Trouble in the CD market
Assuming breaking news hasn't changed the layout of Friday's edition, The Sun will carry a story on Friday on based on the fact that the F.Y.E. (For Your Entertainment) store on Orange Street is set to close on Jan. 17.
It's well known that record stores have been falling by the wayside lately, and the trend has been very noticeable in Redlands this year. Besides the coming loss of F.Y.E. (which was once part of the Wherehouse chain), Songsearch, a store that dealt in used CDs on State Street, packed up this year. Another store that went out of business was American Beat Records. The Redlands Daily Facts reported that store, which used to be in the Redlands Mall, closed on Jan. 1 2007.
Redlands isn't alone here. Virgin Megastore's West Hollywood location has shut down (the Ontario store is set to stay in business) and Tower Records stores are a thing of the past. The closures really aren't that surprising. Big stores like Best Buy have long sold CDs at significantly lower prices that music retailers. I remember that when I applied for a part-time job at the Best Buy store in City of Industry several years ago and I attended an informational meeting where someone from store management said the store is willing to eat a loss on CDs to attract customers to the store in hopes that consumers will purchase other goods that Best Buy makes a profit on. Stores that make CDs their bread-and-butter don't have that option.
So things appear to be dismal for the old-fashioned chain record stores. Whether people keep buying CDs at big box stores like Best Buy or Target remains to be seen, but the growing popularity of the MP3 format suggests that CDs, by and large are going the way of the vinyl record, especially since the affluent customers who frequent stores like Best Buy like to be keyed in to the latest technology.
But I'm not certain that all record stores will disappear. I think some of the smaller indie stores might be nimble enough to stay alive, but will probably have to change. Bill Plaster, the owner of Dr. Strange Records in Alta Loma, told me he's trying to stay in business by carrying more goods that can't be downloaded - in his case, punk rock clothing - to keep his brick-and-mortar operation afloat while the CD trade declines.
Punk music brings up an interesting point. Despite the generally anti-capitalist ideas shouted by many punk rock bands, entrepreneurial efforts played a big part in the growth of punk music. Punk bands that couldn't get their records promoted by the big labels often started their own companies. Black Flag had SST Records. Minor Threat put its releases out on Dischord Records. The Dead Kennedys had Alternative Tentacles. Instead of playing by the same rules as the major labels, early punk rockers decided to play a different game.
Something similar could happen to record stores, regardless of which genres of music they sell. If I had to predict the future, I think the future of the music business will be the story of big, Internet based companies that are built to capture the mainstream market while a handful of "High Fidelity"-esque indie stores remain as niche businesses. These stores are likely to wind up carrying several non-music goods, like clothing, memorabilia and the like, and will cater primarily to customers seeking out-of-the-mainstream artists and the experience of shopping in a record store where one can browse the aisles rather than scroll through a list of tunes on a Web site.
Supermarkets seem to be going through a similar evolution. There has been a lot of newspaper ink devoted to the question of whether 20th century chains like Vons and Albertsons can compete in a marketplace where Wal-Mart Supercenters can fight for customers by maintaining lower prices. Not surprisingly, a lot of customers gravitate to lower-priced stores. But at that the same time, there's a subset of grocery shoppers that seeks specialty foods and a more neighborly shopping experience, thus places like Gerrard's Market in Redlands and niche chains like Whole Foods Market stay in business without being able to maintain the same economies of scale as the Wal-Marts and Targets of the world.