In praise of the middleman

In the music business today, it sometimes feels like it’s every man for himself.

For much of the past 40 years competition within music proceeded along predictable lines.

Artists have competed for chart positions. Record companies have competed with other record companies for market share. Likewise music publishers and retailers have fought within their own sectors for dominance.

What marks out the new competitive environment is that it has pitted different sectors against each other in what sometimes feels like a desperate game of musical chairs in which not just individuals are fighting for their jobs, but key sectors are fighting each other for dominance.

The reason of course is digital technology, which not only clears the path from the music to fan, it threatens to cut huge swathes of ‘middlemen’ out of the loop.

Of all the middlemen in the music industry it is music retailers who seem most often to be written off or, worse, to be disregarded in the debate about the future of music.

I am the first to admit that it has taken the Entertainment Retailers Association (ERA) a while to find our feet in the new world. The resilience of UK record sales in the first half of this decade - mainly driven by the continuing expansion of the UK music retail estate - led us to disregard the warning signs from the US and mainland Europe.

We suddenly found ourselves on the back foot in a series of debates - from the inclusion of downloads into the singles chart to the renewed wave of covermounts on newspapers.

In the case of downloads, we had grave concerns about admitting a format so dominated by a single player, a position few would argue with today.

In the case of covermounts, we feared - correctly as it turns out - that covermount culture would lead to a wider devaluation of recorded music.

But what all these debates have forced us to do is to reassess the function and future of music retailing in the new world. It has been an unfamiliar and sometimes painful process.

'we’ve been forced to reassess the function and future of music retailing - it has been an unfamiliar and sometimes painful process'

But out of it has come a renewed sense of purpose and confidence in the future of music retailing, and it is this which I believe provides lessons for other sectors in the wider music industry.

Yes, physical music sales are in decline, but - to put it in context - around 90% of recorded music revenues still come from physical music stores. The recent revival of vinyl indicates that the desire for physical music formats is deep-seated and transcends technological innovation.

Likewise, it is becoming clear that the rise of digital sales will not come at the expense of retailing; it is being driven by a new generation of retailers.

The traditional skill set of retailers - defining a product offering, aggregating music from a range of suppliers, understanding the product and, above all, understanding the music fan - are becoming more, rather than less important.

In other words the future of music retailing depends very much on our understanding the real value we add to the music buying experience and then playing to those strengths.

The music retail experience needs to be as rich and exciting and involving as that offered by our competitors in the book, the mobile phone and the technology markets.

Recent developments such as HMV’s new store format, the move of Amazon into downloads and the new Rough Trade store in London’s Brick Lane are all showing the way.

Above all, we must listen to the music fan and try to give them what they want, rather than what suits the music business.

It is in this latter area that I believe music retailers define their true value to the broader ecology of the music business. We are the final link in the chain between the music and the music fan.

We earn our seat at the table to the extent that we discharge that responsibility not just to represent the music to the music fan, but to represent the wants and desires of music fans back to the industry.

All of us in the music industry - record companies, publishers and managers, just as much as retailers - need to think long and hard about the value that we add to the music fan.

As long as we do indeed continue to add value, we should be confident that we have nothing to fear from the future.

Kim Bayley is Director General of the Entertainment Retailers Association