‘The times, they are a changin”

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    Record Town, a small independent record store, sits a couple of doors down from The University Pub.But unlike The Pub, the store isn’t full of TCU students.

    The racks at Record Town will reveal a selection of old blues, R&B and classic rock albums – some are compact discs but many are on vinyl as well.

    When asked about how the current state of the music industry affects his business, Record Town owner Sumter Bruton laughs.

    “This it not the greatest business to make a lot of money in,” Bruton said. “But I’ve been doing it for a long time.”

    A lot has changed since Bruton opened his store 47 years ago.

    “When you wanted to buy a record, you used to go to record stores,” Bruton said. “Now, when you want an album, you go to Wal-Mart.”

    Bruton said most, if not all, other independent record stores have closed in Fort Worth, and those that remain, cater to the niche audience that wants to buy a specific album from someone who knows what he or she is talking about.

    Bruton, a guitarist who has played with numerous acts across many genres, said he has considered another way to specialize at his store.

    “I am thinking about giving guitar lessons,” Bruton said.

    Erv Karwelis, president of Dallas-based music label Idol Records, said the industry as a whole is suffering.

    “There are a lot fewer labels in business today,” Karwelis said.

    “(Idol) has kept prices for albums about the same since the company started 14 years ago. No one is willing to spend more for music, but business has gotten more expensive.”

    The past decade has seen the demise of numerous record labels and the merging of others. New formats for recorded music have developed, and new technologies have damaged the status quo of the music industry.

    Sales of recorded music fell 1.9 percent in the first half of 2005, according to data released Oct. 3 by the International Federation of the Phonographic Industry.

    Shannon Shipp, associate professor and chair of the Department of Marketing in the Neeley School of Business, said the decline in the music industry has been attributed to everything from changing demographics to quality of content, but the myriad of entertainment choices has a direct result.

    “People only have a certain number of hours in the day,” Shipp said. “If they are watching movies, talking on their cell phones or playing video games, they may not be simultaneously capable of listening to music.”

    In recent years, the music industry has fought file-sharing on the Internet, claiming illegal downloads were causing a sharp decline in sale revenue. Following recent court decisions against file-sharing platforms such as Kazaa, the industry has seen an exponential increase in sales for a relatively new format – legal downloads.

    The market for legal music downloads generated $220 million in the first half of 2004 compared to the $790 million generated in 2005. The format amounts to roughly 6 percent of music industry sales. This increase in download sales nearly offset the decline in physical album sales.

    At the center of this business boom is Apple Computer, whose iTunes Music Store controls an estimated 75 percent of the legal download market.

    Legal downloads create many opportunities for labels that weren’t available to them in the past with physical products, Shipp said.

    “If people can purchase just one song, and they don’t have to buy the whole album, they may be more likely to try someone new,” Shipp said.

    Shipp said another added benefit to labels is the ability to cheaply store out-of-print and less popular albums, so they are available to consumers.

    Karwelis said that while it could cost $10,000 to $20,000 just to get a physical album into a store, the only costs for labels to put music online is recording and promotion.

    “Digital download services like iTunes don’t have placement fees like stores, and we don’t incur the manufacturing or shipping costs,” Karwelis said.

    Warner Music Group has unveiled a plan to begin a digital-only label that will distribute music strictly through online services.

    Joan Hiller, a publicist for Seattle-based music label Sub Pop Records, said unlike traditional music stores or major retailers, iTunes uses an editorial system to decide what bands to focus on rather than giving preference based on payment. She said labels must do some “pitching and canoodling” to get into the service’s considerably large spotlight.

    “(This new medium) is always changing,” Hiller said. “It is in its infancy, and the rules haven’t been completely defined yet.”

    In August, major labels Sony BMG Music Entertainment and Warner Music Group urged Apple Chief Executive Steve Jobs to abandon the 99-cent standard charge for downloads in favor of a variable price structure.

    Under a variable price structure, older songs could cost less than 99 cents, while new releases could be as high as $1.49.

    The price squabble has spilled over to Japan – neither Warner nor Sony BMG material was available at the recent launch of iTunes service in the country.

    Hiller, whose employer, Sub Pop, is partially owned by Warner Music Group, said a variable pricing system would raise many more questions and create contractual issues with bands, but a new structure could benefit the market.

    “(Variable pricing) would make it a competitive and diverse market,” Hiller said.

    Shipp said variable pricing could have an impact on sales but primarily with the older, lower-priced songs.

    “If someone really wants a new song by a hot artist, 50 cents is probably not going to be the difference between purchasing and not purchasing,” Shipp said.

    Even with the success of legal downloads and the wins against peer-to-peer file sharing in the courts, Hiller and Karwelis agree file-sharing is still a major concern.

    Across the border in Canada, a recent study said 12 to 24 year olds are responsible for 78 percent of illegal music downloading.

    Here in the United States, Recording Industry Association of America data shows the 15- to 24-year-old demographic purchased only 21 percent of music sold in 2004, down from 32.4 percent in 1995.

    Sophomore e-business major Taylor Enze said he, like many, once downloaded many songs for free from file sharing services.

    “It is so easy to download for free that people just don’t think about it being wrong,” Enze said.

    Enze said he purchases much of the music he listens to now because, as a musician, he would like to think people would want to buy his album. However, he said he still will get some music from friends.

    “If it is a band I enjoy, I will buy their album,” Enze said. “I will buy it if I respect their music. If not, I will get it another way.”

    Junior political science and religion major Mallory Bolduc said she doesn’t buy much music due to a tight college-student budget.

    “College students don’t have much money, so they share their music with friends,” Bolduc said.

    Bolduc said it is not uncommon for one person to get a CD and make copies for his or her friends.

    Both Bolduc and Enze said free gifts such as T-shirts or DVDs that come with the purchase of CDs play a major role in whether they buy some items.

    Hiller said Sub Pop takes a different approach to dealing with consumers that are unsure if they should purchase CDs or pay to download songs.

    “We are one of the first and only independent record labels to actively offer our focus tracks (singles or recommended songs) as free downloads on our site,” Hiller said. “We figure that people interested in the bands we’re working with are going to hunt down the tracks somewhere, and it may as well be from us. The experience has been totally positive.”

    Karwelis said the uncertainty in the music industry now cannot be controlled by the record labels. He said consumers will ultimately decide what will come of new formats and new methods of marketing music.

    Sumter Bruton’s store, with its vinyl LPs juxtaposed with CDs, has weathered a major shift in music medium. The question remains whether his niche audience will see him through the next shift.

    Hiller said new formats will inevitably become the norm because the quality of every media format doesn’t remain in stasis for long. She said she is relatively certain, however, there will always be a place for physical media.

    “There will always be a market for actual physical representations of music,” Hiller said. “At least into the foreseeable future, I think.