The end of Rounder Records could be the beginning of the end for all of us or maybe not ?

A customer who had read an interview with Phil Barton, the owner of Rounder, asked me the not unreasonable question as to why if he had been losing money for the last 4 or 5 years had he carried on so long. I don’t know Phil very well but we worked together on the Coalition (a collection of the bigger independent record shops) and he is clearly a smart businessman who loves music. He bought and did his best to save iconic shop Selectadisc in Nottingham finally giving in to the inevitable in 2009. After  Sister Ray, his London shop, went into administration in 2008 he did the unheard of and instead of running away from his debts and reinventing himself as Sister Ray 2 he took it out of administration and thankfully is still trading there today. So when he says he’s kept Rounder going all these years he clearly had a plan.  

Now Phil’s motives are his own but I do know the history of these last 5 years well as somebody who headed up the Coalition at the start. EMI paid all the independents to meet up once a year and at the meeting in November 2006 the idea that shops should work together in some way was first mooted. It took a while to take things any further but after a meeting in Leeds of many of the UK’s leading independent record shops an agreement was reached and the Coalition was announced to coincide with the very first Record Store Day in 2008.  http://www.list.co.uk/article/7652-indie-record-stores-unite/ 

The immediate benefits became clear as with only a mater of weeks to organise things (it was actually Sandy in our old Glasgow shop who first spotted what was happening in the US) we were able to coordinate in-stores and some media attention. Amazingly in the first year there was no product at all ! As the first head of the Coalition I got to meet Kim Bayley who had the fancy title of Director General of ERA  (Entertainment Retail Association) and Alison Wenham the CEO of AIM. ERA had been founded by record dealers as BARD but had since become an all encompassing organisation including supermarkets, computer game sellers, online sellers such as Amazon and download sites. Kim however undoubtedly wanted to do all she could to help. Alison in our first meeting looked at me clearly genuinely worried and asked “is it too late ?” I was invited down to speak to all the labels at a later date to explain the concerns shops now had. Unfortunately I failed to mention that not stealing our customers might be a great help indeed.  

One thing everybody agreed on be they record companies, distributors or labels and that was that in the “new marketplace” in which offshore set ups were avoiding VAT and other online sellers were setting up with very low overheads compared to high street shops those shops had to be given better terms to acknowledge their unique position. Amazon and guys operating from living rooms and lock ups weren’t going to break The Fleet Foxes ! ERA’s position was always difficult as they represented both the shops and Amazon. Surely though we could rely on the labels. It was the shops that had built up the fan bases for many bands and the support for labels from 4AD to Domino. In the early days we even handed over email addresses of fans so labels and bands could let fans know when releases would be in the shops. Innocent days !

However as some labels started to struggle and others just got greedy they realised they could divert those very fans away from shops and onto their lovely new websites. It was a trickle at first when a customer would say they had bought directly from the label but soon it became a major problem for shops and I remember it well when in 2009 we had sold none of the Muse box set in the first 5 days only to be told that Friday afternoon by a customer he had bought it from the band to get the version with the 5.1 surround sound DVD.  

Surely though shops would be getting far better prices to compensate them for the time they spent promoting bands and those high overheads. Well sometimes yes but mainly no. Amazon would be regularly two pounds cheaper just because of the VAT avoidance but other UK based online sellers seemed to be selling at prices that a shop would consider close to their cost. Some would admit that shops got maybe an extra couple of per cent which of course made little difference but others still maintained shops were getting far better prices.  Occasionally however a list would accidentally be sent out with all the recipients listed and it was clear that was not the case. Of course now there is no such pretence and even an “indies only” exclusive includes those selling online and the labels themselves so it does nothing to get people into shops. As for Record Store Day ………… another time !

So with ERA slapping Amazon’s wrists “behind closed doors” but nothing actually being done, the labels deciding to direct their bands’ fans away from shops and towards their websites and with some honourable exceptions shops being charged the same as everybody else it looked like it couldn’t get any worse. It did.

There had always been launches for albums but they were normally in the week of release to maximise sales in the shops. Now launches or even tours started happening before the release date with the release being on sale. And it wasn’t just small bands on small labels. In 2010 we put the slow sales of The Fall’s Domino album down to the previous Friday’s gig when Mark E. Smith had walked off but no actually many of our customers had bought the album at the gig.

All the time shops would be told that we just needed to hang on in there. The latest reason was the imminent demise of HMV which would indeed have been a game changer and would have no doubt brought extra business to shops but at the expense of the whole infrastructure. As it happened the record companies lost their bottle and bailed HMV out giving them terms the independents could only dream of.  

When The Coalition first started it was done so on the basis that in four or five years time it wouldn’t matter if some of us survived if there weren’t enough of us. We knew things would get harder though I don’t think any of us saw the way things would go with the labels and bands. Most of us were still doing alright and recognised that if we were to get out now was the time. Reveal Records of Derby had taken that very step in 2007 sensibly declaring it would only get worse from there on. 

I still believe it doesn’t have to be this way. Give independents more time to sell both new releases and back catalogue. Genuinely encourage fans to go to record shops regularly not just on Record Store Day. Then you will start to see a difference. The VAT loophole has been closed but really that was way too late. Online shopping is not now just about price. Downloading is a choice and shops accept that. Physical product and for independents in particular vinyl still has a place for some time to come if promoted properly. Customers too need to be reminded that all that customer service and knowledge they glean from a shop has a value too. To take advantage of that but then buy online adds to a shop’s costs and at the same time reduces their income. Bands need to remember that support given to them at the start of their careers should not be rewarded by taking sales from shops as they become bigger.

It will be no consolation to Phil and the excellent staff of Rounder but if their closing is the final straw for record companies and labels and they realise that things can’t go on as they are then some good will have come from it. Avalanche’s position is in some ways worse than most facing competition from both HMV and FOPP while in another way the Avalanche brand as it seems to have become of late is closely identified with Scottish music and that opens other doors.

As I’ve said the meetings I had (some of which were with labels) were mostly positive. I certainly hope to work closely with labels in the future as we will announce soon. However realistically there is a window of opportunity I have to take advantage of over the next five to six weeks and in that very short time scale things will need to be considerably different by the end.  

While The Coalition no longer exists as a functioning body the shops to this day still keep in touch in a way that was unheard of before so it did serve a purpose. In that way losing Rounder is losing one of our own.