“Tower Records has filed for Chapter 11 bankruptcy protection from its creditors, its second such filing in less than three years,” The Associated press reports. “The company, which operates 89 stores in 20 states, sought bankruptcy protection Sunday to sell its assets through a court-supervised auction.”
“The company admits “intense” competition has hurt its business and that of other music retailers,” AP reports. “‘The brick-and-mortar specialty music retail industry has suffered substantial deterioration recently,’ Tower said in court papers… Phil Leigh, a senior analyst for Inside Digital Media Inc., said the Tower brand has value and will find a buyer, but its stores aren’t likely to survive this latest bankruptcy. ‘I think they’ll sell off the name and liquidate the inventory,’ Leigh said.”
AP reports, “Legal music download retailers like Apple Computer Inc.’s iTunes have played a major role in displacing traditional retailers. Nielsen SoundScan data, cited by Tower in bankruptcy-court filings, said legal digital downloads grew 200 percent in 2005 while album sales fell 7.8 percent.”
Full article here.
Related articles:
NPD: Apple’s iTunes Music Store now the 7th largest U.S. music retailer, up from 14th last year – November 21, 2005
“Legal music download retailers like Apple Computer Inc.’s iTunes have played a major role in displacing traditional retailers. Nielsen SoundScan data, cited by Tower in bankruptcy-court filings, said legal digital downloads grew 200 percent in 2005 while album sales fell 7.8 percent.”
Somehow I doubt that any other digital retailer </i>like,/i> Apple Computer Inc.’s iTunes played any kind of significant role in this scenario.
Uhhhh… like.
Damn tags…
Total Bummer!
I like having the option to download…butttt. There is value in having the actually hard item. I love actually owning the records and CD’s.
Who cares? I can’t believe they cancelled Stargate.
I stopped buying from them because their CD’s were always overpriced not because of iTunes. I could purchase from Newbury Comics for a heck of a lot less than the prices they maintained.
MORE BLOOD ON THE iPOD CLICK WHEEL!!
Tower Records down, now for Sam Goody!!!
Any fool in his right mind gets a computer and downloads songs ala cart instead of paying over $20 for a cd with a few good songs on it.
Heck even my friends ask me to buy and burn for them.
Hmmm… Sad. I blame the recording industry for keeping music CD prices up at $17 in spite of production costs dropping for years…
This has been inevitable for a while now. Tower has been closing many stores for years. Sigh. I created Tower’s first website back in the early-mid 90’s. And I used to shop there long before that. But I started buying CDs from CDNow.com and then Amazon.com starting almost that long ago, for reasons of both price and convenience.
Blaming Apple? Sounds like they are looking for someone else to blame for their own mismanagement.
The stand alone music store where customers have to drive up and get out of their cars just to look for music CD’s is long over. People don’t drive to a store just to buy a music CD. If you want to have a brick-and-mortar music business you HAVE to locate the stores in malls.
Apple stores would have never survived if they were stand-alone stores, and they ARE the type of store people will drive to.
Yes, Tower Records has some mall stores but too many are too big and too hard to get to.
Instead of retyping, I’d like to quote my reply to BustingTheSkullsOfidiots comment: “Digital music is going to kill CDs the same way that HTML killed books — that is to say, not at all.”
—————————————————
I say:
Listening to downloaded music is exactly the same as listening to CDs. The one exception is lower download sound quality, which is indistinguishable to most people. Soon we may have lossless which will change that. Since downloaded music can be burned to CD, downloaded music can be listened to in the exact same manner as a CD. Therefore, nothing else changes from CD to downloaded music except that it’s usually cheaper, I can buy it how I want and I can go get a song right now and have it in about a minute.
On the other hand, HTML and digital books require an entirely new way of viewing text. It is not handled in near the same manner as a physical book. Not to mention that many people claim reading digital media is more strain on the eyes than text on paper.
Just the same, HTML does not replace books – it is more likely to replace magazines, occupational journals, and newspapers, which it slowly is. More importantly, there has already been a decline in CD sales and iTunes has passed many CD retailers in sales.
Sam Goody is half dead already. Sister chain Suncoast has all but bit the dust.
Really, the day of the record store is over. iTMS is only one of the things killing it, and not even the most important one. Wal-Mart and Best Buy are the go-to places to get music and videos these days.
I’d be willing to bet that stores like Target, Best Buy, and Wal-Mart had more to do with Tower’s demise than iTMS. Tower was always ridiculously expensive. $19.99 for a single album? Why would I pay that when Target and Best Buy sell it for $12.99? Frankly I’m surprised they were able to stay afloat this long.
I’m saddened to hear this news. I have a good sized CD library, much of which was purchased at Tower Records over the course of many years. Yes, it was costly in the long run. But I did immensely enjoy the very real tactile intimacy of the shopping experience each and every time. There was nothing virtual about it. I’ll miss Tower. A chance to spend several hours shopping at Tower Records was a great reason for me to drive a hundred miles out of the mountains into the city every couple of months. And after shopping? There’s nothing quite so delightful as popping open a shimmering stack of exciting new records and pouring over the liner notes while savoring a wonderful meal at a neighboring deli. Yum and .. yum again.
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The blame? P2P, of course. It radically devalued the music product. That part is very discomforting to me.
It’s not iTunes, or WallMart or any other retailer that’s killing off the record stores like Tower-
It’s illegal downloads. Even many people I know that I consider smart with integrity often don’t see much wrong in downloading songs they didn’t pay for.
Everyone want to be paid for the work they do, but I guess if it’s musician’s and the music industry who cares!
“People don’t drive to a store just to buy a music CD.”
Hmm. I must be having some very vivid dreams. And they include a lot of other people, too.
Amazon and illegal P2P killed them, if anything…iTunes, although popular, is still just warming up compared to its potential… <evil grin>
Brick and mortar is dead… Digital is the present and the FUTURE.
I laugh at people who actually still display CD and DVD collections.. so arcahic.
Sad – but thats business guys!
Businesses these days have to continually diversify and innovate and adapt to market forces – if they don’t they end up like Tower Records, simple as that.
The next company that will go bankrupt will be Blockbuster Video – for exactly the same reason too…
Alot of companies are destined for this same fate within the next 10 years unless they evolve their business model. HMV will be one of those…
Blockbuster are in serious trouble because no one goes into a video store to rent videos/dvds these days. Blockbuster have no on-line movie store and they havent the money to compete in the movie download business, so basically they are fucked.
It’s just a matter of time.
When Apple launches it’s movie store expect a news item saying ‘Blockbuster files for bankrupsy’ on MDN.
Expect the next generation of video/dvd store to only be download ‘booths’, in which u just plug your ipod in, select the movie you want, swipe your credit card and download there and then onto your device.
The stores that are selling physical cds and dvds are dead.
Retail is in for one hell of a change – stores must adapt of will go under.
Nope, sorry Jeff – there will always be a market for being able to purchase music in a physical format (whether on a CD or flash module). Tower effectively priced themselved out business – and the Targets and the Wal-Marts helped – wasn’t the iTMS exclusively.
Aren’t you people listening? Did you see it but not read it? Did you read it but not believe it?
THEY C A N C E L L E D S T A R G A T E !
Oh well, guess it’s just you & me, Wally. (And I gotta go take another Xanax and try to get my breathing under control.)
Oh yeah… back on topic:
In a couple of years I probably would have gone to Tower Records to buy my Stargate SG1 Season 11 DVD Boxed Set but TR went bankrupt and… uhm.. THEY CANCELLED STARGATE.
Pant, pant, pant.
Magic Word: “Theory”. As in “THEY CANCELLED STARGATE!”
Ay Yi YI! That sucks!!!!!!!!!!!!!!!
Yes, while I appreciate iTMS, the sampling rate is TOO LOW! Of course, if all you listen to is derivative, predictable, disposable pop music, it doesn’t matter a bit…
BUT… I actually LOVE poking through bins of disks and adding more to my music library.
DO I NEED a 15th recording of Mahler’s “Das Lied von der Erde”? YES!
Yes, Tower prices their CDs from $2 to $6 per disk HIGHER than J&R in NYC, BUT their selection of Classical and World music disks is amazing. They get all kinds of obscure recording of obscure contemporary music that I KNOW I’ll NEVER find anywhere else… so I buy them, even at premium prices.
You can’t blame Tower, I blame the recording industry and their greedy pricing. When CDs first appeared at extremely high prices ($20 or more per disk!), the record companies promised that prices would drop after the cost of switching over to digital equipment was covered. Yeah, Right. It never happened and now they’re paying the price. Lost sales, piracy, etc.
I HOPE Tower manages to hang on!
I wonder if the Tower Records store on Sunset Blvd. in Hollywood would make a good location for an Apple Store. Hmmm… probably not enough foot traffic for Apple. Just a bunch of tourists driving through.
MacBill, I think Dell has their eye’s on that one already.
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