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Tuesday, August 22, 2006

Tower Records, Farewell and Goodbye


Tower Records began life as a single store in Sacramento. It was very similar in appearance and size to Amoeba Records on Haight.

Then Tower Records began a period of explosive growth. The chain opened stores throughout California and eventually throughout the United States.

Today it is all crashing down arround us. Fewer people are buying music from retail stores and vinyl records, of course, are already classified by many as nothing more than 20th century collectibles.

Trans World Entertainment, one of the largest specialty music and video retailers in the United States, has over 800 stores in 26 states. Brands currently controlled by Trans World include Wherehouse Music, Coconuts Music and Movies, Strawberries, Spec's, CD World, Streetside Records and Planet Music.

Tower Records has been losing so much money that Trans World will assume ownership without paying a dime. Trans World agreed to pick-up Tower Record's entire debt load.

Trans World, unless it drastically changes its business plan, will also slowly shrivel up and blow away just as Tower Records is doing. The era of buying music as a physical product (vinyl records, CD, DVD, tapes, etc) is coming to a close. In not too many years Virgin Records, Blockbuster and Netflix will be nothing more than memories. People simply do not buy as much music and video in solid physical format as they used to in the prior century.

Rather, we buy a bundle of rights along with the digital music we download so easily with iTunes or MTV's new URGE music service that integrates so well with Microsoft's Media Player 11. Most record shops are going the way of blacksmith shops, shoe repair shops and offset printing shops. They are disappearing. Yet, a few specialty niche record shops will make it.

Amoeba Records will probably do an even better business catering to CD and vinyl record collectors. It's interesting to note that the business model Tower Records had at the time they began their expansion back in the 1960's was a model very similar to the one used successfully today by Amoeba Records. Tower Records abandoned that model in favor of high-volume replicated chain stores. That business model did not outlast the 20th Century.

 Russ Solomon, who began Tower Records in Sacramento, opened his second store on the corner of Bay and Columbus in San Francisco in 1967. Tower Records has been a San Francisco institution for nearly 30 years.
on Tuesday, August 22, 2006

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