Tower Records Tries To Reinvent The Record Store… With Free Music Podcasts?

Surprises

from the desperation-sets-in dept

Back in 2003, we pointed to an interesting discussion suggesting that the record labels weren’t really the biggest stumbling block in having the recording industry embrace digital music: it was the music stores, like Tower Records. However, it’s become clear that those stores have lost most of their power position, with many of them (including Tower) declaring bankruptcy as they tried to figure out how to compete in this new world. Some of the smaller, indie record stores started experimenting by trying to turn their stores into destinations — a move that was recently followed up by well known mall music chain Sam Goody planning to turn its stores into big destinations.

But what about the biggest brand name of them all, Tower Records? While it was pretty meaningless in real terms, the company had many people writing its obituary when the news came out that Apple’s iTunes had surpassed Tower Records in terms of sales. As we noted at the time, if you looked at the list of retailers who were at the top — all of them were using music as a loss leader, and not trying to make money off of it. All of them made their money elsewhere. Tower, however, had stubbornly stuck to selling mostly music — a business model that seems to be unsustainable. However, perhaps the indignity of being passed by Apple has kicked the company into gear, as it looks for a new business model. Rather than following others in creating a destination site, or trying to create yet another digital music store, the company has actually decided to let people download music for free online. The details aren’t that simple, of course. It sounds like (though it’s not clear) that you won’t be able to just download a single song, but you can create whole podcasts of songs, and then download the batch. They hope to make revenue from (what else?) advertising — though, in a twist, some of the ad revenue may get shared with the creator of the musical podcast (meaning it sounds like people will be able to play “DJ” by posting their Tower podcasts for others to download). Of course, since this doesn’t fit with the major labels’ world view, none of them are participating in the program — meaning that it’s limited to just 6,000 songs from a group of independent labels. It’s definitely an interesting experiment, though especially after seeing just how many hands are in the pie for any revenue that comes out of this experiment, it may very well be too little, too late for Tower Records.