Indieconomics 101

That darn Long Tail!

Following Doug Freeman’s article “A Market of Multitudes,” which discusses in great detail the new indieconomics of the Long Tail, Off the Record pulled together a few of Austin’s more established music retailers to address the changes that have been brought on by the Digital Age.

Off the Record: What is a record store's role in the new digital economy?
John Kunz, owner of Waterloo Records: A record store's role in the new digital economy is the same as it's been in the brick and mortar economy: To help people find what they're looking for; to help direct people to what they don't yet know that they will be looking for; to be a filter for the best music out there; and to be an exciting bridge between musicians and their fans.

Dan Plunkett, co-owner of End of an Ear: I think there will always be a good-sized customer base that wants to have the actual product – vinyl, CDs, 7-inches. It seems a lot of folks that shop here tend to use the Internet as research, as in ‘I downloaded this track and now I want the album.’

Bernard Vasek, owner of MusicMania: We have to strengthen our strengths. We sell a lot of rap, so we stay on top of that and try to offer things that aren’t available for download.

Charles Lokey, owner of Encore Video: We feel that our knowledge and expertise in a genre such as metal will act as a guide to our passionate fans. We hope to direct them to products that they feel will satisfy their desire.

OTR: What changes have you made to address this issue?
JK: WaterlooRecords.com has been a fully sales transactional website now since 2002, and online sales of CDs continues to be a successful, growing part of our business in this contracting industry. 12 years ago we helped found the Coalition of Independent Music Stores (CIMS), and we're working in partnership with all these great indie stores to make each of our websites into digital store fronts able to sell digital albums and tracks. Now that the majors have all finally seen the folly of digital rights management (DRM), there's finally somewhat of a light at the end of the tunnel for indie stores to digitally sell music and compete with iTunes, Amazon, etc. All of the Waterloo staff [write] reviews and recommendations on our store's 'Back Wall,' which are posted online. Same with our 'Waterloo Recommends' picks found monthly in the Chronicle, plus hundreds of photos from our many in-store performances. We're recording most in-stores with the hopes that some might be released as 'Live at Waterloo Records' CDs such as the Marcia Ball release from 2004. Down the road we hope to be able to webcast some of these one-of-a-kind in-store performances, digitally bridging the artists and their fans in a true Waterloo experience. Finally, and personally the most exciting for me, is the resurgence of interest in old school vinyl. Waterloo's record sales, both new and used, are exploding as the younger generation finds and embraces the 'warmth' of vinyl's analog sound. Waterloo also sells affordable Ion and NuMark USB turntables, which record one's analog record collection to their digital hard drive, iPod, or MP3 player.

DP: We try to provide a diverse selection of albums that are hard to find and offer albums that are amazing records basically.

BV: We don’t have much of an online presence. We update our Myspace page with information about new arrivals, sales, and upcoming in-store appearances.

CL: We are in the design stage of a new website utilizing an open source e-commerce shopping system that includes standard mail order with digital delivery.

OTR: Are record stores now responsible for tracking the trends in the blogosphere?
JK: Sure. First and foremost, everyone here at Waterloo is a huge music fan. Like a lot of music fans, we're on Facebook, Myspace, YouTube, Pitchfork, XM, and lots of our favorite bands' websites reading and posting about what's good. So tracking these trends just naturally happens, like us going out often to see and hear live music, reading music mags, listening to great radio programs, etc. Plus, like always, our customers help out too. They're perusing all sorts of small unique blogs and sites keeping us posted just like they did with the Xeroxed music 'zines of the last century.

DP: It helps, plus some are a great place to do research and discover records we might not know about. For instance, looking at discussion blogs and finding out about amazing reissues of records we didn't even know existed.

BV: I would say that you have to know what your competition is doing and try to do something different.

CL: That's a really hard thing to accomplish overall, as there are so many diverse tastes in music. We do pay attention to the genres we have had success in marketing.

OTR: Do artists still need labels in order to have successful physical sales?
JK: One way or another, I believe artists need someone to perform label functions. There have always been artists that are DIY in this regard. The Internet certainly facilitates DIY, but the functions that a record label provide are very different from writing, recording, performing, and touring songs. Label functions can be done in house, but they need to be done very well to be successful. Physical music sales still represent about 80% of all recorded music revenues. Radiohead certainly realized that they needed help and expertise with regard to the physical sales and distribution of their highly publicized digital release, In Rainbows.

DP: Some bands and acts do. Some don't. It goes both ways, and depends on each individual situation.

CL: I think so. I don't see how an artist can support the release of a CD or any item without grass roots support in key markets. Some of that might be accomplished with street teams, but a well directed marketing team can accomplish what no one artist might. Some of the labels have well-trained and prepared staffs with a lot of experience in getting the word out about an artist. Boots on the street are important. From a field marketing rep, a college rep, and a sales rep they are able to deploy their talents at the critical time and place.

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