George Kahn CD Store

Thursday, December 20, 2007

How the Grinch Stole the Record Business

As 2008 approaches, I find myself thinking more and more about the fate of the music business, the fate of the physical Compact Disc, and the fate of Jazz as a viable national product.
These observations are personal, and just support and confirm the double-digit losses that record sales are once again showing compared to 2006:
-I went to Harvard Square in November while visiting family back east. Upon asking to see their music department, I was informed that they closed the whole CD and DVD department down 2 years ago - students were no longer buying music and movies. (It is too easy for them to download or "share" the music with their classmates.) In reality there is NO record store in Harvard Square. The only place carrying music is Newbury Comics, and that store has a very small supply.
-If you go into a "big box" store, like Best Buy, Circuit City or Target I think you will notice that the CD department is one of the loneliest places around. No shortage of elbow room
-The top selling albums of the year are... Josh Groban singing Christmas Carols, and "High School Musical". More proof that the music business is giving up on what was once the core demographic (teen - 30 year olds) and focusing on selling product to kids too young to know how to download, or parents too lazy to learn.
-Starbucks bought "Hear Music" a couple of years ago with the idea of integrating a record company that could allow people to burn their own CDs while they sipped lattes. Last week I visited the one free-standing "Hear Music" store in LA, located on the Third Street Promenade in Santa Monica. The front third of the store had been converted into a Starbucks. The back 2/3 was still filled with listening stations and a very eclectic selection of music CDs - and virtually no people.
-In place of record stores in the Malls this year, you find coffee places, booksellers and Nordstrom (to name a few) selling the TOP 10 CDs as impulse buys right next to the cash register. Only big names (Dylan, Springsteen, Alicia Keyes) need apply.

About 5 years ago I predicted the death of record stores as we knew them. Little did I know I would have the timing down so closely.

So where does this leave people like you and me - people who like diversity in music, adventure, experimentation and great music of all kinds? There is always the internet - which can be a very big, lonely place at times.
More shall be revealed - I look forward to your comments


Anonymous said...

I am amazed at what my college-aged son tells me about the rampant availability of "shared files" on his campus. Folks these days don't seem to get that sooner or later, the artist must be paid for the art to survive--even if that means the ridiculously low cut that I've been told artists get from traditional big label CD sales. I actually do more listening via a high-quality computer rig to FLAC files ripped from CD's than CD/SACD, even though I have a great player--the convenience is greater and the sound is as good or better. What I'd like to see is a change in the business in which artists can control the availability of their work and profit directly, cutting out the physical media layer and all the distribution overhead. Seems to me that an artist that can net $7 to $10 for a downloaded album in full resolution FLAC format is way ahead of one who gets less than a buck from a label.

Anonymous said...

Interesting blog. I must say, it's nicer to get $15 directly from the music fan, or most of the iTunes money, than to wait and never receive the pennies from the old record companies.

I also find it nice that anyone in the world can at least FIND me.
David Diggs wrote:
When I had most of my jazz success with Palo Alto Records, I had airplay for days, and sold no records because they just weren't out there. At least that's fixed. I think there's a bit of a silver lining, but the marketing still is required - as you know, since you do a great consistent job at it.

Anyway, we struggle on. Happy Holidays,

GKahn said...

Re: the "rampant sharing" on college campuses - I believe that this is actually someting that the college networks have set up, to stop the students from illegal downloading and clogging up the college servers - instead the students can hook their computers up to the central server, and anyone on the system can access anyone else's music collection to listen, without downloading. But then, who needs to buy anything?

Dr. Move said...

I guess this is somewhat similar to books, and the possibility of copying them, reading them online, or some such thing. I really don't know how you stop this downloading and sharing craze, because it is ethically justified or rationalized by the computer folks. It is just business as usual, or non-business for many. Maybe the record companies will lower their prices, and then some people will pay less rather than go to the trouble of downloading or sharing. I went to buy a Simpsons DVD for my son, but the price was prohibitive, and you can probably see them on reruns or syndication. What to do....

Anonymous said...

Re the "rampant sharing".....I posted the first comment, and no, it does involve downloading. My son attends a Big 10 school, and the network doesn't discriminate as to what can be shared or saved. One guy down the hall from my son apparently has 2 terabytes of mp3's available for "sharing".

My son told me that they were able to download and save several pirated movies, and while the soundtrack was in English, all titles and credits were in Cyrillic. Some of them were still in theaters when they were able to download them.

That tidbit probably gives you some idea of how widely and quickly media files can spread, eh?

Sooner or later, someone will figure out a more workable DRM system that will help ensure that artists are paid for their work.

GKahn said...

yes, my son also, when he was in college, was always downloading brand new movies, computer games, etc. Then one day he downloaded a file that had a virus in it and it trashed his $4000 computer - he became a little more careful after that experience.
Maybe the answer is what RADIOHEAD did - post it "for sale - at your price" on your own website, trust that the people who will pay will pay. Within minutes you can get it for free on the internet anyway, right? This brings up a topic for the next BLOG, stay tuned...