Monday, March 26, 2007

I'm Looking Through You

I’m definitely bummed about the Starbucks / Paul McCartney deal.

It’s a genius business deal, and if we’ve learned anything about either corporation (Starbucks or Paul McCartney,Inc), we’ve learned that both are incredibly savvy about understanding their product, their business model and their target audience. I don’t knock either of them for the deal… it seems to make great financial sense. McCartney gets guaranteed in-store play of another sure to be mediocre, lifeless cd (quick… name 2 songs off any McCartney record in the last 30 years – yeah, I couldn’t do it either). Starbucks execs get to walk around slapping each other on the back saying “Can you believe we signed a Beatle?” And the kicker is… this new record will be his best seller in years, ‘cause people willing to spend $5.00 for a cup of coffee will have no problem shelling out $18.00 for something with McCartney’s name on it. They’ll listen to it once, and then never again. And if Starbucks somehow negotiated the rights to any of McCartney’s “good” albums (read: before 1980… and yeah I know Flaming Pie was supposedly great – but you didn’t buy it, did you?), then this deal could be a financial windfall for both corporations.

It’s just that I like my music to be made by rock groups or hungry singer-songwriters that haven’t devolved into multi-national merchants of pop pap… and I know it’s my hang-up. The Starbucks brand was responsible for Antigone Rising, a totally unremarkable yet earnest and polite cd from an all-female group that probably gave the coffee company tastemakers visions of Sheryl Crow or Indigo Girls-like success. Their incredibly non-noteworthy cd, “From The Ground Up”, sold an astounding 70,000 in Starbucks alone. And while no one could ever convince me that Ray Charles was anything less than a genius, his Genius Loves Company was MOR schlock, yet his biggest seller in decades (at one point, Starbucks had sold 775,000 of the 3 million copies sold). And that’s the power of Starbucks… bringing schlock to the caffeinated masses.

So bravo to Paul McCartney… he’s made a great financial decision. But Starbucks as musical tastemakers – here are some reasons I say nyet:

1. This quote from Ken Lombard, president of Starbucks Entertainment, discussing how far the chain will go into music without diluting its coffee heritage - “The customer won’t go into the store and feel like they’ve walked into a music store”. Is it possible that the reason the music industry is struggling (especially bricks and mortar stores) is that people would rather buy their music in an overpriced coffee shop than an enlightened music store. Boo.

2. Isn’t it a shame that Starbucks customers will only hear and therefore only buy: watered down Ray Charles, classic rock repackages, acoustic Alanis Morisette, boreass smooth jazz or jazz lite, Coldplay (which is now a whole form of music), Dave Matthews, Amos Lee and other bland soft rock peddlers?

3. They reneged on a deal to carry Springsteen’s Devils and Dust because of the off-color “Reno”. The reason they gave was “scheduling difficulties”. That’s their prerogative – but what a bunch of cowards – I’d had a lot of respect for them if they just said it’s joyless, tuneless borefest.

4. People are lazy and stupid… Starbucks is charging list price ($17.98 or so) and people are paying it. For the love of god, go anywhere else and PAY LESS!

5. Record companies are whores... all of them. Starbucks typically pays $9.00 for Coldplay’s $17.98 X and Y disc and then sells the cd for $17.98. Your local indie store is paying their distributor about $12.00 and selling the cd for $14.99 or $15.99. I know all about economies of scale and quantity discounts, but this is just plain wrong. Look… if you’re downloading music, by all means, click away. But if you still buy cds and there’s a local indie store anywhere near you, please buy the new Norah Jones there instead of Starbucks. It’ll make you feel good.
6. Paul McCartney not on Capitol Records is like Joe DiMaggio not in pinstripes.

7. The homogenization of America… if you have options, why not patronize local businesses instead of Wal-Mart, McDonald’s and Starbucks. Do you really like paying $5.00 for a cup of coffee?


v said...


From yesterday's NYTimes.


Spinning Into Oblivion

Published: April 5, 2007
DESPITE the major record labels’ best efforts to kill it, the single, according to recent reports, is back. Sort of.

You’ll still have a hard time finding vinyl 45s or their modern counterpart, CD singles, in record stores. For that matter, you’ll have a tough time finding record stores. Today’s single is an individual track downloaded online from legal sites like iTunes or eMusic, or the multiple illegal sites that cater to less scrupulous music lovers. The album, or collection of songs — the de facto way to buy pop music for the last 40 years — is suddenly looking old-fashioned. And the record store itself is going the way of the shoehorn.

This is a far cry from the musical landscape that existed when we opened an independent CD shop on the Upper West Side of Manhattan in 1993. At the time, we figured that as far as business ventures went, ours was relatively safe. People would always go to stores to buy music. Right? Of course, back then there were also only two ringtones to choose from — “riiiiinnng” and “ring-ring.”

Our intention was to offer a haven for all kinds of music lovers and obsessives, a shop that catered not only to the casual record buyer (“Do you have the new Sarah McLachlan and ... uh ... is there a Beatles greatest hits CD?”) but to the fan and oft-maligned serious collector (“Can you get the Japanese pressing of ‘Kinda Kinks’? I believe they used the rare mono mixes”). Fourteen years later, it’s clear just how wrong our assumptions were. Our little shop closed its doors at the end of 2005.

The sad thing is that CDs and downloads could have coexisted peacefully and profitably. The current state of affairs is largely the result of shortsightedness and boneheadedness by the major record labels and the Recording Industry Association of America, who managed to achieve the opposite of everything they wanted in trying to keep the music business prospering. The association is like a gardener who tried to rid his lawn of weeds and wound up killing the trees instead.

In the late ’90s, our business, and the music retail business in general, was booming. Enter Napster, the granddaddy of illegal download sites. How did the major record labels react? By continuing their campaign to eliminate the comparatively unprofitable CD single, raising list prices on album-length CDs to $18 or $19 and promoting artists like the Backstreet Boys and Britney Spears — whose strength was single songs, not albums. The result was a lot of unhappy customers, who blamed retailers like us for the dearth of singles and the high prices.

The recording industry association saw the threat that illegal downloads would pose to CD sales. But rather than working with Napster, it tried to sue the company out of existence — which was like thinking you’ve killed all the roaches in your apartment because you squashed the one you saw in the kitchen. More illegal download sites cropped up faster than the association’s lawyers could say “cease and desist.”

By 2002, it was clear that downloading was affecting music retail stores like ours. Our regulars weren’t coming in as often, and when they did, they weren’t buying as much. Our impulse-buy weekend customers were staying away altogether. And it wasn’t just the independent stores; even big chains like Tower and Musicland were struggling.

Something had to be done to save the record store, a place where hard-core music fans worked, shopped and kibitzed — and, not incidentally, kept the music business’s engine chugging in good times and in lean. Who but these loyalists was going to buy the umpteenth Elton John hits compilation that the major labels were foisting upon them?

But instead, those labels delivered the death blow to the record store as we know it by getting in bed with soulless chain stores like Best Buy and Wal-Mart. These “big boxes” were given exclusive tracks to put on new CDs and, to add insult to injury, they could sell them for less than our wholesale cost. They didn’t care if they didn’t make any money on CD sales. Because, ideally, the person who came in to get the new Eagles release with exclusive bonus material would also decide to pick up a high-speed blender that frappéed.

The jig was up. It didn’t matter that even a store as small as ours carried hundreds of titles you’d never see at Best Buy and was staffed by people who actually knew who Van Morrison was, or that Tower Records had the entire history of recorded music under one roof while Costco didn’t carry much more than the current hits. A year after our shop closed, Tower went out of business — something that would have been unthinkable just a few years earlier. The customers who had grudgingly come to trust our opinions made the move to online shopping or lost interest in buying music altogether. Some of the most loyal fans had been soured into denying themselves the music they loved.

Meanwhile, the recording industry association continues to give the impression that it’s doing something by occasionally threatening to sue college students who share their record collections online. But apart from scaring the dickens out of a few dozen kids, that’s just an amusing sideshow. They’re not fighting a war any more than the folks who put on Civil War regalia and re-enact the Battle of Gettysburg are.

The major labels wanted to kill the single. Instead they killed the album. The association wanted to kill Napster. Instead it killed the compact disc. And today it’s not just record stores that are in trouble, but the labels themselves, now belatedly embracing the Internet revolution without having quite figured out how to make it pay.

At this point, it may be too late to win back disgruntled music lovers no matter what they do. As one music industry lawyer, Ken Hertz, said recently, “The consumer’s conscience, which is all we had left, that’s gone, too.”

It’s tempting for us to gloat. By worrying more about quarterly profits than the bigger picture, by protecting their short-term interests without thinking about how to survive and prosper in the long run, record-industry bigwigs have got what was coming to them. It’s a disaster they brought upon themselves.

We would be gloating, but for the fact that the occupation we planned on spending our working lives at is rapidly becoming obsolete. And that loss hits us hard — not just as music retailers, but as music fans.

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