“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
iTunes and the rise of digital music may have accelerated the demise of Tower, but Tower’s descent into oblivion was due entirely to their poor business practices.
Also, I did not post the comment 12:26 22 Aug. Some goof poached my nom de plume.
that’s too bad. i used to buy cds there in the late 90’s. haven’t bought a single one for almost 5 years now. no wonder they’re going out of business! CURSE TECHNOLOGY mauhahahahahahhahahhah
That’s a shame…. NOT.
Their selection sucked and their prices were worse. Good riddance to bad rubbish.
Besides, Amazon has more to do with Tower going belly up than iTunes.
I refuse to pay $10 just to park my perfect automobile in a car-hole lot for the privilige of being ripped off for a $20 CD that costs 15 cents to manufacture.
What part of ‘stupid’ does Tower not understand? Downloading, legal or otherwise, has nothing to do with it.
I’ve said it before, and I’m sure all of you agree…CD’s will go the way of the cassette and LP. Digital forms will move into the space (Mp3’s, etc…) which eventually will be replaced by the next big idea. All brick and mortar music stores will have to convert or die out. We’re starting to see Blue Ray invading DVD space…
Ahh the power of American consumerism.
The good news is…each new version of the ‘biggest thing’ does keep on getting better, no?
Nick: Production/distribution costs are insignificant. What kills the labels is promotion costs. It costs ~ $750K to promote a single nation wide. A record label is not going to spend that kind of money on any little artist.
They should probably consider renaming their brand to Cellar Records. Or at least Leaning Tower Records.
Whatever the name of that awful sci-fie submarine TV show was, with Roy Scheider and that talking porpoise, had an episode in which some character said something to the effect of “I haven’t heard them since they stopped making CDs.” The show was on the air the first time when CDs were still competing with LPs.
It was the only line in that series turkey that was even half prescient, but I remember thinking I should remember it for the day it happens. Alas, I can’t remember the name of the show. LOL.
VCP: “SeaQuest DSV”
Yeah, charging $19 for a shiny, plastic disc had nothing to do with it. We should blame digital downloads and piracy. Yeah, that’s a good idea.
Eejits.
Oh, yeah. Thanks.
This is Blood on iTunes, not Blood on iPod Click Wheel. Get it straight.
I listen to iTunes a lot and still don’t own an iPod, and there are many users who don’t. iTunes is the best app for listening to music. Period. Whether or not you decide to take your music on the road is irrelevant to the article.
If Tower closes, at least there will be fewer people getting their tongues pierced, as they won’t have anyplace to work.