CMJ Wrap Up

Aside from today's Haystack/ V2/ L-Magazine party I didn't really attend a ton of CMJ events this week. However, I was fortunate enough to moderate a panel called Improving Retail Relations With Labels and Distributors. The main focus of discussion was how indie retailers and record labels can help one another in pursuit of their shared business goals in a changing marketplace.

In addition to yours truly, my fellow panelists were:

• Pat Egan, Director of Retail Sales, Relapse Records
• Audrey Faine, Director of Marketing, Kill Rock Stars/5RC
• Michael Kurtz, President, Music Monitor Network
• Carl Mello, Senior Buyer, Newbury Comics

(Unfortunately, nobody currently who works at a distribution company was on the panel.)

Here are a few of the panel's observations about the current music landscape:

1. Music has been devalued. Music loss leader status at the mass consumer level. Apple uses music to sell iPods, Best Buy to sell refrigerators. But the net effect puts the squeeze on indie retail because it simply cannot compete at that level.
2. Distributors concentrate on big box stores. Another problem is that distribution companies put a tremendous amount of emphasis on chain marketing programs at those large chain retailers. Distros defer to the big box stores who can deliver thousand piece orders in their game of pennies. Distributors then turn to the labels, who are compelled to spend $3 a unit on a "micro-marketing campaign" which in reality translates to a piece on a shelf (IF you can actually get compliance.)
3. Shift in consumer behavior. There's also been a shift in the consumer base. At one point, niche albums for niche crowds were served by specialty retailers and ignored by the chains. In addition, the epicenter of music community has shifted from a geographic location (record stores in major cities) to a virtual one (the web.)
   

So, with all these problems, how will indie stores survive to help indie labels break new bands?

1. Re-establish themselves as the hub of community. The whole panel agreed on this. Carl indicated Newbury is doing this by expanding into suburban malls, and going head to head with "lifestyle" stores such as Hot Topic on their own turf. Other stores are morphing into a music related coffee house and performance spaces, where the small and growing artists can find a voice. Another idea brought forward was also to bring in special screenings of concert films or documentaries to retail (ex. Movies like American Hardcore aren't playing on a national level.)
2. Embrace the internet. Pandora's box isn't closing. Ergo, stores also need to harness the power of the web to reaffirm the discovery and tastemaking ability of knowledgeable record store people. (cough, Haystack, cough.) Instead of just moving coupons or email blasts... stores need to know how to better utilize what's out there in emerging technologies to better serve their local market.
3. Labels need to keep supporting the indies. Special tools such as in-store artist appearances, special releases for indie stores will enable stores to draw traffic.

It would be great to hear from others in the trenches on this. Perhaps we can do a virtual follow up to this panel via Skype and issue it as podcast.