Tuesday, November 4, 2008

Reminicing the days of huge CD shops.

Current Mood: Sad

Perhaps it was inevitable, but then somehow I hoped that it wouldn't happen.  The death of CD shops as we know them seems to have reared it's ugly head again with the closure of another CD shop, but this just wasn't another store.  It was Dirt Cheap CD's on Sydney's shopping strip, Pitt Street Mall.

I think they may have opened about 2001, but a friend told me about the store in late 2002.  From this time to about the earlier part of 2008, this shop you could say was one of my favourite hangouts.  I guess it's a place where I've spent hundreds, but admittingly I would have to confess that I've spent thousands of dollars over the years in this one particular store.  in 2004 - 2005 it would not be unusual for me to be walking out with twelve to fifteen CDs at a time. 

Today, my mother and I went to the city, to get my eyes checked, but fortunately, the appointment went quick.  My mother needed to look for some books at Dymocks on George Street, as I went to Dirt Cheap CD's on Pitt, discovering to my horror that the door was semi-open with all the shelves stripped.  The lady came and thanked me for my patronage, and told me that they were moving their business to the internet. 

Expecting to be browsing through the store for an hour, I ended up going to the JB Hifi underneath, but the range and price was just not the same.

It was only August last year, that HMV closed its huge mid-city store, due to mall renovations.  HMV did state in a newspaper article that they wouldn't re-open that particular store, due to the high rental costs of retail space. 

Reading this stuff took me back to the days of 1990 when the HMV Mid-City store just opened.  Directly opposite was a huge Virgin Megastore, two doors down was Strand Music, and at the end was an Edels Superstore.  A short walk down the southern end of Pitt Street would of taken you to the Brashes Superstore with another Edels three doors down from there.  December 1990 seemed to be the peak of CD retailing.  You only had to think of a CD back then, and any one of the six stores was bound to have it.  Now in 2008, it has become impossible to purchase anything, as the only place to get it seems to be Amazon. 

While flashing through the papers this evening, I came across the following article, noting that the Australian dollar had also pushed them out. 

So in the end, could the death of the CD be one step closer?

CD stores suffer death by download
From the Sydney Morning Herald
Friday 31st October 2008 at 9:17 am

The CD is going the way of vinyl. So, Too, are the cheap CD stores, as Kelsey Munro finds out.

NOT too long ago, you could walk south from the mall along Pitt Street in the Sydney CBD and pick up new CDs for $10 or less each and find plum bargains at several second-hand CD shops stretching all the way to Chinatown.

Things have changed.

The second-hand shops are disappearing and the discount options are narrowing. Today, the final NSW franchise of Dirt Cheap CDs on Pitt Street is the latest to shut down. At its peak, the six-year-old chain, known for $10 CDs, had five shops in Sydney.

Walter Lehne, the owner of the Dirt Cheap CDs chain, says the market has changed completely. "It's no secret that a huge amount of music is now legally downloaded," he says.

CD sales are suffering generally but the second-hand market has dropped even further, store owners say.

Michael McRae, who works at Red Eye Records' second-hand shop, says: "Where we are in Pitt Street there used to be numerous stores up and down; now there's basically nothing. It's all pretty much gone."

Along with downloads eating into retail sales, Lehne points to the buying power of big-chain CD retailers and the struggling Australian dollar for his decision to sell his business (the online store will continue.)

"The whole price market has changed: record companies now do deals with big major stores, like the JB Hi-Fis and Big Ws, Kmarts, Harvey Norman, so they go out at prices sometimes below what they sell to other people," Lehne says.

As for Dirt Cheap CDs' model of importing cheap CDs, margins were thin but the weak dollar has made it worse.

Specialising seems to be the secret to surviving as an independent. That has been the case for niche stores such as Ashwood's Music and Books, on York Street, and Red Eye, the 26-year-old record store that sells new and second-hand music in three shops in the Sydney CBD.

"Jazz and classical are still strong, vinyl is selling," says Ian Vellins, the manager of Ashwood's. "It's just that the contemporary pop CDs aren't selling because everyone downloads them. The only thing that's not selling is everything that would get an ARIA award."

McRae says: "Downloads have obviously had an effect on things but in general our business is OK - not as bad as you'd think."

Many small retailers cite competitive pressures on CD prices from JB Hi-Fi, which its chief executive, Richard Uechtritz, says is now Australia's sixth-largest retail chain, with 45 to 50 per cent of the music retail market. JB's policy of having a large range, deep back-catalogue and low prices has paid off, he says, and it still invests as much in its CD market as it did eight years ago.

"Unlike others, we've kept on in the doom and gloom about the hard-copy CD business," he says. "We've had great faith in the fact that people will want to continually buy CDs.

"The biggest threat to CD sales is not downloading, it's from movies and games."

The DVD film and games markets in Australia now surpass the CD market: games were worth $1.4 billion last year while music sales were only $700 million.

Uechtritz says it's not the end of cheap, legal music for people who still prefer CDs - that market "will be around for a long time yet".
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