaller, but choicer, classical 
selection than the other, and it was the smaller one I visited.  So 
far, at least, it doesn't look much different, and I even found a BIS 
release I'd been meaning to buy.

I forget whether Chandos is one of the labels hit by the distributor 
crunch, but they didn't have a new Chandos release I was looking for.  
OTOH, I'd read about it in the latest issue of BBC Music, and anything 
they mention often takes months to show up.

We discussed the problems of online browsing for classical CDs 
recently,  and in that discussion you (David) had the suggestion of 
browsing a Schwann catalog instead.  I haven't got a better solution.  
CD Connection's search functions may be a tiny bit better than Amazon's.

Other than that, there's Borders, which in Ann Arbor was the weakest 
of the three classical CD shops, but now it's all we have left.
I suspect the model becomes that one will now browse magazines and 
radio shows, rather than actually being able to paw through piles or 
lists of discs. 

A day or two after not finding that new Chandos release I'd been 
wanting at Tower, I found it at Barnes and Noble.  Which has a 
classical CD selection at least as large as the nearest Borders, and is 
one heck of a lot easier to get to.  Pretty small compared to Tower 
even now, though, and lacking all the useful tools - Penguin Guides, 
posted reviews, classical-only listening booths - that make Tower such 
an easy place to shop.  Sigh.

http://www.latimes.com/business/20010623/t000051875.html
 
Excerpts:  
 
"Tower Records... may have to file for bankruptcy protection if it 
cannot restructure weakening finances in the coming months, according
to the nation's top bond rating agency."    ...
 
"The 41-year-old Tower is being squeezed by a decline in album sales and 
a protracted price war with discount houses that is driving down 
profit margins." ...

"Music merchants say sales are down 5% to 10% for the first six 
months of the year, following disappointing showings by releases from
such big-name acts as Ricky Martin, Aerosmith and Depeche Mode....
According to research firm SoundScan... album sales at chain stores are
down about 3.6% from a year ago."
 
"Record chains such as Tower also blame their tepid sales on 
cutthroat competition from discount houses such as Best Buy, which 
purchase CDs from manufacturers for about $10.80 and often sell them
for less than $10 to lure customers in to buy other products such as 
electronic equipment..."

"In a regulatory filing, Tower said it also would close or sell its 
operations in Canada."

  Depeche Mode still sells enough records to be counted as a substantial
  influence over slumping record sales?

  I went out record shopping yesterday with a walletful of cash,
  determined to buy several albums I'd borrowed from the library
  and enjoyed..  I found several of the albums I'd intended to 
  pick up, as well as several other interesting-looking possibilities,
  but I wound up leaving the store empty-handed -- I just couldn't
  bring myself to pay what the store was asking for the CDs.

  The least-expected I'd selected was priced at $16.99, and a couple
  of my selections were $18.99 for a single new CD.  If I'd gone to
  a store like Best Buy instead of the independent record store at
  which I'd been shopping, I probably could have saved a dollar or
  two per disc, but I doubt I could've brought myself to buy most of
  my selections even at a "mere" $15.99 per CD.  The area where I live
  in Washington state has an 8.6% sales tax, so a $17.99 CD costs me
  almost $20.00 total..

  Back when new CDs were routinely priced in the $11.99 - $12.99 range,
  I used to go to the record store and come home with 7 or 8 new purchases
  every couple of weeks.  It wasn't unusual for me to buy 100 to 150 new
  records a year in those days.  Nowadays, though, I can't clearly remember
  the last time I left a record store with more than three full-length
  releases, and I've probably purchased less than 20 new albums so far this
  year.  It's true that my purchases have slowed partly because I've already
  collected a lot of the albums I wanted, but even these days, when I rarely
  try out new artists because I don't want to take a $20 gamble, there's
  still a backlog of music on my "I really ought to buy that.." list.
  At the current rate, however, most of the entries on that list are going
  to remain there indefinitely.  If the RIAA wants to know why record sales
  are dropping, my best guess is that they're pricing most people out of 
  trying new music..

Not directly related, but I did want to mention it:  amazon.com seems to 
have moved to selling most CDs at list price.   They proudly mention
that they are throwing in free shipping on most orders, though.

From the June 15th promotional e-mail from the NorthSide label, which
specializes in issuing Scandinavian folk & folk-related music for the 
North American market: 
 
> At the same time, we're dealing with growing problems
> at U.S. record retail, so unless you're one of the
> lucky few that has a great independent record store
> in your town, be sure to visit our website often
> and take advantage of our secure server to buy direct.

They did not elaborate on what those problems were.

No wonder I stopped buying albums.  I went and bought a few at Best Buy,
becuase they were on sale having just come out (one of them being Exciter by
Depeche mode) and one that managed to be $6.99 (A band called Saliva) and was
thrilled and had to put 2 others back but bought 3.  I was amazed.  A lot of
the releases I want to get, Musicals, old Hair Bands, my eclectic tastes, I
can't.  And some wonder why I used Napster.  Thpppt.  I would buy a LOT more
cd's if they were back around the $10 side rather than the $20 side.  A LOT
more.

The new Afro Celt 3 was on the shelf @ Borders for 18.99 last week, so I
added it to my wish list and left. This week it's on sale for 12.99, so I
got it. Whenever I hear something new, I'll almost always try out Encore
Records to see if someone else paid full price and didn't like it. That's
how I got AfroCelt's 2nd disk for 8.00.

Rotten to the core...  An LA Times story, and a NewMediaMusic story
derived from it, reporting allegations that some major labels are 
rigging the SoundScan charts:
 
http://www.latimes.com/business/la-000057351jul13.story
http://www.newmediamusic.com/articles/NM01070298.html
 
The scam is pretty elementary.  The major label hires an independent
promoter.  The independent promoter gives a bunch of free promo discs
to a CD store which reports to SoundScan and has the CD store employees
scan the free discs multiple times.  The CD store then gets to sell
the free discs at normal price.  Since the discs were not bought at
wholesale, the retail price becomes pure profit to the store.
The artist is screwed because, as free promo discs are involved,
no royalties are paid.
 
Soundscan itself is exasperated.  "'The labels pay us to run a system 
that delivers an accurate sales count,' (soundscan exec) Shalett said.
'What's the point of them paying somebody else to mess 
with it?  It's insane.'"
 
NewMediaMusic suggests that the scam is motivated by internal record
company politics; people who stand to be fired if a release they are 
responsible for performs poorly.

Curiouser and curiouser....

I've given up on thinking that any given development will be the last straw
that will turn people against the music industry: there have been far too many
last straws already, and we're apathetic and cranky, but we still buy from
them.  Still, I'd have fun following this if it became a big scandal; I'm
rooting for it just for that.

Options for obtaining music from somewhere other than "the music 
industry" (a pretty broad term) are currently somewhat limited, and 
require some hefty searching and self-starting.  Sure, folks tried to 
bypass it, but ...

The State Street Harmony House in Ann Arbor seems to have bitten, or to be
in the act of biting, the dust.  They have a 'for rent' sign in their window.

        So State Street is where the Harmoney House was hidding?

Yeah.  I think everyone in the Grex music conference who commented on 
the Harmony House store wondered what the heck they thought they were 
doing, putting a mall-quality CD store, which could compete on neither
price nor selection, in the State & Liberty area.

Yeah. The only time I went to Harmony House to shop was when I was looking
for a "Top 10" soundtrack. I decided after one visit to never shop there
again.

- Backtalk version 1.3.30 - Copyright 1996-2006, Jan Wolter and Steve Weiss