Almighty Press


January 16, 2006 - Los Angeles Business Journal


Slipped Discs

Downloads and chains forcing last of independents to adapt

By RACHEL BROWN

LOS ANGELES BUSINESS JOURNAL STAFF

Independent record stores Rhino Records in Claremont and Rhino Records in Westwood share a past, but not a future.

Pummeled by competition and shifting consumer habits, the Westwood location is closing, its 35 years selling music no match for a tough marketplace diminished by downloads and dominated by chains.

The Claremont Rhino store has survived because it remains insulated from some of the pressures that doomed its Westwood counterpart, and it has slowly adjusted to the reality that music retailing today is a specialty practice.

"The store is still doing good, but over the course of the last 10 years it has morphed," said Dennis Callaci, the Claremont Rhino's general manager. Many of the customers are "music fanatics looking for obscure records."

In the last three years, 156 record stores closed in California, 90 of which were indies, according to Clark Benson, founder of the Almighty Institute of Music Retail, a Studio City market research group which compiles store data. And the bloodshed isn't over. He predicts a year of heavy attrition in 2006.

Comparisons to dinosaurs and typewriters may not be in order; the species is far from extinct. There are still 761 music stores left in the state, 310 of which are independents. Those left after the fallout will be forced to rely on stronger business models, largely depending on a small slice of enthusiasts to keep cash registers humming.

"There is always going to be a need for a well-run independent store that caters to the niches," said Benson. "Five years from now, the typical independent record store will a have a very deep selection that you are just not going to find at the chains."

That's certainly what has happened at the Rhino in Claremont. About five years ago, the store made a decision to slim its selection of popular hit records and increase its volume of hard-to-find items coveted by collectors.

Callaci estimated the store doubled its in-store inventory. At the same time, it stocked its aisles with merchandise that has higher markups, including CDs put out by smaller music labels and used discs, as well as T-shirts and novelty items.

An independent store can buy a new hit CD wholesale at about $11.50, while CDs from smaller labels cost a few dollars less. Typically, used CDs cost between $1 and $5, and stores resell them for nearly double that price.

Currently, Rhino Claremont sells two new CDs for every used CD. Callaci would like to see that ratio more heavily skewed toward used, leaving the big chains to peddle Top 40 merchandise.

Chain gang

The Claremont Rhino faces its share of competition from chains like Best Buy Co. Inc. and Circuit City Stores Inc. The store tried to estimate how many such chain locations were within a nine-mile radius and counted nearly 30, Callaci said.

But Rhino has been helped by some chain closures. After Wherehouse Entertainment Inc. declared bankruptcy in 2003, two Wherehouse stores near the Rhino shut down.

The Claremont store, tucked away in a college town on the outskirts of L.A. County where a Birkenstock store and folk music center dot the tree-lined commercial drag, is a long drive from one of the largest sources of competition in L.A., Amoeba Music Inc. The Berkeley-based independent music store behemoth burst onto the local scene in 2001, drawing music shoppers with its huge supply.

Bob Say, owner of Freakbeat Records in Sherman Oaks, said the demise of local indie stores is too often pinned on Amoeba. "Everybody complains about Amoeba being this 800-pound gorilla, but there is room for others to survive," he said.

Say, who managed the small chain Moby Disc until it sold to Djangos.com Inc. in 2000, said the problem for many indie stores was that they didn't transition properly after the heyday of album sales in the late 1990s. The stores failed to foresee album sales tapering and clung onto a business model that, in the long term, worked only for low-price chains with large sales volumes.

The independent stores that stuck around didn't try to compete with the chains on price or scale, Say noted, but by finding a devoted audience of music fans and catering to them. That way, he said small stores, with pared down overhead, can have a role, even if they don't mint money.

Also making things difficult for indie owners, Benson said, is that they are often music lovers first, not business people, and they aren't adept at judging the business climate. Still, he estimated that by suiting niche tastes, a store like Rhino Claremont could realize $1.5 million to $2.2 million in annual sales.

At Rhino Claremont, although the customer flow is as heavy as ever, the base has changed. Callaci said that fewer college kids come through the doors. Many of them have been wooed by opportunity to hear and download music on the Internet. Benson pointed out that 2003 was an especially brutal year for college stores. Before that, he said, a campus might support three to five record stores, whereas now one to two is the rule.

Today's customers are drawn from a larger geographic region, searching for a deal on a rare music find.

Exposed to a wide variety of genres, current customers are typically knowledgeable and aren't devotees of any one kind of music. Callaci said they ask questions about all styles of music and have collections that incorporate many genres and generations.

"When I started working here, we would have the Goths, the punkers, but now people shop for everything," said Callaci.

Permission granted by copyright holder for this express use only.



Article List

November 21, 2013 - New York Times - Records Are Dying? Not Here

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 - Boston.com - New vinyl album releases give record stores a kick

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

June 9, 2011 - NJ.com - 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

March 9, 2007 - PhillyBurbs.com - Internet killed the record store?

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 - CNN.com - 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

July 11, 2006 - Roanoke Times - Record store's "last dance"

July 5, 2006 - Port Townsend and Jefferson County Leader - Quimper Sound moves, expands to change with times

June 6, 2006 - Billboard - NARM Nominations Announced

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

March 18, 2006 - Billboard - Indies in a bind

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





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