Almighty Press

The Roanoke Times

July 11, 2006
Record store's "last dance"

by Duncan Adams

CHARLOTTE, N.C. -- Don Rosenberg sits on a couch at one of his Record Exchange stores as customers browse through used LPs and background music plays at high decibels. At one point, Bob Dylan's foreboding tune, "A Hard Rain's A-Gonna Fall," fills the room.

The 49-year-old Roanoke native is frustrated that the industry of his dreams has come to have no place for him. The once booming chain he founded when fresh out of the University of Virginia in 1979 has been reduced to six stores from a budding empire of 15. Rosenberg announced plans in late June to shutter his remaining outlets sometime this month.

"It's not fun to constantly be scratching to survive and to innovate," he said.

The music careers of many rock stars last longer than Rosenberg's meteoric entrepreneurial run, in which his business has gone from being the toast of an Inc. magazine feature to becoming, well, just toast.

The recording industry has passed by Rosenberg as surely as compact discs have relegated vinyl albums to flea markets and store bins that attract collectors, who are usually as gray as Rosenberg these days. Most teenagers and other young music buffs who don't download their tunes from the Internet -- legally or otherwise -- shop at giant discounters such as Wal-Mart and Best Buy. Those locations, where sales volume allows owners to dictate discounts from suppliers that Rosenberg can only dream about, are driving small specialty dealers out of business.

Jim Donio, president of the National Association of Recording Merchandisers, said the closings are a sad reality.

"There's been a significant number of small retailers that have gone out of business for a variety of reasons over the past five or six years," said Donio.

Craig Rosen is vice president of the California-based Almighty Institute of Music Retail, a marketing company for retailers. Rosen said the institute's database, launched in September 2003, shows that 889 independent record stores and independent record chains have closed since the database began.

Rosenberg has been relegated to counting on the patronage of a relatively small cadre of consumer loyalists. Some are proud eccentrics. Consider Taylor Knox, 19, longtime customer of the Record Exchange, who said he has shopped at the Charlotte store since he was 13 years old. Scrutinizing Rosenberg's inventory of used LPs, Knox said, 'I like vinyl better. I think it sounds a little bit better."

But, while discriminating in his taste after a fashion that Rosenberg loves, Knox represents anything but a sales trend. In fact, Knox acknowledged that friends say he's similar to the eccentric music-snob clerk played by Jack Black in the movie "High Fidelity."

"I don't mind. I could be compared to worse people," he said.

For Rosenberg, the satisfaction of catering to such eccentricity does little to salve the feeling that the very record distributors who were once a source of his success have moved on as surely as most of his young customers, Knox's loyalty notwithstanding.

The realization of all that change and his inability to adapt, despite innovative efforts, is a psychological needle raking across the grooved surface of his life's work.

"Nobody knows he [Rosenberg] exists," said Wayne Rosso, a file-sharing software entrepreneur and frequent critic of the mainstream music industry. "He's the guy in the trenches, trying to push their product from the grass-roots level," added Rosso.

But today the record companies favor the Wal-Mart style of mass retailing, in which new CD releases are treated as loss leaders. Rosenberg said the Record Exchange typically sells new releases for about $2 more than the big-box stores. But Wal-Mart and Best Buy also slash new-release prices further simply to get people in the store. Best Buy is currently offering the new Johnny Cash CD, "American V: A Hundred Highways," for $9.99. The Record Exchange's price for the Cash CD, if the company was still ordering new inventory, would probably be about $15.95.

What's lost for consumers who buy music in the sterility of a discount department retailer, said Rosso, is the intangible benefit of dealing with stores whose sales staffs often have "a deeply personal relationship to music." The small stores typically offer more of an artist's catalog of older releases, he said, and serve as "recommendation engines" to introduce customers to new artists and other music they might like.

When Rosenberg jumped into the music retail business in 1979 he did so more as a businessman than as a music nut. "I really wasn't into music. I was into business. I was in Junior Achievement; I was into computers," he said.

As an interdisciplinary major at the University of Virginia, Rosenberg had taken an inspiring class about entrepreneurship. He was the son of Roanoke businessman Morton Rosenberg, a real estate man who was once an owner of Oak Hall Cap & Gown and once in the paint roller manufacturing business.

"I think he maybe thought I might get in the paint roller business and I made it pretty clear that that wasn't what I wanted to do," said Rosenberg.

As a student in Charlottesville, Rosenberg visited Recycled Records, a store that sold used LPs. The owner bought LPs for a dollar and sold them for two, he said, and did not rate the LPs' quality or condition.

With about $3,000, Rosenberg opened the Record Exchange's first store on May 22, 1979, the day of both his graduation from UVa and his 22nd birthday.

"I went around to flea markets and yard sales at 6 in the morning and I would buy LPs. I did that for a long time."

He checked the LPs for warps, scratches and skips and developed a rating system for each LP's condition and variable pricing. He guaranteed the rating.

He learned about music from customers.

"When I first started out someone would come in and buy an LP and I'd say, 'Well, who is Hot Tuna?' And they would tell me who Hot Tuna was. And I would listen to it the next time I bought a copy and I would pay a little bit more for it and price it a little bit higher."

Over time, the Record Exchange added new LPs to its inventory of used albums. Rosenberg added new stores. In 1984, Inc. magazine named the Record Exchange one of the fastest-growing small, privately held companies in the U.S. At its peak in 1995, the Record Exchange had 15 stores and annual sales of about $10.5 million. Rosenberg envisioned a chain of 50 stores. But then began the slide that affected many small music retailers.

The Record Exchange's addition of new and used CDs, used DVDs and computer games hadn't reversed the trend. In larger cities where the Record Exchange had two stores, Rosenberg consolidated operations into one. He acquired a machine that repairs CDs. He sold new releases as soon as he could -- at one minute after midnight -- to get a jump on the official CD release date. In 1999 he launched a Web site: www. The Web site sells "physical" music products and does not offer downloading.

Rosenberg intends to continue the Web site. But he said he's tired of fighting to save the stores.

Annual sales have slid to less than $3 million.

He said he knew a guy whose business repairing VCRs died after the advent of DVDs. Rosenberg is no stranger to the concept that businesses must change and evolve or disappear.

And the Record Exchange might soon have a new owner, who would buy the company name and inherit the store leases but bring in new inventory. Rosenberg seems confident the deal will be done.

Why would a new owner fare any better in these days of downloading?

"Our business has been suffering and we have been starved for cash. We've had to cut back on our new product," Rosenberg said. "I'm thinking if they come in with a lot of new product and then build up their used inventory, they'll probably have the best of both worlds."

But he reserves such optimism for the next owner of the Record Exchange, if there is one. For Rosenberg, it's the last dance.

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Article List

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March 27, 2013 - Glendale News-Press - It's a matter of record: Burbank's Atomic Records and Backside

December 30, 2012 - Detroit News - As one record shop closes, vinyl music plays on in another

April 20, 2012 - - New vinyl album releases give record stores a kick

November 20, 2011 - - In an iTunes age, do we need the record store?

June 9, 2011 - - Curmudgeon Records closes its doors for good

April 16, 2011 - Wall Street Journal - One-Day Record-Store Revival

February 1, 2011 - Charlottesville News & Arts - Plan 9 Changes Location

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

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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 - - 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

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June 6, 2006 - Billboard - NARM Nominations Announced

May 10, 2006 - Detroit MetroTimes - Out of the Groove

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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