Its funny how no one is looking at the root of this issue. First to explain i worked in Music/Retail for almost 18 years till this past year when my location of Sem Goody closed up here in NYC, so i know the in's and outs of how its all done, from the buying of product to the labels to the way soundscan is determined. I have constantly heard people talk about lower soundscan numbers, and things like that, but no one is realizing that chains/stores are closing in record numbers. Last year Musicland which owned Sam Goody/Suncoast/Media Play, basically was in serious debt to the labels, so it liquidated the entire Media Play chain, over have the Suncoast chain, and most of the Sam goody chain. Once this chain had over 1200 stores it now runs at about 150, the remaining stores were purchased by transworld which owns FYE and some others, well at the moment FYE stores are not in good shape either, closing some stores this year too. Not only that Tower Records is liquidating everything, the entire chain is going out, though not a large chain, Tower was infamous for its deep catalog/imports and its ability to sell indie labels too. It was kind of sad today to see STORE IS CLOSING signs in Tower Records on 4th, a store that i would also go in when i was a kid till this very day, especially for catalog, it brought back memories to closing my store, which if you have never been through the Liquidation process, is the saddest thing ever. Now people can blame stores and companies for poor management but its not a fact, sure some companies are just to big and need to shrink, especially in the Music Business, but people feel to realize the stanglehold labels have on the stores, selling cds to them at a price of 10-12 dollars, of course these stores have to charge 13 and up for them because if they dont make margin, then they close, sure cd prices are high, but its not up to stores like Goody or Tower or Fye, people fail to realize that these stores pay rent too, the location i was at paid 70,000 a month JUST FOR RENT, thats not counting utilities,security,and paying employees, and then of course paying for the product. So dont be surprised if u start to see Virgin and FYE start shrinking too, especially their cd departments.

Now what this means is lower Soundscan Numbers, people fail to release in the last year at least 1500 stores have closed, and now you are losing a whole chain like Tower. SOUNDSCAN though people dont realize this is NOT an account of what people buy at the counter its based on Stores Ordering and then the LABELS report what they sold to stores, and then they get inventories from stores usually once a week. So Soundscan is probably about 60-70% accurate maybe less, depending on the release, the bigger the number the bigger the variance will be. Labels, will cut discounts to stores in order to jack up the soundscan numbers. EXAMPLE, a few years ago when R KELLY came out with that Double CD, Our buyer wanted to purchase 20,000 for the company, the label wanted us to buy 50,000 because then it would push their Shipping number over a million, so they cut the price of the sale for those extra units, needless to say, the record debuted at 1 and most stores were stuck with this product and then had to send most of it back, which also is an expense to the stores.

So when you see numbers shrink just remember there are a much smaller number of stores and the number is growing. I mean 1500 stores is alot, and probably another 300 or so this year maybe more.

Which came first, the chicken or the egg?

i think the bottom line any way you dice it is the consumer. people are sick and tired of spending damn near $20 for a cd only to end up enjoying a couple songs. chains like Tower and the such, were hit big by department stores selling new releases by big names at $8- $9.99. prices, regardless of what record companies, distributors, etc are asking, are just way too much. and having a sale on an $18.99 cd for $16.99 is not a sale. i remember working for one of the stores you've mentioned above, for about 5 years; when we started selling new cds at $18 ea. i knew the company was in jeopardy. it is unfortunate because finding those imports or rarities isn't always easy.

there was an article in Billboard about album sales and industry changes.
basically saying that only a few years ago, top artists were selling in the millions. and that was the norm. now the top albums only sell in the 100's of thousands. i've worked for 4 major record stores and all of them have or are going out of business. sign of the times? definitely. downloading may be the only way to get music in the future and soundscans will be a thing of the past.
a #1 album doesn't seem to mean much anymore. especially to music buyers. they want the music they want period. i think with downloading, it was inevitable but i don't think anyone saw it coming this fast. regardless of who's to blame, i think the music business ( i.e. major labels, retail, execs.) has finally shot itself in the foot.

CHIC0 said:

No its true, But places like Best Buy and Wal Mart that are charging 9.99 for a CD are taking a 2-3 dollar hit for each cd, and the only reason is because they can make it back on their other product, tvs,washingmachines and whatever other crap they sell. I think the main thing is that the day of the RECORD STORE is over and labels caused it, BUT i see everyone just thinking oh i can just go get it at Best Buy, well not if you want catlaog, and also thinking that downloading is the answer, but doesnt anyone realize that once Labels see that downloading is actually done more than people going into stores that they arent going to jack up those prices too? of course they are. A few years back UNIVERSAL put out this Bullshit article about cutting their list prices $2 dollars, they did this to make themselves look like they were catering to the public, BUT what they labels failed to say was they didnt cut the price of what they sold the cd to stores for, that price wasnt cut, just the stores margin was cut. Which in the long run did most of them in. Labels are 100% to blame in this matter, they made this system when they had CDs take over, and now its happening when they let digital take over, and get ready for that price to go up, if anyone thinks they arent going to be paying more for things like iTunes very shortly you are insane

how long before there will be NO STORES for music or movies and we can get everything from the net?

only thing u have to leave the house for is pussy or food--but u can have those delivered too

lastdecember said:

oh. i'm sure they WILL try to charge more for digital downloads. no doubt. but not all downloads will be legal. but if 100 people by a cd and download it to their computer and turn and share it with another 100, and so on and so on, well you get the picture. and when they decide a single song download is going to be $2.99 + things will get worse. especially when cd singles are not even a thought for most people. charging $5-7.99 for each??? lol. i know someone's smoking crack. and a lot of the singles are imports. so now you're at about $10 for 5 versions of the same song. i walked into the Tower near me and their sale was anything but. 15% off a 18.99 cd??? so you save a little under $3?? get the fuck outta here!

i think record stores had more power than they thought. and if for once they worked together... they carry the products and are the initial point of contact with music buyers. they could've turned and said "no". our customers don't want to spend a whole week's paycheque on a single cd. sort of like a consignment with an independent artist. i do understand the profit margins and how much record stores need to break even. however if a department store, which carries only top 40 anyway, is selling the new Prince cd @ $9 and someone like Tower has it on sale for $15.99, the general public who only buy those top 40 albums are more likely to go to the dept. store. and used record shops were profiting by people waiting a few weeks to find new releases used for half the price. and even they, are closing at fast rate. radio stations, eMPTyV, bet, etc.. are to blame as well for only playing 10 selected artists that sound the same as the last.


greed is a monster that eats itself. record labels bit the hand that fed them.

origmnd said:

PANDURITO said:

..or Vanity?

CHIC0 said:

The thing that is worse, was that stores like Tower, Sam Goody and now Fye have all tried to expand their product line branching into Video Games, High end electronics and things like that, But what didnt happen were Sales in these 2 genres, there is no Margin to be made in Video Games at all, for two reasons, Video Game stores have a hold on this, you cannot put Games on Sale, if you notice when a new game comes out its always the same price everywhere, Labels should have done this with CD's and comprimised with stores but it didnt it basically let them charge whatever they wanted just as long as they didnt go over suggested list prices. So when companies like Tower and Sam Goody took these products on it was like taking on more weight and expense, plus people came to these stores for cds not games and not stereo systems. The thing people forget is that Best Buy a few years back bought Sam Goody and basically "raided" the company its programs, warehouse and then cut them loose after 2 years or so, basically what Martha Stewart went to jail for, they did out in the open.

CHIC0 said:

I say GOOD. These execs have been pimping artists for far too long now. It's time to eliminate that pencil pusher who can't sing a note or play an instrument. And give the artist a much larger piece of the pie.

lastdecember said:

ThePunisher said:

prime example:





















[Edited 10/14/06 17:15pm]

What Sam Goody did you work at?

big chains like Wal Mart and Best Buy have put big chains like Sam Goody out of business. oh, boo hoo, i'm crying my eyes out.

Tessa said:

Ok well the point was not putting people out of business, but in the long run, destroying music as a whole. CD's are too expensive, but saying that is a chains fault is just insane. Labels have forced people out of business, not the consumers. The only reason Best Buy and Wal mart function are because they are not MUSIC STORES, cd's arent their core product, they are where you go if you want a TV or stereo, but they figured they are already making tons of that stuff, because they are really overcharging you with that stuff, that they brought in music and figured they cut into there competition by charging 3 dollars less and of course it worked despite them losing money in that department. But in the long run it will hurt the consumer, like i said if u think Digital is not going to go up then you are crazy, and also the fact if a Best buy is all that is left standing, good luck if you are searching for catalog stuff, they are the worst with it. The thing is Labels should have worked with chains and said "look we will get a flat price that everyone has to charge" this is what Video game outlets did with the Video Game Companys, its actually against the law if they are caught offering sales on Video Games.

lastdecember said:

I am LOVING your posts.

lastdecember said:

I'm not surprised that the record companies are basically cannibalizing their own business model. As for the Walmarts, Targets and Best Buys killing off record stores like Tower Records and Sam Goody, they did contribute partly to their demise, but I think that the biggest reason for their demise was the shift into digital music. It's a lot easier for someone to rip tracks off a CD and share it with friends then having to travel to the record store, Walmart or Best Buy to buy a new CD. It's one thing for urban and even some suburban dwellers to run out to the corner store to check out a new CD, but it is a real trip (literally) for someone out in the boonies, since they have to plan to visit Walmart each week and drive 5 to 25 miles just to go to the store.

The other think that's killing the stores is the outrageous greed of the record companies still charging $18.99 for a CD that cost them a total of $2.00 to manufacture and market. I'm curious to find out whether Walmart or Best Buy suddenly tell the record companies to reduce their wholesale price of CDs by half or else they will refuse to stock them in their stores. The record store chains didn't have much of a choice on the wholesale pricing, but since Walmart and best Buy make their money off other products, they could basically bring the record labels to their knees.

CinisterCee said:

"CDs were 10 percent off this week, still not a bargain. At 10 percent off the list price of $18.99, Beyonce's "B'day" was selling for $17.09, compared with $9.99 on Amazon."



But no argument, Tower had an amazing selection. I remember in the mid-80's, there were all kinds of imported vinyl, Japanese magazines, etc. there (West Covina, CA). And all that back catalog, the indie and local band CD's... I suppose the high prices are what finance all those low-volume items.

So will the Sunset Blvd. store will stay open, under the Tower name? That article doesn't say. I also wonder what's going to happen to the overseas stores (like the ones here in Japan)?

CandaceS said:

Im guessing they will all go out. As far as the 10% sale, thats the way the Liquidators do it, they increase the percentage obviously as the weeks go on, but they always Liquidate off the list price not a sale price, because mainly they are just trying to make as much money as possible because they have assumed Towers Debts at this point. It is the worst process if you are an employee in the middle of it. Tower has been operating at a loss for a few years now, they were basically hanging on, but dont think its gonna stop there, Virgin is said to now be the "Deep" catalog seller, but they will soon feel the hit too, as will FYE which has already closed stores.

Here in Portugal the situation is a bit diferent.

The "ma & pa" stores are closing because of large chains like FNAC or even WORTEN. These store sells cds in a lower price, thus making people go there. Little stores can't fight against this.

When they close, the big store push up their prices because they have no direct competition. It's a real shame because thematic "ma & pa" stores are almost non-existant here. Only a few dedicate to metal survive here in Portugal.

A prime example is the FNAC of St. Catarina that monopolizes the entire downtown of Oporto (the city where I "live" my daily life")

Adding to this, cds are expensive compared with Spain, which is a few hours drive from where I live. Taxes are very high towards cds and books (21% to be exact) and record companies charge a base value that is to high
[Edited 10/15/06 10:01am]

lastdecember said:

so, what's the problem? of course digital prices will go up. the prices of bread and milk have gone up in the last 10 years too. if they don't have what you want at Best Buy get it on eBay. Best Buy and Wal Mart are going to continue to become the leading physical stores to buy music, because they have what the public wants at a low cost. There's nothing evil about that. It's just a reality. We don't live in a fantasy world where everyone wins.

MikeMatronik said:

Well it is kind of the same here too. the mom and pop stores here cannot sell "NEW" cds cheap that they get from the label. The only thing they can sell cheaper are used CDS. Here in NYC there are many little stores such as Norms,Music Factory,DiscoRama, RecordRunner (which specializes in imports) and all of them complain about the fact that they are basically handcuffed by the labels, the prices a label charges for a cd make it impossible to compete, I mean its simple business, if someone sells you something for 12 bucks how can u turn around and sell it for 9? Instead of Labels setting a suggested price they should just have a price that it has to be sold at, and it cannot be lower than what the store pays for it, common sense. So either Labels drop their price to stores, or say goodbye to all the "REAL"music stores.

lastdecember said:

It's a real that this happens. This makes the consumer directed towards a very limited range of musical productions. The same store with the same albums/singles, in everysame city and block.

We are basically...under their dictatorship.

MikeMatronik said:

Which is why i will not give in and shop at Best Buy or Wal Mart. I will not pick out Music the same place that i would buy a washing machine or Oven. 99% of the artists i like i will just buy regardless of it being a few dollars more, and also alot of the artists i like release overseas first and so i get imports more, which Best Buy doesnt really carry. Im sure some people may think im sticking up for high prices, trust me im not, i am however sticking up for stores that cant compete, and honestly there shouldnt be a competetion, New Cds should have a set price regardless of the store you go into, AND it shouldnt be less that what the label charges the store for it because that is nonsense. Like i said before, people who just say "oh well i'll go to best buy or walmart and get it cheaper" dont be surpised if availability starts to be an issue in those stores, and yes you will start to see a rise in digital downloads, just like CDs went up, so will that.

It"s hard to believe that Tower is closing. That was the best place for imports and singles but I have to admit I stopped shopping and record stores several years ago for a few reasons:

a) prices are too high
b) stores had very little outside of the top 40
c) stores that had half-way decent prices were often sold out on release day and by the time they got stock in they were no longer on sale

I now get my music from downloads, mom and pop shops, Amazon or used. The interent has helped me to be more selective about what I buy and I now know I'm getting exactly what I want instead of taking a $18.99 chance on a turd that I can't even return or exchange.

lastdecember said:

Thanks 2 the internet, I found some artists I would never find in stores.

The problem is when the digital downloads start to increase their price...

Also the myspace phenomenon is bringin' some really interesting artist to the public

Tessa said:

The point is that little by little music is disappearing, and where to get it is almost gone. I talked a label exec last year and he said the physical CD will be gone by 2010, like the cassette and vinyl and cdsingle disappeared so will the cd. Labels figure that this is an advancement, but its not, everytime you move forward you leave people behind and this move will alienate more people than they can imagine. Trust me i dont really care because i want labels to fall, i want artists to sell their stuff on their own, but thats not where its going to go, labels are still going to exist, because they will never sacrifice themselves, artists and consumers, thats another story.

lastdecember said:

i don't see it as a problem. as long as the artists, labels, and consumers are willing to evolve, nobody gets left behind.