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The big boys catch on
This column originally ran in ComputorEdge on October 1, 2004
(Issue 2240, Cyber Socializing)
The advent of the World Wide Web has begun catalyzing some very fundamental changes to the retail sales model. From the success of Amazon.com at selling books (and CDs and games and electronics and ...) to the emergence of sites like cars.com for selling used vehicles, the Web has dramatically lowered the bricks-and-mortar costs of running a business.
Among the businesses hit hardest by the popularity of the Internet has been the music business. Now, let's be fair here – trying to foist garbage like Mariah Carey on us hasn't helped sales, either. And the increasing fragmentation of radio formats means that the young bands today have almost no chance of creating the kind of crossover appeal that let acts like the Eagles, Fleetwood Mac and Michael Jackson sells tens of millions of albums each.
Those days aren't coming back anytime soon, and with the Web, "undiscovered" bands now have the ability to find an audience without going through the middleman of a record label.
What's a big-bucks corporate executive to do in such a radically altered landscape?
Adapt.
A new model
The folks at Rhino Records now have their own small imprint, Rhino Handmade. And while Rhino is now owned by Time-Warner, it's artist roster is still in large part shaped by its early years as an independent label.
If Rhino Records in general is known as the king of the box set retrospective, Rhino Handmade is geared more toward individual albums. San Diego fans may remember the Beat Farmers, the most popular band to ever come out of San Diego. Rhino Handmade is issuing a 5,000-unit run of their debut album, "Tales of the New West," with extra tracks from subsequent albums and demos. Other recent releases from Rhino Handmade include albums by Danny O'Keefe, Dionne Warwick and the soundtrack from the original Broadway run of "Finian's Rainbow."
What's most noteworthy about these releases is that you can only buy them from the Web site; they're not available at any retail outlets.
Of course, you can purchase any of Rhino's thousands of titles from their main Web site at rhino.com. Most of the labels now have a significant Web presence, including secure purchasing. Sony, Warner Bros. and BlueNote are good examples worth checking out.
It was the small, independent labels that paved the way online. Labels that specialize in non-mainstream music were already used to dealing with extensive catalog sales in the pre-Internet days when getting into the retail record chains was incredibly tough for small outfits. The transition from catalog to the Web was logical, and the small labels were already appearing online in the late 1990s.
The co-owner of the blues label Blind Pig recently told me that the label's own online store is now their single largest retail outlet in terms of sales. Alligator Records, Rounder Records and Blind Pig were among the early adopters. Even the most traditionally oriented labels are flocking to the Web – Sugar Hill specializes in bluegrass; Arhoolie in old-timey blues and country; Rooster in country blues. All have secure online ordering centers.
The above are all fairly big players in the traditional music scene, and most of their albums can be found and/or ordered at your local retail store.
Mosaic Records, though, which specializes in reissuing out-of-print albums from jazz's classic age, does not have any retail presence. The only way you can buy Mosaic releases is from their Web site at mosaicrecords.com.
While that may seem an impediment to sales, consider Mosaic's niche: High-end audiophile-quality box set releases. They tend to be pricey, they are always issued in limited runs, and the music on them is licensed from other labels – who undoubtedly wish to avoid competing directly with their own releases in the retail stores.
And consider Mosaic's business model before the Internet came about: You could only order from their catalog, only how would you get a catalog if you hadn't heard of them? Mosaic advertised in many of the popular jazz magazines, with an address you could write to for a free catalog. Having a Web site has to be a whole lot easier, as well as more effective at generating sales.
Still, Mosaic, et al, being online isn't the big surprise. Finding Sony and Warner Bros. online is.