George Kahn CD Store

Friday, May 4, 2007

Can Jazz Survive Inside the Big Box?

More statistics regarding the music business, courtesy of the Wall Street Journal: Ten years ago, back in the long dark history of 1997, big-box chains (like Target, Best Buy, and Wal-Mart) sold about 20% of all music. Now, these stores account for at least 65% of music sales. This is due to the aggressive pricing and advertising that these type of stores use to lure customers in. These stores will use the newest American Idol release as a loss leader, in the hopes that you will buy a plasma TV on the way out.

Along the way, old fashioned "record stores" (like Tower or Sam Goody) were squeezed out of the market. Tower needed a profit margin of 30% to make it fly, while a place like Target can get by just making 14% on a sale of a CD. They can do this by only stocking the albums that sell: a typical Best Buy store will carry as few as 8,000 different titles, while Tower's average location carried more than 100,000 music CDs.

So where does this leave the Jazz music buyer? Really, how many copies of "Kind Of Blue" does one person need to own? If a jazz fan is looking to explore choices in music, the obvious location now is on the Internet, where the "LONG TAIL" of Jazz music is flourishing.

The "Long Tail" discussion is for another day. Today the question is, can even a Norah Jones or a Diana Krall exist in the Big Boxes? And who's to blame here? Is it that people's taste in music has gone to hell in a hand basket? Is it that the stores aren't stocking music, so people aren't buying? Or is it that the record companies are turning out crap, and so everyone has moved on to DVDs and video poker games?

One convincing argument is that the record companies have priced themselves out of business. Gary Arnold, Senior Vice-President for Entertainment at Best Buy, was quoted in the WSJ Journal article: "Music has become a commoditized product. The CD is perceived by consumers to be a $10 item, and the manufacturers continue to release new titles at ...$18.98." I can't agree more - How can I justify spending $19.99 on the soundtrack for "Dreamgirls" when I can buy the DVD of the movie for $15.99? It just doesn't make sense.

At my gig last night at the Jazz Bakery in LA, I decided that, instead of selling my CDs at the gig for $15 or $20 bucks like more indie artists do, I would price them at $10 bucks each. Unlike other recent gigs where I might sell one or two CDs if I am lucky, this time a full 10% of the people there bought CDs on the break or before they went home. Let's get real - everyone knows that the cost of manufacturing the CD runs at MOST $1.80 a unit, so why get greedy? Let's spread the music, and spread a little love at the same time.

Even in jazz, there are people that are willing to spend the extra money to get the original artwork and packaging of a CD, but how many more people would test out new types of music, including jazz, if they could by a stripped-down, no frills package of music priced cheaply enough to let people test the waters? How about a paperback version of Miles Davis' Greatest Hits? We may need to think outside the "Big Box" to finally get inside the "Big Box".