Wednesday, March 4, 2009

Shortsightedness of the music business and the print media.

This motto should be tattooed on foreheads of all people involved in the recorded music and newspaper industries: NOT ALL OUR CUSTOMERS GET MUSIC AND NEWS SOLELY THROUGH COMPUTERS. IN FACT, SOME OF OUR CUSTOMERS DON'T EVEN OWN A COMPUTER.

Two articles about the closing of all Virgin Megastores by this summer:
Rolling Stone's take (check out this week's U2-cover story mag, where a print story on Virgin claims, among other things. that Borders Books are threatening to cut music-and-DVD space by 70% and other "Big Box" chains are threatening to cut their CD stock unless CD prices are lowered further):

A back-and-forth on a RS comments site regarding the FYE chain closing stores:
[FYE employee]:
I’m shocked at some of these posts. I was a store manager for FYE for 7 years, my store was closed last year. You people know nothing about the cost of doing business. The stores are not making any money. When you margins are around 30% there is no money to be made.
The music industry is gone, and It will never be back. You can thank Wal-Mart, Circuit City, Best Buy and downloading.
For the idiot who posted, “charging $18.00 for a CD a bad business model.” Go kill yourself.
We are witnessing an entire industry go under. Think about all the people that have lost their jobs. The people that were in the music industry were not in for the money. They were in it because they loved music.

[rebuttal from another poster]:
Dude-I realize you were a former FYE manager, but the problem wasn’t with you: It was a bad business model. The companies that have staying power are the ones that accept change and adjust the business model accordingly. Maybe on a smaller scale..But what dipshits at the top didn’t see this coming? Lack of selection, extremely high prices on product that is the bread and butter of an industry on the verge of collapse, and a dwindling economy= no business. I hate downloading as much as the next guy. People who haven’t heard real music and prefer the shitty sound quality of an mp3 are determining the course of the industry, it’s a sad thing. I love vinyl. I’d rather buy a cd by an artist I like..But truth of the matter is, I support the small indie retailer in my town, who happens to do a booming business even on these troubled times. One of the reasons= reasonable prices. If the profit margins aren’t substantial, the company needs to find a new way of doing things…Change (even bad change) is inevitable. You have to adapt…

(Full posts can be found here:

And, regarding newspapers, it looks to me like a dog-chasing-tail story:
Advertising revenue declines--maybe from loss of circulation, maybe from poor economy. Corporation which owns newspaper wants to keep maximizing profits, so massive cuts in newsroom and printing staffs are made and number of pages are reduced. Public reacts negatively to lower quality of newspaper and loses interest in buying individual copies/subscriptions.

Repeat all of the above until newspaper is sold or goes out of business entirely.

To blame the poor health of the traditional newspaper mainly on the Internet and its greater facility for updating and adding news/sports/business/entertainment stories (plus the banner ads on websites) is sheer self-destructive silliness.

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