August 3, 2006
Nervous music retailers face hazy digital future
by Chris Morris
As Margo Channing said in "All About Eve," fasten your seat belts.
The National Association of Recording Merchandisers convention begins in earnest today at the Gaylord Palms Resort in Kissimmee, Fla., with a morning opening address by NARM president Jim Donio and a keynote speech by Chris Sacca, head of business development at Google.
Many attendees at the 48th annual confab for music retailers likely will be wondering if they are staring into the abyss.
The record business has weathered crises in the past: The '90s saw massive consolidation at labels and music chains alike, and distributors and retailers were rocked -- frequently into bankruptcy -- by the violent contraction of the business. But with the rise of the digital universe, merchants and labels have moved into terra incognita.
Last week's numbers were not pretty. According to Nielsen SoundScan figures, physical album sales were the lowest they've been since January 1994; as of the week ending July 25, CD sales had dropped 7.8% for the year. While the sale of digital albums has grown by almost 123% in 2006, the development of that sector so far is not keeping pace with the decline of physical product; adding in equivalent digital albums, the business overall remains down 0.7% this year.
Oh, brave new world.
Music sellers are experiencing something they never have before. The universe they're accustomed to -- the world of physical product -- is on the wane, even though it still accounts for 90% of all music sales. The age of digital sales already has dawned, but things are still hazy on the horizon.
"Some people feel stuck," Donio says. "It's like Dorothy with the Scarecrow in 'The Wizard of Oz.' Which way? You can go this way or you can go this way. Everybody wants to get to Oz. Which is the best way to go? The Scarecrow pointed in both directions. It's tough, and I don't envy the challenges."
He adds, "It's a very odd moment in time. Any business that's going to be successful has got to have parallel paths going on."
To help retailers cope with the explosive changes in the marketplace, NARM is mounting several panels this year that will attempt to enlighten brick-and-mortar merchants about potential partnerships for the digital age. Following Sacca's keynote, a panel today will feature representatives from digital kiosk firm Mix & Burn, mobile music company Groove Mobile and management/marketing firm World's Fair. On Saturday, TAG Strategic consultant and digital music guru Ted Cohen will moderate a sit-down with such forward-looking operations as XM Satellite Radio, AOL Music, Sprint Nextel, Motorola and the Orchard.
The theme at NARM this year would appear to be the necessity of integrating the future into the music retail store as it exists today. That's a sizable universe: According to the Almighty Institute of Music Retail, a Studio City-based store tracker, there are still 2,600 chain stores and 2,900 independent storefronts in the U.S.
Despite all the current hand-wringing, Donio doesn't see music retailing disappearing anytime soon. He notes that five years ago, analysts predicted the imminent demise of brick-and-mortar operators. "There are fewer stores, that's true," he says, "but people still like to shop in stores.
"There will always be a position, a role, from a retailer's perspective," Donio concludes. "What that looks like -- I don't know that anybody could draw that picture."
Article List
• August 13, 2010 - The Tennesean - Anita Wadhwani: Nashville indie record stores' sales spin in right direction• January 3, 2010 - Delaware News Journal - Delaware music shops get creative to compete with downloads, chain music stores
• September 24, 2009 - Los Angeles Times - L.A. independent record shop is still in a groove
• August 20, 2009 - CNN Money - You can make money off online music
• June 14, 2009 - New York Times - Retailing Era Closes With Music Megastore
• May 13, 2009 - Medill Reports - Resurgence in vinyl helps record store in recession
• April 26, 2009 - Los Angeles Times - In a digital age, vinyl albums are making a comeback
• April 18, 2009 - Charlotte Observer - Record stores band together
• April 17, 2009 - Detroit News - Record Store Day spins profits and good beats at Metro Detroit shops
• April 17, 2009 - Associated Press - Record Store Day celebrates indie retailers
• April 10, 2009 - Detroit News - Street Corner Music moving to Oak Park plaza
• April 10, 2009 - Toledo Free Press - New record store shakes up Adams Street
• January 8, 2009 - OC Register - Closing date for Virgin Megastore at The Block
• October 28, 2008 - Reuters - AC/DC back in "Black" with global smash
• September 23, 2008 - Chicago Daily Herald - Independent music stores haven't yet disappeared from suburbia
• June 23, 2008 - New York Times - For Tom Petty Fans, the True Sound of Vinyl, Also Captured on a CD
• April 19, 2008 - Lafayette Journal Courier - For some, record stores live on
• April 19, 2008 - New Jersey Star Ledger - It's Record Store Day. Play it again, Sam!
• April 18, 2008 - New York Times - Record Stores Fight to Be Long-Playing
• April 18, 2008 - Dallas Morning News - Retailers hope Record Store Day turns up volume at mom-and-pop shops
• April 16, 2008 - Timeout New York - Platter Up
• December 27, 2007 - Los Angeles Times - Virgin Megastore to close shop
• December 16, 2007 - New York Times - For a "Dinosaur," an Exuberant Second Life (Looney Tunes Reopens)
• December 3, 2007 - Detroit Free Press - The same old song: Music store closing
• November 7, 2007 - Washington Post - Eagles soar past Britney to top of charts
• November 4, 2007 - The Ledger - Two Young Entrepreneurs Unafraid of Risk of Going on Records
• August 20, 2007 - Billboard - Almighty Taps Hans As VP
• June 29, 2007 - ABC News - Long Live the Record Store
• June 28, 2007 - Orange County Weekly - Locals Only
• June 13, 2007 - Reuters - McCartney's Starbucks album heats up U.S. charts
• June 9, 2007 - Billboard - Commentary: Retail Recovery
• May 9, 2007 - Columbia Free Times - High Fidelity
• March 22, 2007 - NARM Awards - Almighty Retail Named NARM Related Supplier Finalist For Third Consecutive Year
• March 16, 2007 - Chortler - Shout! Factory Has Revamped Its Website
• March 9, 2007 - PhillyBurbs.com - Internet killed the record store?
• March 4, 2007 - Sacramento Bee - New groove for Solomon
• February 28, 2007 - USA Today - Exclusives aim to pull music fans into stores
• February 28, 2007 - New York Newsday - Latin record shops thrive despite changes in music business
• February 23, 2007 - Montpelier Bridge - Buch Spieler Sails On Despite a Music Industry Decline
• November 20, 2006 - Austin 360 - In Austin, Niche Indies Rule
• October 20, 2006 - Sacramento Bee - Tower brand could survive
• October 15, 2006 - Pittsburgh Tribune-Review - Tables have turned on record stores
• October 14, 2006 - Sacramento Bee - Small labels lose valuable ally in Tower
• October 6, 2006 - Desert Sun - Record Alley remodels
• September 27, 2006 - Music & Copyright - Niche Marketing of CD albums continues to rise in the US and Physical Sales overall decline
• September 22, 2006 - CNN.com - Indie stores confront a new era
• September 19, 2006 - New York Newsday - 34 years, and that's not all, folks
• August 18, 2006 - The Roanoke Times - Plan 9 Music puts new spin on 5 Record Exchange stores
• August 3, 2006 - The Hollywood Reporter - Nervous music retailers face hazy digital future
• July 16, 2006 - New York Times - The Graying of the Record Store
• July 13, 2006 - Rolling Stone - The iTunes Holdouts
• July 11, 2006 - Roanoke Times - Record store's "last dance"
• July 5, 2006 - Port Townsend and Jefferson County Leader - Quimper Sound moves, expands to change with times
• June 6, 2006 - Billboard - NARM Nominations Announced
• May 10, 2006 - Detroit MetroTimes - Out of the Groove
• March 18, 2006 - Billboard - Indies in a bind
• January 16, 2006 - Los Angeles Business Journal - Slipped Discs
• January 6, 2006 - Los Angeles Times - Indie record stores doing slow fade out
• December 26, 2005 - Los Angeles Times - The Music Stops for Indie Shop
• December 1, 2005 - Rolling Stone - Fall Sales Dry Up
• October 13, 2005 - Desert Sun - Music snobs rejoice: Independent record stores still thrive in desert
• September 12, 2005 - Salt Lake Tribune - Twilight for Starbound Records
• August 18, 2005 - New York Post - Oldies are now singing a new tune - Music stores go digital
• July 2005 - Rolling Stone - Record Biz Still Sinking
• June 18, 2005 - Billboard - NARM Noms Announced
• March 21, 2005 - CMJ - Hart of the Matter
• February 16, 2005 - MSN - Genius Loves Company
• October 12, 2004 - Rolling Stone - Wal-Mart wants $10 CDs
• July 10, 2004 - Billboard - Almighty Institute To The Rescue
• January 14, 2004 - Creative Loafing Charlotte - Manifest Destiny
• December 29, 2003 - New York Times - on the rise of mass marketers
• November 13, 2003 - Rolling Stone - Best Buy snags rights to band's new DVD
• October 9, 2003 - USA Today - Best Buy wins sales rights to Rolling Stones DVD box set
• October 6, 2003 - Reuters - Stones Paint It Black For Retailers
• May 31, 2003 - Billboard - Retail Track
• May 9, 2003 - Hits - Rerap
