Retail Track

SOME SUMMIT: The National Assn. of Recording Merchandisers (NARM) held a retail summit in Chicago Sept. 18-20 in an attempt to forge a dialogue with music manufacturers on how to work together to confront some of the problems facing the industry.

"The main agenda was to present the retail viewpoint on a few key industry issues and get a dialogue going on them with the supplier community," says Pam Horovitz, president of the Marlton, N.J.-based trade association. "We knew we wouldn't solve the issues, but we did think it was a useful way to identify common concerns and hopefully come up with [a] common solution to address those problems."

Among the issues discussed was the value proposition to the consumer, including looking at the singles configuration and technology and how the industry is dealing with CD burning, digital distribution, and copy management.

The meeting was put together by NARM on an invitation-only basis and included large retailers, wholesalers, the five majors, and some independent store owners and distributors. Billboard was not invited.

"The challenge of putting a meeting like this together is to find the right balance and breadth of companies and executives so that you have a robust conversation with diverse [points of view] but not a group so large that it becomes disfunctional and impossible to have dialogue," Horovitz says. "The good news is that we had a small enough group to produce a good opening dialogue. The challenge is how to extend that dialogue to all of the NARM company members that weren't there, and we haven't figured out how to do that yet."

Another component concerning who was there focused on which level of executives would be invited from the majors. Sources suggest that NARM and the retailers were hoping to expand the dialogue beyond the sales and distribution executives to upper label management. This year, Elektra Entertainment chairman/CEO Sylvia Rhone and Atlantic Group co-CEO/co-chairman Val Azzoli attended. Both received high marks from merchants for their participation.

Virgin Entertainment Group U.S. president Glen Ward says, "Both were very conversant on these issues, and what it demonstrated to me was that maybe there is a little bit less of a gap between labels and retail than we thought there was."

Overwhelmingly, those participants at the meeting that Billboard contacted said it was very positive and that there is a need to cooperate to work together to solve industry issues.

In discussing singles, retailers said that the labels appear willing to move forward in exploring whether the configuration can be saved. Ward made available the slide presentation on singles that he gave at NARM. One slide shows the correlation between singles sales and album sales and how album sales have declined as singles sales have become almost nonexistent. Universal Music & Video Distribution is already conducting a test on whether singles cannibalize album sales, as are some of the BMG labels. At the meeting, merchants reported that other majors said that they, too, would join in.

Ward said that the meeting was "a good start. Now it's all about the follow-up to get some actions going. Things are coming to a head for the industry, and this meeting prompted a healthy debate."



CHANGING UNIVERSE: Galaxy Music, the Pittsburgh-based one-stop, is starting a retail marketing company. Galaxy Music Promotions (GMP) will be run by George Balicky, VP at the company, as well as Tom Wilkerson and Tom Haughney, formerly with Hot Hits, based in Nashville. The company will position itself to work with record labels to promote releases. As part of that initiative, Galaxy will provide genre-specific CD compilations under the name Galaxy of Hot Hits on a six-week cycle, which will be distributed to secondary radio markets, radio professionals, clubs, DJs, and jukebox operators. Initial formats will include pop, rock, country, and urban. In addition, GMP has created a unique video-programming service that will provide music videos for on-site promotion of new product to consumers through Galaxy Music Distributors' independent retail accounts.

In a statement, Galaxy Music Distributors chairman/CEO Gene Jakiela said, "One-stop distributors need to work more closely with record labels in order to foster a climate that enhances demand for pre-recorded music."