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FROM THIS EPISODE

Changing Lanes in a Static World - Music Retail Tries to Find its Level

This is Celia Hirschman with On the Beat for KCRW.

For the last few decades, the record business has operated through the unspoken system of quid pro quo...in other words, you scratch my back, I'll scratch yours. Business was built on this practice and loyalty in the music industry has always been valued above profits.

That is, up until recently. With success becoming a much higher bar to achieve, the business dollar has had to be stretched. This meant re-evaluating many of the practices that used to be the foundation of the record business.

Last month, Maverick Records earned their namesake. They offered the huge coffee retailer, Starbucks, a six week exclusive on the new acoustic version of Alanis Morissette's classic album, Jagged Little Pill. Instead of distributing the album to the thousands of retailers on an appointed day, as is the norm, Maverick opted instead to give the record this short exclusive window with Starbucks in exchange for marketing in their 4,500 coffee houses.

Imagine, a coffeehouse trumping a record store for the latest in music!

Some music retailers went nuts. Angry letters were sent to Maverick and Alanis CD's were pulled from stores in protest. Retailers were outraged.

I was fascinated by the retail response. I wondered why retailers felt so strongly about the Starbucks-Alanis exclusivity. Starbucks wasn't the only retailer to build exclusivity in their marketing. In fact, Apple's iTunes sold new songs by platinum-selling artists every week exclusively. I needed to know more.

So I began to look up the websites of retailers who were so angry at Maverick and what I discovered was that those retailers didn't actually sell downloads on their site. While they could object to Starbucks exclusively selling CD's, they couldn't object to Itunes exclusively selling digital downloads, because these retailers lacked the technology to do it themselves.

The problems with traditional record retail today will not be solved with an Alanis CD to sell, as the real problem is far more substantial. If record retailers fail to enlarge their world to encompass the latest technologies and innovations that drive the consumer market, they will have no one to blame but themselves when their business fails.

The music business is moving beyond the traditional brick and mortar environment to the online world, and its moving quickly.

Last week, I sat with a 30 something friend in front of her computer. Even though she is not actually in the business, she is able to talk about all the latest bands -- including many not currently found on the radio. How did she keep up? Itunes. My friend scours the website for new music every week and crosschecks other playlists on the site for more discovery. The net result? She buys more music now then ever before, does not waste one gallon of fossil fuel to check stock, and she previews songs in the privacy of her home.

I only hope other music retailers are listening.

This is Celia Hirschman for On the Beat on KCRW.

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