The final, ignominious demise of Tower Records, auctioned off in bankruptcy to a liquidator for about $146 million, couldn’t have come quickly enough. For years this dinosaur has acted as a break on the necessary restructuring of the retail sector, the musical equivalent of an acute intestinal blockage. The end was predictable, indeed expected for a decade or more, and the only thing keeping the ship afloat was the support of major labels desperate to justify their expensive and proprietary nationwide distribution networks (for popular music, primarily). No one, not Tower, not the labels, was making money; indeed, between Tower paying its bills in returned product, and labels routinely agreeing to payment terms that amounted basically to a barter or consignment arrangement, the only outfit profiting over the past several years has been UPS and other package delivery services.
Tower’s actual business model, the warehouse store that stocked “everything,” went stale by the late 80s. It was based, first of all, on that “everything” being a catalog of large but manageable size, and second, on relatively stable profit margins based on low annual inventory turnover. The record industry, in typically witless fashion, responded to the growth of large chain stores by flooding the market with so much product that no one building could ever house even a fraction of it, thereby making nonsense out of the Tower’s original premise, while at the same time cutting profit margins and ensuring that only a genius (if that) could possibly stock the shops with the right mix of product so as to ensure the necessary movement of stock. Anyone who has shopped at a Tower will understand the “genius factor” was in rather short supply, particularly at those wages. And the stores themselves proliferated too, carving local markets into ever smaller bits.
So now Tower is gone, and where does this leave us? Over the short term, there will undoubtedly be some pain as the labels most heavily committed to the chain absorb their loses. But the future is far from bleak. As we all know, for the past several years the best source for classical music has been online, through companies such a Amazon.com or, for classical music, Arkivmusic.com (in the USA) and any number of international mail order sources: JPC in Germany, Buywell in Australia, MDT or Crotchet in the U.K. Between them, you can purchase far more then you ever could find in a typical Tower store, and even international shipping now takes only a few days at a generally quite reasonable cost. No one wanting classical music will lack for opportunities to buy it. That’s a certainty.
Aside from online sales and the ever growing market for digital downloads, what does the future hold for the brick and mortar retail sector? Conversations with some of my colleagues at the labels offer a hint, and it may be summarized as “back to the future.” Specifically, we should look forward to a return to the classical “boutique” that characterized the industry before Tower and its ilk (HMV, Virgin) put most of the small, independent shops out of business. In Europe they never vanished completely: France has its Harmonia Mundi chain, carrying both HM product and distributed labels. They are, apparently, doing well. One of the more endearing characteristics of the British market has been the ability of the shops listed above (and others, such as Harold Moores), to survive and adapt to changing times. The “nation of shopkeepers” does classical music proud.
The independent shop dedicated to classical music, if such a thing is to exist here in the U.S.A. once again, will necessarily be different from its predecessor. Weeding through mountains of stock to select a limited but appealing inventory will be more important than ever. A fully professional and efficient online mail order presence will be essential. Smart owners will take advantage of the iPod and mp3 revolution and offer self-service docking stations where shoppers can pay for, select, and download a wide range of new and catalog titles at the touch of a button. Many labels are already well-positioned to offer their product direct to the public: Harmonia Mundi, of course, but most of all Naxos, which has both a huge market presence, a large stable of distributed labels in various territories, and a major commitment to digital technology via its Music Library program.
So the outlook is by no means bleak, and the solutions to the problems facing the industry in the post-Tower world are not difficult to discern. The biggest issue is whether or not anyone at this point has the capital to invest in brick and mortar retail, but I have no doubt that it can be made to work profitably in key regions given patience, prudence, and a little imagination. The reason for such optimism is simple: classical music offers more than just the ephemeral pleasure of being on top of the latest trends, or current with the taste of one’s peer group. As one of the fine arts, it has depth of content, cultural significance, and it allows listeners uniquely to make contact with Western history and the wider musical tradition.
All of this is quite different from mere snob-appeal, which of course classical music also has to greater or lesser degree. The reason this matters is that these other factors argue for the durable value of the CD as a product, one in which music is offered with attractive packaging, intelligent presentation, and which maintains its allure as a thing to be collected, like a fine library of books. No amount of new technology or change in the medium of delivery will alter this basic fact. For years I was an enthusiastic proponent of the “commoditization” of classical music, the idea that it should be treated, marketed, and sold just like any other form of popular entertainment. I still believe in that process–it is what has happened over the past two decades or so. Tower Records and the large chains played a major role, make no mistake.
Indeed, the huge glut of product on the market and the economic consequences of this overabundance have served to conceal what is otherwise an unbelievable success story. There are more labels, more titles, and a wider range of familiar and unfamiliar repertoire available today than ever before. More people have more access to classical music, and are listening to it and buying it, at a lower price than at any time in human history. The performing arts sector, cosseted by subsidies and favorable tax treatment, is booming (though a big “adjustment” is coming there too). So there’s plenty of room for the recording industry to capitalize on its success by learning how to make money from the vast market of potential consumers that it has created for its products.
Now it’s time for the pendulum to swing back a bit, hopefully to a stable center, in which classical music’s inherent qualities of permanence and high quality begin to assert themselves more forcefully than they have been allowed to in the recent past, and once again create a product seen as desirable, and valuable. The audience for this product will be somewhat different than the one that Tower Records served; it will in fact be the one it rather contemptuously chased away–the older listener, the professional person with time to spend getting to know great music, the desire to amass a collection, and the disposable income to lavish on it. There are thousands, perhaps millions of such people out there, waiting to be served, to be treated with respect, courtesy, and consideration, willing to shop in a clean, well organized, comfortable and welcoming environment. I have no doubt whatsoever that if someone builds it properly, they will come.
David Hurwitz
