NARM celebrates 50 years
MUSIC CHANNEL GUIDE: Industry faces falling CD sales, but there’s hope in DVD
By Chris Gennusa -- Video Business, 4/28/2008
APRIL 28 | MUSIC CHANNEL GUIDE: In an industry that glorifies youth, turning the big 5-0 often signals the end of the road. But the National Assn. of Recording Merchandisers, founded in 1958 when songs such as “Johnny B. Goode” and “Who’s Sorry Now?” topped the charts, has no plans to fade away.
Independent retail chains such as Amoeba are facing an increasingly challenging music industry.
Members of the Marlton, N.J.-based nonprofit association operate approximately 7,000 storefronts across the U.S. and account for 90% of U.S. music sales, including downloads and bricks-and-mortar and online packaged media retailers. The 50th anniversary NARM convention is being held May 4-7 in San Francisco.
“NARM [events] are a great place to learn fresh ideas and conduct business,” says Rachelle Friedman, CEO of New York’s J&R Music and Computer World.
“NARM has been doing a great job already by making retailers aware of what’s out there,” adds Mike Carden, North American president of music DVD supplier Eagle Rock Entertainment. “The Tuesday new release memo that goes out to members is great for [promoting titles].”
Unfortunately, CD sales continue to dip, and music DVDs are doing little to pick up the slack. The Recording Industry Assn. of America estimates that from 2005 to 2006, CD sales in both units and numbers were down about 13%, with DVD music down 25% to 30% for the same period.
The International Federation of Phonographic Industries reports that 2007 total global music sales grew by 14%, thanks mostly to digital delivery. But the CD sales category declined nearly 20%. “The growth rate of around 40% in digital sales did not offset the sharp fall in CD sales globally,” according to an IFPI report.
On the video front, NARM’s membership can take some comfort in the fact that the high-definition disc format war is over.
“Price is the big thing, and customers feel shell-shocked with all these new formats,” says Tony Green, who manages the San Francisco location of California’s three-store Amoeba Music chain. With the war over, Amoeba and others are ready to move ahead.
“My advice to retailers is to merchandise properly and DVDs will sell,” says Eagle Rock’s Carden. “Retailers need to put product out in front of the consumer for them to buy it.”
The online and bricks-and-mortar J&R carries not just 100,000 CD titles and another 50,000 DVDs but home entertainment systems as well. “We’ve cross-promoted the hardware with the software, and that has proven to be very successful,” says J&R’s Friedman.
Not every NARM member is jazzed about Blu-ray. “Music is 8% of our DVD sales, which are 30% of our overall sales,” says Virgin senior music product manager Andrew Gyger. “DVDs are hit or miss for us, and a lot depends on the release schedule.” But Gyger is a bit surprised that Blu-ray hasn’t excited more of Virgin’s flock. “Our stores tend to attract a lot of early adopters, buyers who would be more receptive to Blu-ray than standard-definition DVDs.” Even so, Virgin’s customers are regularly treated to Blu-ray demonstrations, Gyger says.
Though Blu-ray has won its place in stores, there’s always something new for NARM retailers to contend with.
“There are a lot of new products and business models being tested out there—open MP3 formats, subscription services, digital album cards, USB drives,” says Friedman. “You can be sure that exploration and analysis of this testing will be the top conversation at NARM.”
