With music fans gradually turning to online music services and large mass-market discounters such as Wal-Mart, Target and so on to get their music, Tower Records has reached such a critical state that four music major labels have stopped supplying Tower Records with CDs after failing to pay its debts to these companies. Tower previously recovered back from bankruptcy in 2004, but despite trying even to push more sales online, they have not made much success.
The company has been running for about 46 years now, aiming to offer the widest range of music as well as in the widest range of formats. They were the first to launch on online music download service back in 1995, turning into a robust sales site, long before even iTunes launched. However, despite trying to launch music download service again this year promising higher quality 192kbps tracks, it looks like it is too late to grab online fans again with a wide range of other Internet competitors out there, such as Amazon, iTunes and so on.
At present, they license music to 144 stories, which will start noticing a problem with Tower's existing stock from these 4 labels drying up and no longer having copies of new popular releases. As a result, it looks like this mark the final end for them in the near future.
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EMI Group, Sony BMG Music Entertainment, Warner Music Group and Universal Music Group stopped sending CDs to Tower stores within the past two weeks after Tower missed debt payments to the companies, according to label sources. Tower's bill to Warner distributor WEA might be $20 million alone, reported trade paper The Hollywood Reporter. "This was inevitable," said Phil Leigh, senior analyst at Inside Digital Media in Tampa, Fla. "Physical record stores like Tower will soon be obsolete." |
As supermarkets often subsidise the cost of CDs in order to lure in more customers to their stores, it becomes quite clear why consumers are less likely to bother heading to the record stores if they know they pop most of their favourite CDs in their cart while doing their usual grocery shopping. Even if they cannot find what they are looking for in their shop, this is where online ordering takes its effect in marking the end for traditional record stores, especially with some online stores selling discounted CDs worldwide free of shipping costs. Here in Ireland, I can easily buy CDs online for around half the high street price. This has already caused problems with IRMA attempting to sue CDwow for buying in lower cost CDs from Hong Kong as they consider this unfair competition for locally run music stores.
Source: Monterey County Herald
