Can Music Survive Inside the Big Box?

_randy_64 writes "In a story that ties in nicely with a recent discussion about the possible reprieve for Net Radio, the Wall Street Journal asks Can Music Survive Inside the Big Box? The article discusses how the 'big box' stores (e.g. Wal-Mart, Best Buy) are cutting back on space and acceptance of music CDs. With 85% of music sales still coming from CDs, maybe this is another thing to push the music industry towards better online sales models? 'Thanks largely to aggressive pricing and advertising, big-box chains are now responsible in the U.S. for at least 65% of music sales (including online and physical recordings), according to estimates by distribution executives, up from 20% a decade ago. Where a store that depends on CDs for the bulk of its sales needs a profit margin of around 30%, big chains get by making just 14% on music, say label executives who handle distribution. One of these executives describes the shift as a tidal wave.'"

In COMPLETELY unrelated news...

...the RIAA has its next round of lawsuits scaled to the amount of shelf space they're given.

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Actually, all the evidence so far has seemed to show that people who are "lifting" all the "tunes" actually BUY more of it than the people who don't. Or maybe they're all just a bunch of whining bitches because they're making more money than they've ever

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The day the music died (simplified, in the spirit of Don McLean) was the day Shawn Fanning released Napster.

The only music which died that day was commercial pop.

Real music was set free the day Justin Frankel and Dmitry Boldyrev ported AMP to Windows a

Music might survive if ...

Big box retailers are interested in volume and marginal pricing. The range of music they pick, the bands that get prominent shelf space and the albums that appear in the advertising will all be driven by the bottom line.

No - if we want diverse musical forms to survive the big box stores, it will be despite them, not because of them.

Small dealers will help - but at best they can only provide small niche markets. Internet sites tied to such retailers may help a lot. For me though, the future of diverse music depends on the internet providing the resources to find out about less known bands and albums [last.fm] and hear stuff I can't hear on the radio [radioparadise.com]. But right now, the Internet Radio station is on the brink of an extinction event. So support Save Net Radio [savenetradio.org] before it really is too late.

Cheers,
Toby Haynes

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Big box retailers are interested in volume and marginal pricing. The range of music they pick, the bands that get prominent shelf space and the albums that appear in the advertising will all be driven by the bottom line.

No - if we want diverse musical forms to survive the big box stores, it will be despite them, not because of them.

Unless the big box retailers set up kiosks or some such system to sell the long tail. They can record a CD on the spot, just as easily as they can make photo CD's.

The trick is finding what you like in the first place. The usual systems are friends, inte

I dont think it really matters

Personally I think part of the problem big box retailers have is that carrying music requires a finger on the pulse of what is relevant. Nowadays, with so many one hit or one album for a week wonders, that isnt possible for most big retailers (that havent seemed to have caught on to the volatility of the music scene). The smaller music only shops have a much better chance here as they can "specialize" in what's relevant instead of what the industry tells them is relevant (that is then stocked in palette-fulls).

So, no I dont think big box retailers will remain relevant in the music selling industry - even if they go online (against competition such as iTunes and numerous others), and no I dont think it matters anyway. It is quite rare I buy any CD from a big box retailer such as the ones listed just due to the lack of relevance of what they usually carry.

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But if big box retailers are selling so much music, surely they can hire some people who are able to keep up with the scene and recommend what's hot and what's not. However, I think there's some other issues with the big box model. Big box stores like to

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Agreed... but large corporations seem very slow to do this, or very unwilling to make the expenditure. It seems to be the one area of retail where big box retailers dont have buyers assigned to monitor such things. And as you said, it needs to be on an are

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But if music stores like HMV, Music World, and Sam the Record Man (Sorry, don't know any US Chains) can manage to sell music and stay relevant across the entire country, why can't big box retailers employ the same methods? I don't think they should let a

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Because thats all they do maybe... one set of buyers, one set of goals, one set of buyers that are specializing in one product and one product only (namely music). Just a guess... I doubt the likes of you or I will know how a corporation so large (as a Wal

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The US chains have had a harder time staying relevant. Didn't you hear that Tower Records went bankrupt? That was one of the biggest.
The only music chain I see advertised much now is FYE.
Or do chain bookstores with music departments count?

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Ummm well that sounds great in theory, but in practice the big box stores employ minimum-wage minimum-IQ staff who really don't want to be there in the first place. When your take-home pay is $200 a week, it's hard to stay up to date on all the latest music purchases.

The checkers and stock boys don't make the purchasing decisions. Even the local store managers have only a certain amount of input. These decisions are made at the corporate level, where there are a lot of bright, and well-compensated, people.

Of cour

Re:I dont think it really matters

Personally I think part of the problem big box retailers have is that carrying music requires a finger on the pulse of what is relevant. Nowadays, with so many one hit or one album for a week wonders, that isnt possible for most big retailers (that havent seemed to have caught on to the volatility of the music scene).

The big box retailers have buyers who do indeed keep up with music, but on a more regional level. They have lots of other problems to overcome, too:

• Lead time: it can take 13 weeks or more for a buying decision to result in new products on the shelves. 13 weeks is the antithesis of volatility, but it's the result of the heavyweight distribution chain process. Once the buying decision is made, the order is placed, the product is manufactured in China, it's put on a boat to L.A., it sits on a dock awaiting customs, it's trucked to a packager and custom packaged (anti-theft labels and/or big plastic don't-steal-me frames), it's trucked to a store's distribution center, it's sorted and put on trucks bound for stores, received in the store and eventually placed on the shelf. If the timing is carelessly handled in those 13 weeks a band can disappear off the radio, leaving you with crappy inventory that you've got to mark down and sell at a loss.
• When you buy for 1000 stores, you have to purchase in large quantities so every store gets stock. Small labels without high production capacity are at a disadvantage. Labels don't pay to keep 100,000 copies of "Childish Intentions" in a warehouse hoping that some big-box store will buy them, they are manufactured only when an order is placed.
• Shelf space is at a premium. Whatever department you purchase for, you are responsible for maintaining the corporate average in sales-per-square-foot. Slip to the bottom of that pile and you're looking for a new job, so taking risks has to be compensated for by having lots of popular artists that are reliable sales. That means lots of music that sounds just like you've already heard before, performed by bands that already sell discs.
• Finding artists that are popular across a wide geographically diverse audience. Big box retailers are divided into regions. As you indicated, with a thousand stores no buyer take the pulse of a thousand individual music scenes, so they aim for the center of their region. Ship lots of country and western to the southeast, maybe more grunge to the northwest, or whatever the sales trends indicate.
• Price pressure (aka the "Walmart Effect") means that no big box is going to pay $11.00 wholesale for a disk to list at $12.00. A small band or label may not be able to manufacture and ship discs for less than $5.00 each, but a big-box may not be willing to pay more than that.

So in a perverse twist of fate, the 13 week lead time of the big box buyers can end up *driving* the Billboard charts. The record labels ship all their new albums out to the big-box buyers. The buyers make their decisions based on what they think will sell, and manufacturing ramps up. Meanwhile, the labels look at the orders for whatever discs they just sold, and plan to ship promo copies to the radio stations to coincide with the arrival of the product on store shelves. 13 weeks after a corporate buyer says "I think this will sell", you hear it on the radio.

I guess the point I'm trying to make is that the buyers at the big-box retailers do indeed care about their music, but they are expected to make profitable choices, and that means they have to limit the amount of "risky" or "experimental" music they offer.

CD pricing

FTA"Music has become a commoditized item," he says. "The CD is perceived by the consumer to be a $10 item, and the manufacturers continue to release new titles at $15 to $18.98." To remedy that situation, he says he has urged labels to move to a "paperback-book model," with no-frills packages priced cheaply for most customers, and more deluxe presentations for die-hard fans."

I think the CD is a $1-3 item, because there are usually only that many songs worth buying. So I buy those 1-3 songs. Music has become commoditized, because there are few "whole works" kind of albums (ie Pink Floyd:The Wall, Holst:The Planets) more just one or two hits and some filler. but we've all said this before.

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I wonder where the concept of album has gone. A lot of albums you see are just a bunch of songs that don't even go that well together, and just seem mashed together. I wish more bands would put out more albums worth listening to as albums, such as The Wa

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"Can anybody name a popular band in the last 5 years that they think they are going to be listening to in 10 years time? what about 50 years?"

A Silver Mount Zion, but in 50 yrs i will most probably be dead. ( and they are not really 'popular' )

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Exactly. I listen to some bands that I think I will still be listening to in 50 years (and I plan to still be alive then). But they aren't what I'd call popular bands. I can't think of any popular bands that People listen to for more than 1 year after

Stuck in the groove

All the radio stations in Canada are playing mostly 30 to 40 year old stuff and the only bands that are popular are bands that make new music that sounds exactly like the old stuff. Most of the new music is unpalatable crap that no-one wants to listen to.

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Some American stations play mostly songs from the 1960s and 1970s. Or else 1970s and 1980s.
When one company owns half the radio stations in the city, which happens a lot in America, it makes sense that not all those stations have the same format. So, yo

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I can guarantee that I'll still be listening to Spock's Beard and The Flower Kings, to name two, as long as I'm listening to music. There is a tremendous amount of real music, made by real musicians, for for people who appreciate music, but you won't find

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"Can anybody name a popular band in the last 5 years that they think they are going to be listening to in 10 years time? what about 50 years?"

Well of course. I'd say Wilco, The Flaming Lips, and Outcast are 3 popular bands that both put out true 'albums'

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If there is only one to three songs worth listening to on the album, there's not really much point in even knowing of the band's existence. Besides, I liked Animals more than The Wall ;)

Record Store Survival

The problem is that big-box retailers are a terribly convenient way to purchase music for most people. If they don't have a lot of emotional investment in what they listen to. I'm not implying that they're shallow, or sheeples. I'm just saying that its just music to them, not a personal affirmation of identity. If they just listen to top-40 hit radio, then any song they're exposed to will certainly be available at the nearest Wal-Mart, Target, or K-Mart. The people who care enough about musical diversity to be angry about this will still seek out new music from record stores, online, friends, etc. TFA seems to claim that big-box retailers will destroy musical diversity. This is giving them far too much credit. As long as there are people who care enough, new indendent music will be created. It may not be what the masses listen to, but this isn't always a bad thing. Top-40 radio has become what it currently is because of how many people listen to it. It is run by large corporations that, because of their size, are inherently conservative. These corporations would prefer to distribute music that won't disturb the status quo. Smaller, independent music isn't restrained by these conditions; however, it would be provided it became popular enough.

Simply put, people who care enough will seek out new music from alternate sources; either to pander to their sense of individuality or through another social/politial motivation. People without this emotional/politial investment will seek out new music from a more convenient source such as big box retailers. This may be through laziness, or due to caring more about other things. In the end, neither side loses much, and capitalism is served.

It all depends on the name on the box.

If the name is Schrödinger, we won't know if music survives until we open the box to find out.

Music in a box

Step 1: Cut a hole in a box
Step 2: Put the music in a box
Step 3: Make her open the box!

Music Kiosks

Why not set up music kiosks where there is a server on the premises that stores music or can retreive music from other databases and then let the customer burn their own cd on the spot.

Or you leave a list of music you want at the store and pick up your

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If you're just going to get a burned CD, why not download the music and burn it yourself? I don't see how having to leave the house to pick up the CD is any more convenient.

Babysitting PCs ?

Yeah because you need to be in the PC while the download happens.

It is absolutely impossible with current technology to start downloading something and go away and do something else. Sure.

Shitty argument.

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Why bother when you can buy it online?

These days, buying bits pressed or burned into a plastic disk is absurd. It's almost as silly as buying water in plastic bottles and shlepping it home from the grocery store when nearly everyone in the industrialized

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CDs are still the only way to legally get most music DRM-free and high quality (at least lossless 16-bit 44.1 kHz audio). Sure, Magnatune exists, and I buy from them, but they're one in a million when it comes to online music stores where you get the choi

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I understand that there are four Starbucks stores that have kiosks.
BTW, is Hear Music an RIAA label, or is it indie?

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How about they just leave a pile of instruments by the front door and you just go and play the stuff yourself for yourself?

If you need to "pick and mix" all of your tracks then, I'm sorry, but you're not listening to good music. Get used to it.

Go resea

Tower Records

If the RIAA and associated record companies had an ounce of brains, they would have lobbied the bankruptcy court to allow the chain to keep a good number of stores open. At least they made an attempt to carry a wide assortment of music, especially before the the video department was taking up half the stores.

The problem with Big Box retailers is that they treat everything as a commodity - and music other than the current "hit" is anything but a commodity - someone looking for Tangerine Dream is not likely to pick up the latest Britney Spears album.

Kinda OT, but one of the most heartening thing that Ganz, the creator of Webkinz, did was to specifically not sell to the likes of Stuff*Mart, Target, etc.

Just how many times can you shoot your own foot?

What many warned about has happened. Music labels sold out to the big retailers, who could sell the CD cheaper then the dedicated music stores. So the dedicated stores lost business, being unable to compete with the big retailers.

Aparently nobody at the m

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We are talking about the music labels here, those are the same guys who think they can make a business model out of suing six year old kids... Is this enough explanation.

with such a low mark-up...

With such a low mark-up, I'm surprised CDs are still as expensive as they are. It indicates there's plenty of room for shaking out more expense and lowering prices further still. If things keep dropping, the recording industry may survive. Hell, if pric

No

I'm confused here. Are there still people who pays for music on physical media? That's so 1990s!

No need to read the article. Like any physical medium that purely exists to give the impression that you are buying it instead of the information stored on it

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Wrong.

From an audiophile point of view, the CD *IS* higher quality than a MP3. Sure, for the average user an MP3 is fine - especially when you are playing it back on PC speakers or a system from a big-box retailer. However, if you have invested in high g

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Wrong.

From an audiophile point of view, the CD *IS* higher quality than a MP3.

Ooh, you are an audiophile with golden ears (or at least think you are, and have spent your money on it), but you are still unable to read. Please tell me exactly where I cl

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Just clarify, iTunes lets you rip music to MP3, AAC, and Apple Lossless. You can currently only download music in protected AAC format. (I think Podcasts may be in mp3 format, though I haven't looked into it.)

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if you have a high grade audio system you *can* hear an audible difference.

That's nice. You're, what, two percent of the market? If that?

In any case, irrelevant. MP3s are enough for the masses, but the only segment not in the path of the digital steamro

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Yes. Believe it or not, I actually like the insert booklets and other such packaging, along with the music that is included on the disc.

Habit. You're conditioned [wvu.edu] to associate the packaging with the enjoyment of owning and being able to listen to a new pi

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Newer generations are being conditioned to be lying, thieving whores,

You are not the first to have said something similar. Here is an earlier one [bartleby.com]

who think they are entitled to a new piece of music just because it's easily available to download.

And w

The problem is overpriced CD's.

I think everybody ignores the biggest issue hurting music CD sales: the ridiculously high price for a new album-length CD regardless of source (record stores, big box retailers and even online stores).

They should price new CD's at a more appropriate US$12

Music Industry needs pricing flexibility

Music Industry needs pricing flexibility. In other words, the business needs to face reality. They are selling every title at exactly the same price. The only time that a CD disk goes to a lower price category is when it doesn't sell for a LONG time and

Re:The day the CD died

I've been hearing a lot of sensationalist stories lately about the death of music. Mostly because CD sales are falling [www.ctv.ca]. Maybe the large production companies will go away, but people have been making music long before the music producers, and they will be making music long after they are gone. Music isn't going anywhere. I've started listening to a lot of independant music lately, and it's a lot better than most of the mass produced big label bands. Granted I still like many big label bands, but I don't think I'd be starved for quality music if there was no big labels.

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You know something, I completely agree with you. I think that myspace, as it was initially used, has helped music adopt to the technological change of distribution and much of what I listen to now is from semi-successful bands that will probably never sel

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They're not obsessed with the music. They're obsessed with the music industry. There is some irrational fear that there will be no music without an industry. I find the whole thing very bizarre. But, that's show business.

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The DRM in iTunes is barely "honor system" quality, everyone knows that, Apple even tells you explicitly how to get rid of it.

Any DRM is bad DRM - so please stop trying to intelligently justify what is blatant Apple fanboi-ism.

And if you're worried abo

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Any DRM is bad DRM

Why, friend, I do not disagree with you, and neither as it happens does Steve Jobs. The DRM in the iTunes store is neither at the instigation of Apple, nor is it a permanent part of the product. Now that the ice has been broken with the E