After Decatur CD owner Warren Hudson had sent a dozen customers to Walmart for the new DVD from local country sensations Sugarland because of their exclusive distribution deal with the big-box retailer, he made his disapproval public by penning an open letter to the band. It stated, “By shutting the door on independent record stores, you’re in effect shutting the door on your hometown”; it elicited an immediate response from Sugarland’s Kristian Bush, who apologized and offered to hand-deliver the DVD to his hometown record store. The plan to “peel off the Walmart stickers” lasted exactly as long as it took Walmart to catch wind, but Bush still paid a visit to the indie retailer to sign autographs and make nice.
The hubbub, which drew nationwide attention, raises the question of just how big a problem big-box retailers pose to local indie record stores, such as Decatur CD, Criminal Records, Wax N Facts, and Buckhead’s old-school Fantasy Records. We talked to Hudson, who took his first record store job in 1968 and has run Decatur CD since 2003, about the biggest threats to his industry.
Threat: Big-box retailers such as Walmart, Best Buy, and Target
Warren’s take: “Frankly, I’m not concerned at all. They’re cutting back inventory. My problem is that they put things on sale cheaper than I can buy them to entice people to come in and buy a computer or refrigerator. People get the idea that all records should be $9. When we pay $12 or more, there’s nothing we can do.”
The facts: Walmart sells CDs as low as $7 and has a 20 percent share of the physical music market (Best Buy has 16 percent, Target and Amazon have 10 percent each). Two-thirds of all CD sales are made at large chains.
Threat: Paid digital downloads from Amazon and iTunes
Warren’s take: “In my opinion, our biggest competition is Amazon because people are creatures of habit. I’ve had customers come in and ask for something. I’ll say, ‘I can have that for you at noon tomorrow,” and they’ll go, ‘I’ll just go home and order it on Amazon.’
The facts: Digital sales are growing by 15 to 20 percent a year. CD sales are falling at a similar rate, meaning they’ll be nearly equal by next year. iTunes has the world’s largest media library and has sold more than 6 billion songs since launching in 2003, making it the top music retailer, period.
Threat: Illegal downloads
Warren’s take: “The problem is not the paid services, it’s the illegal downloading, the people that don’t pay anything at all, and they’re proud of it. It’s misplaced morality. Kids learn earlier and earlier how to do it. They get out of the habit of purchasing. When you’re weighing $15 against free, it’s kind of a conundrum, I guess you might say.”
The facts: One study found that teens and students have an average of 800 or more illegal songs on their MP3 players. Legal music downloads are outnumbered by illegal downloads by a margin of 10 to 1.
State of indie record stores
Warren’s take: “It’s a very difficult business. You have to put in long hours, and it has to be a labor of love or you don’t have a chance to be successful, but now with the economy and the technological shift, it’s become daunting. People don’t see the big picture; if folks don’t come into independent record stores to shop, we won’t be here. There’s no question. . . . But there’s more great music now than in any time in the history of recorded music. It’s right now.”
The facts: There are about 2,000 independent music retailers in the U.S, down from more than 3,000 in 2003, and they account for less than 10 percent of retail sales.
Why it matters: “Every time I go to Decatur CD,” says ‘Chuck R.’ on Yelp.com, “I spend a little more money than I meant to, but I always come home with music I didn’t know about but wind up loving. And when I die, I’d rather have those tunes in my head than that money in my pocket.”
Photograph by Caroline Kilgore