Local music stores struggle to compete in the digital age

Sunday, May 3, 2015

By Tom Ignudo

Special to The Communitarian

Goodies Disc Exchange, located at 2229  MacDade Blvd in Holmes, Pa. offers the latest Taylor Swift albums and Beatles records.

 But since opening in 1992, Goodies has experienced shake-ups in the music industry such as Napster, the rise of iTunes, and the 2008 recession.

Widener graduate Greg Trainer, 38, manager of Goodies, and employee since 2004, said the store had to adapt and make transitions into the digital age of music.

 “For a while our CD sales were slumping a little bit,” Trainer said. “However, our DVD and video game sales have been driving our sales.”

Trainer said Goodies saw a big drop off in sales during the recession in 2008.

 “The economy stunk. People thought we were going into the next depression,” Trainer said. “We weren’t getting the same foot traffic, and our EBay sales became big around that time.”

 Issues within the economy forced Goodies to use eBay to move records, and digital competition became a problem, Trainer explained.

 “We do sell a lot of CDs now because of our low prices,” Trainer said. “My boss has been lowering the prices over the past five to six years in response to various digital music outlets, and music streams.”

 Trainer is one of several industry professionals concerned about the future of digital music outlets and the impact of chain music stores, such as the ones surrounding Goodies on MacDade Boulevard.

 Wal-Mart and Target accounted for 13.5 percent of music sales in 1994, according to the Almighty Institute of Music Retail. Twenty years later those numbers have nearly doubled.

 According to a study by Nielsen, chain music stores made up for 31 percent of music sales in 2014.

 While chain stores accounted for 31 percent of music sales in 2014, independent stores similar to Goodies only made up for 18.2 percent of sales, according to Nielsen.

Ever since debuting iTunes in 2003, Apple has also made a splash in the digital music world.

According to Horace Dediu, an analyst for Asymco, iTunes is responsible for 75 percent of the global digital music market.

The dominance of digital music and iTunes has caused a domino effect making retail stores like Sam Goody vanish.

 Since 2003 more than 900 independent record stores have closed across the United States, according to studies by the Almighty Institute of Music Retail.

 Consequently, independent shops like Goodies have taken significant blows. Fortunately for them, their regular customers are stuck in their old habits, experts say.

 The Recording Industry Association of America reports that in 2008, 33.7 percent of people purchasing music were aged 45 years and older.

 Throughout their tenure, Goodies has depended on this nostalgic crowd, and the recent vinyl demand has created record setting sales throughout the music industry.

 Within the past two years vinyl record sales have grown 51.8 percent. According to a study by Nielsen, 6.1 million vinyl records sold in 2013, and 9.2 million sold in 2014.

 The Recording Industry Association of America reports this marks the first time since 1987 that vinyl LPs achieved a double-digit percentage in the physical market.

 According to the Institute for Policy Innovation, piracy, also known as illegal downloading, has harmed the music industry, retail stores, and U.S. economy. They claim the U.S. economy loses $12.5 billion annually because of piracy. That’s an additional 1.25 billion $10 albums that could be sold in the United States.

 Another study by the Institute for Policy Innovation concludes that U.S. workers in the music industry lose $2.7 billion in earnings annually, and could earn a total of $1.1 billion.

 Lastly, the Institute for Policy Innovation states that the U.S. economy has lost 71,060 jobs in the music industry.

 Although piracy has affected the U.S. economy and music industry jobs, some believe it’s helped their music careers.

 According to Eric S. Bourstin of Princeton University, artists like Janis Ian have gained money through piracy.

 Piracy gives the listener an opportunity to gain access to the album, and if they enjoy it enough they’ll purchase the album.

 Recently, streaming music through outlets, such as Spotify, Slacker, and Beats, have been popular among music listeners. Furthermore, Nielsen reports that music streams have grown 54.5 percent from 2013 to 2014.

 The U.S. paid streaming subscriptions grew from 6.2 million to 7.7 million, a 24 percent increase over the last year, according to the Recording Industry Association of America.

 Today, Spotify has more than 60 million active users, 15 million subscriptions, and is available in 58 markets.

 Although the digital music world is growing, according to Trainer, this previous Christmas was the busiest of his 10-year tenure at Goodies.

 “Our business has been very good and it’s mostly because of the reemergence of vinyl,” Trainer said.

 According to Trainer, the regulars love Goodies for its nostalgic atmosphere, experience, and the opportunity to hang out inside the shop, discussing music and everyday life problems.

 “You have to remember, most of our customers are in there 30s, 40s, 50s, 60s, and even 70s,” Trainer said. “Those guys didn’t grow up in a digital world. It’s nostalgic, the music buying process is special to them, and they reminisce about old times.”

 “I remember coming in here and building strong relationships with people through music,” said a long time Goodies customer who preferred to be known only as Lou. “More than 80 percent of my music collection is from Goodies. The exchange in taste of music, and good people has kept me coming back for over 10 years.”

 Great customer service and knowledgeable employees like Trainer have kept the store thriving for 23 years, customers say.

 “I don’t know what the future holds,” Trainer said. “We’ll probably be here for another 10 to 15 years. I just take it day by day.”

Author:
By Tom Ignudo

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