It's no secret that the sound of music has changed, not to mention the biz. Privately held Tower Records seems to have missed a beat. The Associated Press reported Thursday that Tower's considering filing for Chapter 11 bankruptcy protection, having failed to find a buyer over the past year.
Here's a flashback. Other than small, independent record stores, Tower Records was once one of very few stops I made when looking for obscure music of mostly imports and indie bands. (And, yes, kids, I bought all that stuff on vinyl, just to date myself a little here.)
Fast forward nearly 20 years (ouch), and the scene has changed. When I'm searching for hard-to-find hits, Amazon.com's (Nasdaq: AMZN ) my only solution. My occasional recent trips to Tower -- driven by the hopes for instant gratification -- have been disappointing.
Most of the time, I didn't find what I went for, other than a few CDs I only picked up because they were on super special. Then I'd observe that there were only a handful of shoppers wandering the store. It's a far cry from the days when Tower -- now owned by MTS Inc. -- had an electric, almost clubby atmosphere and just about screamed hip.
It's not just Amazon, though. The digitalization of tunes is a disruptive force in the business of music; we all know the piracy story. Meanwhile, Apple Computer (Nasdaq: AAPL ) , Microsoft (Nasdaq: MSFT ) , and Wal-Mart (NYSE: WMT ) are all clamoring to join in the (legal) downloading fun.
In the "burn, baby, burn, disco inferno" category, CD burning has allowed folks to easily replicate their friends' disc collections. Meanwhile, I recently found myself admiring a friend's iPod, as she raved over the loads of music she had saved in this tiny contraption that looked like a handheld video game.
So, Amazon's got the selection, Apple's got the hip gizmo, Wal-Mart and Best Buy have the discounts, and Borders has the books, cafes, and comfy chairs. Where does that leave Tower?
Reportedly laden with debt, Tower's way out of tune. Regardless of whether it finds a buyer or files bankruptcy, it needs to rethink its business and the current climate, and find itself a groovy new groove. Tower may have been a great place to go for musical obscurity in the past, but the lesson for investors is watch out for businesses that don't see the threat of obscurity coming.
Speaking of burning music, a lot of that old, obscure vinyl that Alyce Lomax mentions above got lent out to a friend, and then it melted in direct sunlight in the backseat of a car. Sad, but true. She welcomes your feedback via e-mail.