Requiem for Tower Records

[The Newswire]

Many years ago, I lived near a Tower Records with an amazing selection. This was after I stopped getting my music for free from air promotions for being a radio DJ and before I started getting my music for free from publicists for being a journalist. It was also after I was broke and living in a punk rock group house and before I stopped giving a...

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[VoldtaEngler]

ya ill miss tower records... its a shame that another company bought them out and said they would not invest their money into keeping it open..yet they want it to die.
ill miss ya

[Buster Friendly]

If you are over twenty-five and not gainfully employed enough to afford one CD and engage in the self-discipline not to require two when you can only afford one, then also fuck you. Grow up and take some responsibility.--- from the above artilce.

hmmm. i'm not exactly sure what you mean by this amelia.

do you mean to say, this if i work my ass off at a job which under employs me to the point where i can only afford one cd, and exercise some restraint, and only buy one cd, instead of spending money on two cds... then i am some how an irresponsibly selfish non-grown up type person?

is the above statement telling me 'fuck you' because i somehow do not fuffil some sort of consumerist imperitive to buy more than i can afford, or 'fuck you' because i somehow limit my purchasing of items i cannot afford?


i quit buying music long before i could no longer afford to do so.

i don't download it either.

[Amelia G]

If you are over twenty-five and not gainfully employed enough to afford one CD and engage in the self-discipline not to require two when you can only afford one, then also fuck you. Grow up and take some responsibility.--- from the above artilce.

hmmm. i'm not exactly sure what you mean by this amelia.

do you mean to say, this if i work my ass off at a job which under employs me to the point where i can only afford one cd, and exercise some restraint, and only buy one cd, instead of spending money on two cds... then i am some how an irresponsibly selfish non-grown up type person?

is the above statement telling me 'fuck you' because i somehow do not fuffil some sort of consumerist imperitive to buy more than i can afford, or 'fuck you' because i somehow limit my purchasing of items i cannot afford?


i quit buying music long before i could no longer afford to do so.

i don't download it either.

Eep, no! I meant that people should do exactly what you do i.e. I understand that kids will be kids, but, past a certain stage of life, I think someone should be able to afford to get a little bit of luxury and be able to deal with having to do without some luxuries (you know, like that second CD or dental care.)

[Mindgames]

I agree with Amelia's take on the death of TR being the unstoppable sinking of a good boat in a bad ocean, but I don't think it, or places like it, should be saved.

First off, for those of you that don't know me outside BB it'll help to know I don't work for a record label, but I do work in the industry. Best leave it at that, but the point is I've seen selling CDs from both sides and I don't have any corporate agenda on keeping or losing them, but work with the people who do.

Nobody has to tell you guys the Web has been the biggest change in the music industry since Mary Had A Little Lamb came off a wax tube, but to be honest we've screwed up our reaction to it until very recently. For a good century we've relied on the idea a physical recording of music is worth value beyond the intrinsic cost of the plastic as 'the public' needed to buy one to hear the music. The industry has been sailing along pushing vinyl, then polycarbonate, with a guy out front saying "no ice.." Every music video, every print article, every live gig, was to sell product - and let's face it, it worked. Even when home taping came along it still didn't register as an iceberg as you had to buy the blanks. Sure, counterfeiters shifted product but they were easy to catch and at the very most covered 1% of units. It's important for you youngsters to remember that not so long ago the first time you could hear a tune was when you bought the record. Advance radio play was NEVER done. People waited in line like you were shifting the first batch of PS3s.

The Web means music is ephemeral again - making a copy costs nothing and needs no media to be shipped in boxes. For 20 years the industry, even the blue-sky teams, saw that as a pesky but fixable glitch. We've been nasty (the RIAA does in fact have a SWAT team, it's not an urban myth), we've been nice (CD-recognition-driven freebies, golden tickets..) but all the efforts have been in preserving that sacred silver disc. An artist isn't mainstream because they play the Superbowl, appear on Letterman or have posters in 15 million bedrooms, they're mainstream because they shift physical units over 2 million domestic. For the industry to ship CDs we needed places like Tower - at all ends. Majors filled a shelf, indies filled a row, uber-niche Mexican Death Metal filled a space behind Mariachi and in front of Meatloaf. Kids came in, kids bought. Some punks stole, but hell...

I know you (he says generalising) don't like "the industry". Corporate, overpriced, nasty lawyers.. all non-Blue Blood ideals. I can't argue that CDs are overpriced, but that's the point. We gotta make them, ship them, Tower has to pay people to stack shelf, heat and light the store, smile at children.. even on minimum wage that's several bucks per CD that don't go anywhere near 'the record label'.

It's stupid. A CD can sell, and pay PRF, impression costs, overheads and tax for $1 provided you came to the pressing plant yourself and collected it. The 'music' doesn't exist - we're shipping trucks of plastic coasters you're buying because they have a pattern on them. It's like selling inflatable mattresses but blowing them up at the factory.

The web means the industry can finally sell 'the music' without overhead, and as a promotional tool it's millions of times better than a record store. Seriously, in 1995 an RIAA report said that only 10% of visitors to record stores in the US bought anything, and only 1% bought something other than the record they went in for. Posters, background music, window displays do NOTHING unless you know the artist beforehand. Amelia's article is selling Toweresque stores as a secret haven of music you explore and for a very very small minority it was, but for the other 99% you walk in, go to the shelf, find the initial, pick up the box, pay, leave. No point in looking at cover art if you don't know you'll like it. The Web lets the industry at all levels expose people pre-sale to stuff using driven intelligence (we can predict stuff you like even if you aren't aware of it, so you don't have to randomly try). Record stores simply cannot do that and never will.

This summer I was in a meeting where three majors finally agreed on something out loud - the single is dead and the album is dying. Singles are entirely non-commercial these days, they're a marketing tool just like a music video, and to be honest 'we' get pissed at having to sell them. It's just not worth it. Radio airplay, MTV, online sharing all get more album sales conversions than stores stocking the single, EVEN when both are placed on the same shelf. You're starting to see artists releasing online now the charts are including downloads, and by 2008 the idea of a CD single will be strange. Digital radio and TV means you can rip at CD-quality from the first time it's spun, so weeks before Tower stocked it kids were emailing it to each other. I'm fine with that, the guys I work with are fine with that. Seriously, a single is a giveaway. Album sales still matter, but only while the industry cleans up it's act. We're stuck with a system of tracking success based on units, so subbing and airplay still depends on 'chart' position - but I'm seeing that dying too. Why force people to buy 10 tracks when they only like 8? You're going to be seeing a lot more major 'album' releases in 07-08 as collections of single tracks rather than an iTunes bundle, and if track 8 never sells, what the hell.

The industry has to sell music. I'd love it if music was free, but it costs a few thousand dollars a day to rent a studio and producer, and the artists have bills to pay. Even with all the talk of 'merchandise and gig tickets being the new earner', you're kidding if you think a world tour and a truck of hoodies pays the same as 10 million CDs. You expect to pay for a ticket as there's obvious costs to a live gig, but you want the music at cost. 10 cents a track. Well you can have it, and in a few years you will - but not if you're paying for heat, light and someone to smile at children.

I'm sad to see Tower go, but I was sad to see vinyl singles go too. They were good, but the world moves on. Don't let nostalgia become your ball and chain.

mG

[Amelia G]

Hey, I sort of have a soft spot in my heart for corporate, overpriced, nasty lawyers. I'm the daughter of one.

Good post and I'll have more to reply once I've had some sleep. For now, let me just say that I love your M section.

[ForrestBlack]

BlueBlood isn't strictly anti-corporate, and certainly not anti-nasty lawyer. We just don't like liars. It's when corporate entities act indie and lawyers overstep people's actual contractual rights that we tend to take issue. I drink coffee at Starbucks, but if Starbucks opened 10,000 individually named and themed coffee shops and play acted some 'screw the man' we're independent nonsense, we would probably find out about it at some point and not be super into supporting them.

[Mindgames]

Aww come on Forrest - if the record industry wasn't full of overreaching lawyers throwing their weight about and fighting to control the planet, people would start.. well hell they'd start liking it. That can't happen - bitching about the music industry is the only thing that keeps the kids of America from bitching about the Administration!

I like to think of the industry like the hatch in Lost. You push the button. You can't see why, and you can't remember when you started. You know you don't have to anymore, but you kinda feel you should, as deep down you know if it implodes it'll take you with it.

Then you'll wake up naked in the forest with a Scotsman, and baby that's so not worth trying twice.

mG

[Buster Friendly]

well, just to be clear- i actually do not buy music, not because i can't afford to, but because i despise the entire entertainment industry to the point that it borders on jihad.

yeah, the RIAA was a major factor in this (metallica are a bunch of whining ass pussies.) but over the years i came to realize that i just can't stand all of the bland, socialized, weak, boring, and down right insulting pablum that defines our 'culture'.

i fucking refuse to give them a goddamn cent.

...and mG, don't even get me started on the traitorous mongoloids in office, or the retarded world situation.

[Sara X]

i would like to quote

"It was a wonderful notion that there was a party like that somewhere beyond Virginia, where everyone could dress up in wild costumes and be themselves"

and amen.

it's amazing to read something like this because i have never been into a virgin or tower or any of those things except maybe an FYE, this one local store called volume, and a sam goody once or twice. i was pretty much forbidden to have music in my life until my brother introduced me to NIN not so many years ago & i told my mother exactly where she could shove her attempts to control what i put in my brain. i'm young, so even if i have been into music since i was 12 that would only be circa 1999. my brother is ten years older than i am, pretty much has been into music my entire life. it's only because of him that i remember casette tapes, but only as vaguely as i remember finding out that eating crayons makes for colorful vomit. my parents had this behemoth stereo with a turntable on top, 2 tape decks, and a CD player. it was sort of a weird generational thing- my parents had vinyls and tapes, my brother had tapes and CDs.

so after i discovered that 1.) i could tell my parents what i was and was not going to do and 2.) music was fucking AWESOME, i will admit that i resorted to piracy. my brother in fact introduced me to this concept as well. i didn't really think of it as stealing (trying to download music at 2kbps when your mother is screaming at you that she wants to use the phone tends to make you think you've earned something) until the whole napster thing went down. i remember thinking to myself, "WHEW! it's a good thing i really don't like metallica!" but after that i only filched a song here and there. now that i have the means, i don't even buy many CDs. it's not because i don't like the music industry or corporations or lawyers or anything like that...

it's just because it seems like so few people are really making good music anymore.

[Lady Alias]

Well. That was interesting. I have to completely agree with the net revolutionizing sales. But it certainly as of yet nor soon will erase CD sales. There are still people that prefer that jewel case to suppourt an artist.

[Morning Glory]

I think I read about this in the horrid Rolling Stone. The article had an interview with Slash of GNR fame talking about how he got arrested as a kid at a Tower records for stealing an album, and then years later at the height of thier popularity, sitting in the security room at that same Tower Records store watching multitudes of fans line up for their new cd release.

that pretty sums up the music industry in a nutshell.

[Rockwulf]

Tower might still be around if it wasn't for their horrific price gouging.

When the one near me started their "Going out of business. Everything 40% off" sale I went in to see what I could pick up for cheap. Excepth that their original prices were so high that even with the discounts, I'd be better off buying at one of the indie stores in town.

[bohoki]

one more victim of walmart

[Amelia G]

Tower might still be around if it wasn't for their horrific price gouging.

When the one near me started their "Going out of business. Everything 40% off" sale I went in to see what I could pick up for cheap. Excepth that their original prices were so high that even with the discounts, I'd be better off buying at one of the indie stores in town.

"People always say they care about gourmet cheddar, but most will buy Cheez Whiz if it is competitively priced. It was not greed which set Tower prices higher than Wal-Mart’s. It was the simple economics of cost of goods sold and the economies of scale. Eight hundred pound gorillas like Wal-Mart can tell their suppliers what to charge. Additionally, chains like Best Buy or CostCo, which make most of their revenue from the sales of electronics or bulk items, will often sell things like music or books as what is known as loss leaders. A loss leader is an item sold at or below the store’s cost in order to attract customers."

Not being able to compete with loss leaders does not equal price gouging. It may equal no longer having a viable business, but that is not the same as gouging.

[Buster Friendly]

oh, and btw amelia- i didn't think you meant what that quote i cited said, but i wanted to make sure before i totally disagreed with everything in the article.

[Mindgames]

There are still people that prefer that jewel case to suppourt an artist.

If I told you an artist gets a higher percentage of the retail price for selling music online, or selling you a hoodie, would you still want the CD?

CDs are going to be around for a while, simply because of the number of players in circulation that have 'issues' with CDR (cue debate on in-car CD players...) and many countries are playing catch-up on the whole broadband-downloading game - but to be brutal why pay $10 for a CD in a store when you can get it legally from an online retailer for half that, since they have no premises costs? "Record stores" served a purpose when you were buying 12" fragile albums and 'buying online' mean going to the mall after a line of coke. Now you can ship a CD next-day for less than the cost of the bus ride into town, it's one of those products (like software, porn and Indonesian wives) that make a lot more sense without a space in the mall.

mG

[HeadlessBill]

I will have a friend in LA that will be unemployed by the middle of December because of the Tower closings.

BTW, I like the BlueBlood sticker on the post in the last Tower image in the gallery.

[Morning Glory]

this isn't socialism. supply and demand be damned, an $18.00 CD doesn't equal $7.00 an hour (the average wage of an american worker- and that's probably being generous) for a music industry pro, no matter how it get's sliced. consider that Brittany spears, to name one example, would still be a millionaire even if her cd's cost one dollar at retail price- if that's not consumer gouging, I don't know what is.

[Mindgames]

Maybe it'll help to give you all an idea of where the money goes for a CD sold in a record store. Stakes very a lot but for a typical CD album predicted to clear 1 million units domestic, from an artist signed to the label releasing it, you're looking at this:-

Payments taken by the record label
$0.75 : Manufacture per disc (pressing, inlay print, case.. less for a digipak)
$1.00 : Mechanical fees (approx 8% of wholesale)
$4.00 : Label share (profit, overheads and coverage for marketing, etc.)
$1.50 : Artist unit royalty

Payments taken by the distributor
$1.50 per unit for domestic B2B (ish)

The remaining value is taken by the retailer to cover their premises and staffing overheads, sales taxes, credit card fees and so forth.

"Artist royalty" needs some explaining. Every artist negotiates for "points" - a point is a fraction of the wholesale value of the CD, not the retail price. When you're bartering it's all down to past record of sales and predicted unit ships, so indies and newcomers often get between 1 and 5 points. Midrange artists (100,000 to 500,000 unit ships) can expect to see 10 to 15 points, and majors (people you know by their first name) can hold out for anything up to 40, but 25 to 30 is more typical.

A point is worth, looking at some figures from last month, about ten cents. It can be more, but before you work out 'a point' the label and distributor subtract all their fixed conditionals we've talked about above.

So, if you sell 200,000 units (typical for the sort of domestic midrangers Tower was known to stock), you earn $200,000 right? Wrong. The label has lent you money and it gets it back first - something called a 'recoupable'. Say they gave you a $25,000 advance to pay your food bills while you were writing, then the cost of recording the album and paying the producer came to $100,000. Now the band goes on a promo tour, and the label pays $50,000 towards the costs of staging and promoting it. They make a video ($50,000) and play it on TRL (a bottle of Cristal to a girl called Maxie.. ) Total $225,199. That comes out of the royalty fee before the artist gets it, so our band actually OWES the label 25 grand.

The only realistic way for an artist to make a profit is to either sell millions of copies, or to write all the material (so they keep the few cents mechanicals per unit, which aren't recoupable). It's why writing credits on album tracks are such a hard-fought issue for bands in the middle range of sales, and the only bands to release albums entirely made up of cover songs are the ones that don't need any more cash in the bank.

If the label sells the music online there's a massive cut in overheads and no distribution or manufacturing costs, so the artist can win more points and break into profit far sooner.

mG

[Rockwulf]

"People always say they care about gourmet cheddar, but most will buy Cheez Whiz if it is competitively priced. It was not greed which set Tower prices higher than Wal-Mart’s. It was the simple economics of cost of goods sold and the economies of scale. Eight hundred pound gorillas like Wal-Mart can tell their suppliers what to charge. Additionally, chains like Best Buy or CostCo, which make most of their revenue from the sales of electronics or bulk items, will often sell things like music or books as what is known as loss leaders. A loss leader is an item sold at or below the store’s cost in order to attract customers."

Not being able to compete with loss leaders does not equal price gouging. It may equal no longer having a viable business, but that is not the same as gouging.

I wasn't comparing them to giants like Walmart or Bestbuy. I was talking about indie stores like Repo Records.

[Amelia G]

I wasn't comparing them to giants like Walmart or Bestbuy. I was talking about indie stores like Repo Records.

Stores like Repo Records make their dough on used music, which generally has a much better mark-up for the store than new music at its highest likely retail price.

Mind you, I think places like Repo are good for the community. Part of the pleasure of music is communal and I think it is important to have places to participate in enjoying it in person. Plus, reprobates with peculiar resumes need to be able to work somewhere.

[incog]

Maybe it'll help to give you all an idea of where the money goes for a CD sold in a record store. Stakes very a lot but for a typical CD album predicted to clear 1 million units domestic, from an artist signed to the label releasing it, you're looking at this:-

Payments taken by the record label
$0.75 : Manufacture per disc (pressing, inlay print, case.. less for a digipak)
$1.00 : Mechanical fees (approx 8% of wholesale)
$4.00 : Label share (profit, overheads and coverage for marketing, etc.)
$1.50 : Artist unit royalty

Payments taken by the distributor
$1.50 per unit for domestic B2B (ish)

The remaining value is taken by the retailer to cover their premises and staffing overheads, sales taxes, credit card fees and so forth.

"Artist royalty" needs some explaining. Every artist negotiates for "points" - a point is a fraction of the wholesale value of the CD, not the retail price. When you're bartering it's all down to past record of sales and predicted unit ships, so indies and newcomers often get between 1 and 5 points. Midrange artists (100,000 to 500,000 unit ships) can expect to see 10 to 15 points, and majors (people you know by their first name) can hold out for anything up to 40, but 25 to 30 is more typical.

A point is worth, looking at some figures from last month, about ten cents. It can be more, but before you work out 'a point' the label and distributor subtract all their fixed conditionals we've talked about above.

So, if you sell 200,000 units (typical for the sort of domestic midrangers Tower was known to stock), you earn $200,000 right? Wrong. The label has lent you money and it gets it back first - something called a 'recoupable'. Say they gave you a $25,000 advance to pay your food bills while you were writing, then the cost of recording the album and paying the producer came to $100,000. Now the band goes on a promo tour, and the label pays $50,000 towards the costs of staging and promoting it. They make a video ($50,000) and play it on TRL (a bottle of Cristal to a girl called Maxie.. ) Total $225,199. That comes out of the royalty fee before the artist gets it, so our band actually OWES the label 25 grand.

The only realistic way for an artist to make a profit is to either sell millions of copies, or to write all the material (so they keep the few cents mechanicals per unit, which aren't recoupable). It's why writing credits on album tracks are such a hard-fought issue for bands in the middle range of sales, and the only bands to release albums entirely made up of cover songs are the ones that don't need any more cash in the bank.

If the label sells the music online there's a massive cut in overheads and no distribution or manufacturing costs, so the artist can win more points and break into profit far sooner.

mG

Thank you for posting that. People have this idea like every time you move a million units then your band gets like 18 mill and it doesn't work like that.

[incog]

Oh and good article, Amelia. Poignant and thoughtful.