Peeples closing a lesson in music industry
January 15, 2002
On Jan. 31 Ames will lose its only independent music shop, Peeples Music. Obviously, this is not a big deal to the majority of ISU students. If it was, the store wouldn’t be closing. But it is. And for those of us who shop there regularly, it is a big deal.
Last week I spoke with Peeples manager Charlie Chapman about why his store is folding. I wrote a full story about the store closing, and the state of independent music retailers in general, which will appear in this week’s High Note.
Chapman says there are currently lots of odds stacked against indie stores. The United States is in a recession. People are less willing to spend their discretionary income on entertainment and recreation items, such as albums. And, Chapman claims, there is a lack of viable, artistic musicians producing albums today.
All these reasons surely contributed to Peeples’ demise, but I discovered something much more powerful at work against indie music stores. I realized how naive I really was about the inner workings of the music sales industry and how large a part the government plays in the fate of these stores.
After researching a bit and speaking with other music store owners in Iowa, I learned a little more about how the system works.
Five leading distribution outlets – Universal, BMG, Sony, EMD and WEA – sell over 85 percent of the music in the U.S., according to the Federal Trade Commission. These five giants sell music to corporate retailers including Sam Goody, Hastings and Best Buy, as well as to independent stores, like Peeples.
In the early ’90s, CDs became increasingly available, especially in department stores and electronics stores. Store owners at these chains, such as Wal-Mart and Circuit City, would sell CDs below cost – and actually willingly lose money – in order to entice customers to their stores to buy more expensive merchandise, such as dishwashers or computers.
But these practices spelled certain doom for independent music shops, and even for places like Sam Goody, which sold nothing but music, and couldn’t compete with these extreme, below-list prices.
To combat this bastardization of music, the five major distributors introduced Minimum Advertised Pricing, or MAP, a program that set a minimum price for CDs.
If the suggested list price for a CD was $13.97, stores would be punished if they sold the album for less than $13.97. Distributors would revoke advertising support, like window displays, free promo posters and stickers, for 60 to 90 days for each violation of this rule by a retailer.
This policy effectively stopped the onslaught of the CD price decrease, and CD prices regained a bit more stability and equality.
While this price fixing may sound dreadful to many mainstream music consumers, it actually ensured fairness and leveled the playing field for local music stores struggling against powerful conglomerates.
Indie store owners breathed a collective sigh of relief.
In August of 2000, though, 28 states – including Iowa – sued the creators of MAP, claiming it was illegal. In response, distributors agreed to abandon MAP.
So once again, places like Wally World can sell CDs for ridiculously low prices, while places like Peeples, which has specialized in music for over 15 years, are slowly squeezed out of business.
Record stores sell records. They can’t afford to sell music as a “loss leader.” They don’t sell exercise equipment, washing machines or gas.
Again, the majority of Ames residents obviously don’t care about this. Why should they support independent stores when they can find their hot copy of “Now 6” for $12 at Wal-Mart?
What they don’t realize is that independent music outlets are essential in maintaining music as an art form, rather than an advertising tool for mass merchandisers.
Indie stores and labels take chances on artists mainstream stores won’t touch. Many of these “risks” eventually become hits. Stores like Peeples help break these artists onto the scene. They offer a treasure trove of new and different music you surely won’t find at Best Buy.
People like Charlie Chapman specialize in music, not exercise equipment or dishwashers. He might not be able to key you in to the pros and cons of buying a Kenmore over a Maytag, but he can tell you why “Hollywood Town Hall” is the best Jayhawks album (besides their first self-titled disc that’s out of print), and why The Strokes are just a “poor imitation” of the Velvet Underground.
His acquired music knowledge and insight is an asset to the Ames community, and it will be missed when Peeples closes.
Bethany Kohoutek is a junior in journalism and mass communications from Shueyville. She is the assistant arts and entertainment editor of the Daily.