Having recently opened an independent record store, I've quickly become acquainted with the challenges that face small stores like mine, and the independent record industry in general. Although I would by no means describe these challenges as insurmountable, I do think they warrant a discussion of the way we do business.
As many of you know, for the last year or so, many independent record labels have been including a code with their vinyl releases that enables the buyer to download the record in mp3 format. Firstly, I think this is a great initiative, and is exactly the kind of creative thinking that indie labels need to be doing in this new environment. It gives many consumers the best of both worlds; an often beautiful (depending on the packaging), physical representation of the music (the record), but also the convenience of having that same music on their iPod/mp3 player. I've seen it go both ways, I have customers who'll only buy vinyl if a code is included, I also have customers without iPods on whom the initiative is lost. For a brief time I was considering buying back mp3 codes from these customers and selling them again; an idea that was quickly abandoned due to obvious ethical problems - not being fair to artists or labels. But the idea got me thinking.
I think there should be serious thought given to the idea of selling mp3 codes in independent record stores. I know the idea might at first seem caught up in the hype of mp3s, but I think there would be a lot of benefits for stores, labels and consumers. Before I get into these benefits, I'll first talk a little about the kind of system I've envisioned. Stores would stock a larger number of codes than they would CDs (they would of course still stock CDs). They would not immediately pay for these codes, however. The lack of immediate cost, and small amount of space that these codes would take would allow small record stores to carry a wider selection of stock and larger numbers of individual titles. The stores would validate the mp3 codes at the point of sale. During the validation process (which would be on a distributor or label website), the store would pay for the product.
For the stores, they could carry a wider selection in a smaller amount of space. Having a larger number of codes for each individual title, they would hopefully avoid running out of 'indie hits' after an especially good Pitchfork review. I think every store in the country experience this with the unexpected success of Vampire Weekend. No store could have predicted the demand for that record, distributors quickly ran out, and it took a couple of weeks to get the record back in. By the time record stores did manage to restock it, many music buyers had already flocked to iTunes or emusic.
For consumers, there are benefits to going to a record store, the first of which is getting away from your computer, getting out of the house, and talking with someone who is knowledgeable and enthusiastic about music. Browsing record/CD covers/artwork can lead you to discover new music. To be honest I haven't downloaded a lot a music, so I don't completely know how it works, but I assume that you're not able to listen to the full record before you buy it. Record stores would have listening copies or opened CDs, so buyers would have a better idea about what they're buying. I had a very honest customer inform me after listening to a CD that he was then going to go home and download it, and I'm sure many more less honest customers have done the same. There are other possible benefits, perhaps labels could print extra copies of the CD booklet that could be included with sale of the code.
I'm not sure how distributors would fit into the whole system. Something would have to be done about the obvious discrepancy with mp3 download sites not having to deal with distributors, and therefore not having to pay a middle man. It's obvious that a lot would have to be worked out, and some questions remain. Is this something that would interest consumers? I'd really like to hear from people on this.
Tuesday, April 8, 2008
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8 comments:
Hey Nathan, Sean pointed me to your post here, and firstly I want to just say thanks for fighting the good fight(!) and for putting so much thought into this kind of stuff. I wish there were more people out there doing it! I think for sure there's to be some kind of better "system" for dealing with downloads & etc., but it seems to me (at least in the near term) that there's a distinct gulf between the physical and the digital, simply by nature of the intangibility of the digital. My gut tells me that there are few, if any, people who would want to go all the way to the shop, put down their money, and walk away with a piece of paper (or a card or whatever) with some code numbers on it. It's just the pure inefficiency of the whole transaction that seems so suspect. It seems like, heck, why not, instead of just giving them some code numbers, why not just sell them a CD-R with the mp3s on it-- a blank CD only costs what- 5 or 10c? This way, the customer doesn't have to go down to the shop, make the purchase, exit and go home, go to the computer, navigate to some website, enter the code, and then download it. If they can walk away with this physical, tactile object, I think customers would be more likely to purchase. But that begs the question: if you're going to be selling them a CD-R anyway, why not just make it a true audio CD instead of MP3s; there's effectively no difference, costwise, between burning an MP3 cd and burning a full audio CD, and then, the customer can listen to it in their CD player, car, etc., as well as ripping it to their digital library. But now, suddenly we've arrived at just selling artless CD copies, which is not good.
I think people come to physical stores because they want physical objects. If they had simply wanted the digital version, they probably wouldn't have bothered walking away from the computer in the first place...
It just all starts to get really weird, thinking about this kind of stuff. What if, for example, instead of just the code, you actually allowed the user to plug in their ipod or laptop and instantly download after the purchase? Then it's at least "instant gratification," in a way. But still, they're probably going to wonder, "why did I have to come down here to the shop to do this?" Or, I dunno, maybe the answer could be to use those USB thumb drives-- those cost less than $1 these days. Those could be loaded up with the mp3 files as needed and then given to the consumer when they purchase. And maybe if they bring back the drive, they get a $1 deposit/refund back. But again, it's like, "why did I have to come down here to the shop to do this?"
I think the vinyl/download coupon works because lots of music fans love vinyl, and love listening to things on vinyl, while at the same time think it's great that they can get a digital copy along with it for free, in case they want to listen to it at work, on the go, what have you. Certainly there's an audience that's not interested in vinyl, or a CD, and only wants digital, but I doubt those people are showing up at the shop. Not with any intention of buying anything, at least.
I mean, I'm sure there's some kind of arrangement that could be found that works, but in the end, you have to answer the question, "why did the customer come down to the shop, when they could have stayed home and downloaded?" I do recognize that in addition to being a retail business, the record shop can be a central meeting place for localized music and culture... like I said before, I just think that for the most part, people go to the physical store because they want to buy something physical.
There are probably lots of ways (many which haven't even been figured out yet) to make the local record more robust in terms of what it can offer a customer (cultural meeting place, show space, etc.), but I don't think digital sales at the shop would make much sense. What a record shop can offer that a digital store cannot is a physical interaction, personal attention, and physical, tactile objects-- this is *why* people come to the shop. Digital is the province of those who likely don't come to the shop at all. I'd say it's best to focus on server the former, and serving them very well, and to not waste energy on trying to attract the latter.
Hey, I think you made a lot of really good points here. And I think you're quite possibly correct in thinking that it just wouldn't fly. I don't know how much of me is totally serious about this, and how much of me just enjoys the 'what if' scenario. I guess I like the idea because it addresses some of the challenges facing independent record stores.
You have to give the consumer a unique reason for getting in his car and coming down to the store to buy something that he can't get more cheaply, more easily or faster from online stores. Selling digital content (as mix&burns or download cards) in stores might be a great way to grab impulse purchases but it's not going to drive foot traffic. We've got our ideas outlined at dsados.com and would be interested in your thoughts.
CDs came about and became popular for the same reasons as internet downloading: convenience (you can skip right to the song!), novelty (you can skip right to the song!), cost, and plain ol' inevitability (waaay easier to stock CDs than records, which I guess falls in the cost category).
Traditionally packaged CDs are fading because they were being bought for the convenience, for those specific tracks you could skip right to and never have to worry about those shit songs in between. But downloading is even more convenient, and I would find it ridiculous to go to a store to purchase downloads. If I'm buying digital then give it to me digitally, dammit. But the vinyl aspect brought up is important because it does represent the facet of the public that wants a physical copy of the music, one that's big they can unfold and hold, and be careful with, and care about. Ween pointed this out, that buying a CD is no fun because it's so small and the artwork so reduced. It doesn't wrinkle or age, it scratches and tears. There's no character to be built, only quality to be lost.
Vinyl gets bought to be listened to and appreciated, and that can still be marketed. And not to attach specific undying meaning to people just buying records, but any vinyl purchase represents a bit of defiance on the part of the consumer at this point, they know what else is out there, but they're buying the vinyl. But you can't buy vinyl all the time because, well, it's just not that convenient.
So DIY record labels are using that same concept and attaching it to CDs. Sure, it's a plastic disc, but we made the case out of fabric from our local Joann's, and my friend drew this. Part of the love is that everything about it is cheap, and anyone could do it, and it adds so much to listening to it and makes you want to meet these people, makes you comfortable about meeting these people. That's the unique reason that is being marketed now, it's why I buy albums from Catbird, I got roped into his marketing, and other people will get sold because it's business. Part of this transition into new music media isn't just about waiting for the new business model to emerge, but for the old notions of business to die off, for new attachments to consumerism to form. I'm not at all worried that free downloads will ever surpass materialism, because I love to own shit that's all mine. I love having, holding, and being careful with albums, and wondering if I could do it myself.
What's the Kafka story I'm thinking of? The needle machine? Execution? Yeah, it's like that.
hey nathan...
this reminded me of another income model that people sometimes use for free software: raising a ransom. the idea is that once potential users have pitched in a certain amount to the developer, they released their product to the public for free download. so the superfans and philanthropists pay up front, and it's free for everyone else. it works really well for smaller projects with eager fans... stuff like wordpress plugins that take under $100 of development time.
anyway. sometimes i wonder vaguely about applying that general concept to indie music. kind of like pre-sales?
again though, it seems like it would make more sense as a website.
did you see kevin kelly's little rant about what to sell when copies are free?
I agree! I want to buy the new merge record because it's merge, and i want to buy it from you, because it's you, but really the last thing i want to buy is a CD. Vinyl, maybe. But I have boxes of stored CDs that I never get to, that my kids scratch. If you sold codes, I would buy it, even though the code off a Matador vinyl album did not work. But I still would! I am going to think about how this could work.
It seems to me that part of what is going here is that Nathan wants to sell something to the customer who came to the store but the physical copy was out. Thumbdrives could be cool if they were "Matador" or "Merge" thumbdrives but, yeah, you don't really get the object which is a big part of the record store experience.
What I do think can be done though is for the indie store to work with smaller labels to provide digital downloads ala iTunes (is there a reason people don't do this? Or do they and I'm out of touch? I see that Matador sells the mp3 album but do indie stores?) on their websites or blogs. Let's face it, we can find just about anything we want to hear online for free. The moral thing to do though is if we "use" what we "stole" then we should go buy it so that the label and artist gets their respective cuts. I try to buy the vinyl in these cases and will purchase the album on iTunes if I can't get vinyl (like Peg says, I could care less about the CD.)
I would definitely buy the digital download from Phonopolis over iTunes if that were an option.
an interesting post, I have toyed with a similar idea and read with interest the arguments for and more importantly against such an concept. I agree a physical location procludes the need to have tanglible assets and being a DJ for over 20 years i rue the slow demise of the small independant record store. What buy online i have found lacks is that 'knowledge gained by interaction', also music which is hard to find or independant joints which doesnt find its way to the IStore/Amazons of this world. The model i was working on catered very much to a niche and very specific demographic, utilising some cutting technology to provide a user experience. I'll be interested to see if this has been taken any further
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