By Richard Menta 2/26/09
As I perused the music section of my local Barnes and Noble store I noticed something interesting. The CD racks that hawked the records of the major labels - racks normally bulging with product - were half empty. It seemed clear that the turndown in the economy has hampered music sales; badly enough that the book chain is not re-ordering to fill the racks back up.
I went to two other Barnes and Nobel stores only to find the same thin CD shelves. Barnes and Noble is one of the largest sellers of records in this country and with the demise of Circuit City, another large CD vendor, one can only guess at the potential carnage coming over the horizon.
What is happening at these two chain stores may be an ominous clue that the record industry will see its biggest sales drop ever in the coming quarter. Validating this is the news that last week, Taylor Swift scored the lowest number-one record in the US ever with sales of only 62,000. Even the RIAA is not immune, laying off 30 staff members this week.
This insight may be anectdotal rather than scientific, but sometimes simple observation is all you need to tell you that something is going wrong. Of course, the big labels will continue to point the finger at files sharing, but as TorrentFreak points out this has only distracted them from the other factors affecting their business. Add to that the poor public relations that the industry has garnered this past decade (as we detailed at length in our August 2007 story Record Industry Woes Aggravated by Years of Bad PR) and you can see they won't get a lot of sympathy from consumers either. The CD may not be dead, but the business models built around it are failing.
In an economy that may see the death of General Motors, the days of the major label look to be quickly waning. Music will never disappear of course, it will just morph into something smaller and more efficient - as long as the feds don't allow Ticketmaster and Live Nation to merge.
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