Independent record shops competing in digital age

by Amy Martinez

The Seattle Times (MCT)

16 April 2010

Jason Hughes saw his record store, Sonic Boom, see a new high in sales on Record Store Day. (Dean Rutz/Seattle Times/MCT) 

SEATTLE — When Matt Vaughan heard that a Saturday in April had been set aside two years ago to honor indie-music stores, the owner of Seattle’s Easy Street Records thought it was “a waving of the white flag.” Still, he went along and opened his doors with modest expectations.

“To my surprise, it turned out to be the busiest day of the year,” said Vaughan, who has a store in West Seattle and another in Seattle. “I wasn’t even staffed for it.”

Now in its third year, Record Store Day has become bigger than Christmas for many mom-and-pop music shops, making it an important weapon in their fierce battle against digital downloads and big-box discount chains.

On April 17, die-hard music fans are expected to head to more than 1,400 record stores worldwide. The Rolling Stones, Beastie Boys and Soundgarden all plan to mark the occasion with exclusive releases. Some stores will host musical performances.

At Sonic Boom Records in Seattle, the take from last year’s Record Store Day surpassed owner Jason Hughes’ top daily mark of the holiday-sales season by nearly a fourth.

“I hear people all the time say, ‘God, you’re still around?’” Hughes said. “They’re also the kind of people who say, ‘I can’t believe book stores are still around. I thought everyone had a Kindle.’ It’s like, c’mon, get a life.”

The predicted demise of brick-and-mortar music stores has become a sore spot with Hughes, who remembers being counted out in the late 1990s when Amazon.com began selling CDs.

Now, record stores also face the popularity of digitally downloaded music, intense price pressure from big-box discounters and economic uncertainty.

Apple’s iTunes store sells more music than any other U.S. outlet, followed by Wal-Mart, Best Buy, Amazon and Target, a 2009 ranking by NPD Group shows.

Since 2004, the number of indie-music stores nationwide has declined 40 percent to about 1,930, according to Almighty Music Marketing in Los Angeles.

Eric Levin, who owns Criminal Records in Atlanta, said he helped start Record Store Day to change a seemingly widespread belief “that we were dinosaurs.”

“Sure, we’ve been through some rough times,” Levin said. “But I consider myself successful when my staff has health insurance, and many own their homes. I wanted to shine a light on us because that story wasn’t being told.”

Organizers of the daylong celebration limit participation to brick-and-mortar merchants with at least half of their product lines devoted to music. Also, participating stores’ stock can’t be traded on public stock exchanges, and at least 70 percent of their ownership must be within their home state.

As more people download music to laptops and MP3 players, CD sales are down to their lowest level since the mid-1990s, according to Nielsen SoundScan. It estimates that traditional music stores sold about 40 percent of all albums last year, down from nearly 70 percent in 2001.

Virgin Megastores closed its U.S. locations last year. In 2006, Sam Goody’s bankrupt parent, Musicland, sold the chain to a company that now operates it under the FYE name. Tower Records went under and shut about 90 stores, including Seattle sites in Lower Queen Anne and the University District.

But Hughes isn’t doing so badly. He recently moved to a bigger, more central location, making room for 10 extra racks of vinyl records. Vinyl sales are about 40 percent of his business, up from less than 10 percent three years ago.

Hughes said at first he worried that customers would dismiss Record Store Day as “some weird Hallmark holiday” — or worse, “an act of desperation.” Next Saturday, he’ll host in-store performances by local band Minus the Bear and Texas country rocker Danny Barnes.

Experts say indie-music stores have benefited from a resurgence in vinyl sales and an increased reliance on the more profitable used-records trade. Nielsen SoundScan found that in the first five months of 2009, vinyl-album sales rose 55 percent from a year earlier.

Rock fans are particularly fond of vinyl, buying two-thirds of all albums, according to Nielsen SoundScan.

“People miss the graphics, the physical feel and the warm analog sound of vinyl,” said local expert Charles Cross, who’s written seven books on music, including a 2005 biography of Jimi Hendrix.

“They feel a nostalgia for the time when buying music meant getting a 12-by-12-inch platter, breaking open the cellophane and smelling that smell,” Cross said. “That’s certainly lost with the process of downloading.”

Silver Platters, which sells music at two Seattle locations and another in Bellevue, Wash., now carries more used vinyl records, as well as CDs, owner Mike Batt said. He also emphasizes customer service to distinguish himself from online rivals.

“The biggest thing is you can ask our people what they suggest,” Batt said. “A lot of Web sites have tried to do that, but it’s very mechanical. I’m finding more and more people are wanting that personalized attention.”

Vaughan said he still draws customers to Easy Street with knowledgeable employees and a fun-to-browse environment.

“Come to a place like this, and you’re hearing music, people are talking about music, and it just feels more real,” Vaughan said, sitting down to coffee on a retro-style stool in his West Seattle store. Music posters cover the walls, and a cafe is bustling after 10 on a Tuesday morning.

The cafe, plus more special events, has helped make up for a sharp drop in new CD sales over the past three years, Vaughan said. But the Queen Anne store, which does not have a cafe, is down double-digits, he said, largely blaming Seattle’s loss of the Sonics and less activity at KeyArena.

“I like coming in and seeing the CD cover art and learning about new artists,” said West Seattle resident Jim Rose, who stopped by his neighborhood Easy Street this week to look for a new Madonna release.

Although Rose has an iPod, “if there’s a particular artist I like, I’ll want to own the CD,” he said. “There’s something about picking up an actual CD.”

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