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The Downward Spiral of Music Retailing
chundo writes "Business Week has an article about the financial problems plagueing specialty music retailers. Tower Records, Musicland, and Sam Goody are all "hemorrhaging money", despite efforts to move sales online. Some chains are trying to adapt - Virgin Megastore is testing an in-store service to download songs to portable players, and their Radio Free Virgin unit hopes to break into digital music retailing. Is the failure of conventional music sales reinforcement that the RIAA's business plan just doesn't work, or will it just provide them with more ammunition against the P2P crowd?"
Of COURSE the RIAA will use this as evidence against P2P. Hatch wants to blow up your PC. Perhaps he should think about blowing up the RIAA instead.
The first candidate for House or Senate who proposes rolling back copyrights to 14 years has my vote, regardless of party.
Napster-to-go says "Fill and refill your compatible MP3 player", which is a lie. It's not MP3. It's WMA with DRM.
WRONG!
According to the RIAA and MPAA low sales is because of piracy, therefore we must have more laws and no rights.
Why buy entire CDs when we can pay only for the song we like a from a per song legal music download site? The MPAA claims that movie viewing has gone down, but they fail to take into account that you can see movies as well at home on a home theater system without the $5 popcorn or the chewing gum on the floor.
Fight Spammers!
They just sell the same crap you get at Target. Real specialty music stores are doing quite well, at least from what I know from articles like this. When you sell the same crap as everyone else, the only ways you win are through convenience (e.g., location) or price. When you sell good music - a rarity through the Big 5 - that people want, they'll come back to you both because you offer a unique product and because, at least in some cases, they'll want to hear some of your suggestions. A rapport develops that no crappy chain can emulate or replace.
When Richard Branson started the music retail arm of his empire (of course, back then his empire was only a youth advice center anyway!) he capitalised on a big gap in the market. In the UK at the time (the early 70's), all record stores were really boring places, no music playing, and the people in the store didn't care about music.. it was just another thing they sold, along with pins and ribbons. Richard Branson figured he'd create somewhere where music was playing, where the staff were all hippies who 'digged' music, and where customers could lounge around on beanbags smoking pot and checking out the latest tunes. What's more, he'd sell the records cheaper than anyplace else. His store (in Oxford Street, and on which he actually paid no rent to start with!!) was flooded with customers for quite some time. He noticed after a while, however, that while sales were brisk, a lot of people were just turning up and smoking pot all day without buying anything. He cleared these people out, and made it so that people would still want to come to the store, but not that they could stay there all day. And so was developed the current model of 'specialty record store' retail. This is a model that hasn't changed since the 70's! Virgin Megastores tries new things like having listening booths, and computerised searches of their CD database.. but it's too little too late, in my opinion. The next model of retail kicked off in the late 90's with the discounted 'pile it high, sell it cheap' WAL*Mart model of selling records. The big problem, however, is that this is not much different to how records were sold in the UK in the 60's! The staff at Wal*Mart don't know music, and they could care less about what you're buying So.. it seems we've come FULL CIRCLE. And let's face it, the whole music industry has lost its vibe anyway. I remember back in the 'good old days' that it was fun to go buy records, and it was a real thrill to get them home and put them on. Nowadays? Sure, there are a lot of good gigs going on, but few people exhibit the same excitement over CDs these days, since you probably heard half of the tracks on MTV/the radio already anyway. I think commercially music has lost its way, and while there's still a LOT of great music out there.. music just isn't as fun anymore. These stores are feeling the pinch. Why go and hang out at a record store when it's not fun anymore?
I have no idea how Sam Goody would be hemorrhaging money when they inflate their shipping costs by 875%.
I bought the GBA game Advance Wars from them and paid $14 US for shipping. It took well over a week to arrive, and when it did the postage mark was for $1.60 US.
I let them have it in an email, but they claimed it was all part of the "third party shipping".
Whether it's games or music, if they're going to practice business like that, I hope they fold sooner than later.
This goes for DVDs at the offending retailers as well.
-matt
I agree with you that the RIAA will do all it can as it writhes in its death throes after having missed the bus when the Napster Revolution took place.
It reminds me of what Thomas Jefferson wrote:
To see a world in a grain of sand, and then to step back and see the beach where the sand lies
they have reasonable prices (about $11-$14 new)
they have a good selection (everything but pop and newer country)
they have a knowledgeable staff
quick special ordering
they carry smaller, independant labels you'll never find at *insert huge chain here*
Just an example, the new Radiohead album:
borders: $19.99
independant record store: $12.88
Is the failure of conventional music sales reinforcement that the RIAA's business plan just doesn't work, or will it just provide them with more ammunition against the P2P crowd?"
The RIAA uses P2P as a scapegoat for the failed business models of the labels it represents and their inability (or unwillingness) to adapt their copyright stance in the face of new technology. In fact, the answer to your question is "both" in that as the reports of declining sales come out, the RIAA uses P2P to distract attention from the fact that labels have degenerated into top-heavy marketing machines.
The RIAA is not the record industry. When the RIAA says "we", they mean the big 5 record labels (Universal, Sony, EMI, Warner's, BMG). The RIAA is the recording industry's lobbying arm, charged with keeping the names of the labels out of the headlines as they seethe forward into the breach.
I'm wondering if accused P2P users can adopt a defense that they are non-profit broadcasters who got caught not paying their compulsories.
When I was a kid, we only had one Darth.
There's an answer that could virtually wipe out P2P music swapping, but the record companies are so blinded by greed that they will never see it.
Ever since recorded music first came into existance there is one thing that consumers have wanted and the record companies have steadfastly refused to deliver:
The ability to purchase exactly the songs you want and only the songs you want. At various times you've been able to buy singles in various formats (45 rpm, CD, cassette) but even then, the record companies dictated which songs were available.
The answer is amazingly simple: Put every song in existance on-line in one central location for download at a reasonable price (25 cents per song or less) in standard mp3 format with no DRM crap. This would be enormously successful and would generate huge revenue.
But the record companies will never agree to this and never even allow it to enter their minds. They are still locked into the mindset of "why should we let people buy one song for a quarter when we can force them to buy an entire CD for $18".
- If I want to buy a "top 40" record, I'll pick it up for $12 at Best Buy or Target or something like that the next time I'm in the neighborhood.
- If I want to buy an obscure record by a local or indie artist, I'll visit the local House O' Piercings And Attitude (aka indie record store).
- If I want to buy something that nobody'll have in stock and it'll have to be special-ordered anyway, I'll go to Amazon.
See Sam Goody in there? Neither do I. There's no reason for me to go out of my way to visit a place that charges 50% more than Best Buy for the same mainstream crap. Besides, my days of "gotta have that new record right now" are over. If I am feeling lazy and willing to pay the premium, I'll just buy it from Amazon.Forward, retransmit, or republish anything I say here. Just don't misquote me.
But what are DVD prices? Why does it cost 2x as much to get a DVD over a vhs tape when the DVD costs much less to make. DVDs can be made very quickly, a video tape must spend at least 15 minutes in a very expensive machine.
But 3.8 million DVD players isn't much in the US. At one point a few years ago there were more than 280 million TVs in the US (I know more than one per person) so 3.8+1.9+? is about 2% which is very lame considering a what a DVD player costs. According to wal-marts web site the cheap ones are US$59.6 but the DVDs are 17 to $20.
I think record sales are down beause everyone has the music the like and the new bands all suck. All the CDs I have bought recently are either Indy bands, replaments for dmanaged discs or old bands with new material (and I'm not talking best of).
If the record company wants some of my business, they are going to have to improve the product and keep the price down. I used to have a rule that I never paid more then $10 for a CD and most of my collection is in that price point and my only exceptions were imports and local bands.