The music retail industry is hurting. Singles sales are down 42 percent, CD sales are down 6.8 percent. Tower Records and Wherehouse are struggling, big chains like Djangos have filed Chapter 11, and Napster clones continue to chip away at major-label power. It seems like a bad time to be in the music biz. Apparently that’s not true in Seattle, though, where indie record stores are expanding and new ones are popping up everyday.
Take a walk down Broadway, for example. Next to Pagliacci Pizza, a new vinyl and DVD store called Grüv opened two months ago. Before opening in January, Grüv operated successfully for three years as a tiny, cluttered kiosk in the Broadway Market. Frequency 8, another Broadway vinyl store, opened a year and half ago, as did Music Werks, a goth music store on 11th across the street from Value Village. A ton of local record stores have also expanded recently. Late last year, DJ stores Beats International, Platinum Records, and Zion’s Gate all expanded. Across town in Fremont, indie record store Sonic Boom is doing so well, they opened another store in Ballard last October. If national CD sales are down and the big chains are flopping, why are there so many new and expanding record stores here?
For one–and most importantly–the aforementioned indie stores are mostly “niche” businesses and don’t even sell CDs; they sell vinyl. This has insulated them from the CD and singles downturn. The DJ scene, which exploded nationally about 10 years ago and in Seattle about two years ago, saved vinyl and led to a new growth industry. Just look around: Seattle reflects the trend. There are now more kids listening to DJ music, more Seattle clubs like Nation and the Baltic Room playing it, and more businesses selling it. “Selling vinyl records is definitely a good business to be in right now,” says Stephen Benbrook, the dread-headed owner of Zion’s Gate records. (According to the Recording Industry Association of America, vinyl shipments grew almost four percent last year.)
Vinyl also has advantages for small business owners just starting out. Despite the vinyl’s business drawbacks–high cost of shipping and larger retail space requirements–it can actually be cheaper for new shop owners to buy than CDs. This is also the reason many of the popular DJs and groups that put out vinyl are “underground” and not on major labels. (Small acts that put out vinyl generally don’t have the big advertising and promotional costs major labels pass on to the consumer with high CD prices.) Consequently, many record stores that specialize in vinyl can afford to carry a lot of titles, and because of the popularity of the DJ scene right now, they have a small but devoted consumer base.
Secondly, all of Seattle’s new and expanding record stores are independent, and therefore run completely differently from the bankrupt big chains. They’re small and nimble, which enables them to operate more efficiently, keep costs down, and adapt to tough economic times. Local retail space is pretty cheap right now, and overhead is low. And since the small record stores aren’t trying to be all things to all people (like the big chains are), they can have smaller inventories. Furthermore, in chain store operations, one location generally orders the inventory for all the stores across the country. This decreases the chance of making money off successful local acts. “I can’t tell you how many Carissa’s Wierd CDs I’ve sold,” says Sonic Boom co-owner Jason Hughes emphatically.
Sonic Boom stocks more CDs than vinyl, but it’s able to sell the CDs cheaper than the chains. Like most small record stores, Sonic Boom orders music directly from the labels. There’s no distribution middleman like most of the big chains use. At Tower Records on Mercer Avenue, the Belle & Sebastian CD Tiger Milk, for example, is $17.99. It’s four bucks cheaper at Sonic Boom.
Local biz Silver Platters (Bellevue, Northgate, and Tukwila), which looks like a general-interest chain store, is doing well precisely because it’s not like Tower. Silver Platters is an independent, which allows it to tap into a niche market of its own–and their niche is stocking artists’ complete catalogues. The chain business model typically carries only an artist’s newest or most popular releases. Silver Platters doesn’t rely on those releases, and its devout record-collector base keeps the money rolling in. By definition a big music chain has no niche, because it appeals to everyone. And that doesn’t seem to be working anymore.