Amoeba Music Survives the Turmoil

Discussion
Oct 04, 2010

By Tom Ryan

With a focus on supporting independent music and its broad selections,
California’s Amoeba Music has managed to steer through the upheaval in the
music industry that has led to the demise of competitors such as Virgin Megastores,
Tower Records and Sam Goody.

4According to a profile in The Los Angeles Times, Amoeba Music is the
world’s largest independent record retailer, with close to one million albums
in three California locations — Hollywood, Berkeley and San Francisco.
The first store opened in Berkeley in 1990, the second in San Francisco’s Haight-Ashbury
district in 1995 and a third in Hollywood in 2001. Rolling Stone magazine
in September named it among the nation’s 25 best record stores, calling it "simply
the most thorough and welcoming place a record lover could hope to shop."

While
CD sales have been free falling in recent years with the ongoing shift to digital
for most of the industry, sales for Amoeba Music are more manageably down 10
percent to about $45 million this year from $50 million at the stores’ peak
a couple of years ago. Much of the decline is at the Berkeley store, where
students are more likely to steal downloads online. The L.A. store, its biggest,
has seen no decline.

The article stated that one reason it has survived is the independent
culture it has kept since opening its first store in Berkeley in 1990.

"When most of the chain stores moved into video displays that marketed
the latest hits, we’ve been adamant that independent artists have equal standing
next to major-label artists," Marc Weinstein, co-founder and co-owner,
told the LA Times. "We don’t put up major label displays on the
wall. We don’t sell shelf space. Never have. Our customers know that."

Another
reason is its curated stock. While other record stores featured top-40 albums
and a small back catalog, Amoeba Music’s buyers have remained committed to
searching estate sales and buying used records.

Finally,
its vinyl selection is helping make up for the decline in CD sales. The Hollywood
store sells about 1,000 vinyl records a day. Demand is strong for vinyl from
jazz collectors, DJs and even younger heavy-metal fans.

"Many of them are 18 or younger," Mr. Weinstein said. "It’s
a very artifact-oriented crowd that’s attracted to how these things looked
and felt."

Discussion Question:  Does Amoeba Music’s experience hold lessons for other
retailers?

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6 Comments on "Amoeba Music Survives the Turmoil"

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Bill Emerson
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Bill Emerson
7 years 2 months ago

The obvious lesson here is that there is still opportunity to be found as technology raises customers’ expectations become more and more specific and less mass-oriented. By embracing a “pull” approach of 1) understanding a smaller niche customer base and then 2) rigorously finding the product(s) this customer is looking for, you can still enjoy success, albeit on a limited scale. This is the analog for the return of the local bookstore as B&N and Borders struggle.

In other words, the potential return of the independent retailer.

Ed Rosenbaum
Guest
7 years 2 months ago

One thing that really stood out from this article is the average age of their customers is 18. I would have thought the average age to be much higher.

It also shows the value of location selection. They were astute or lucky enough to know who their customer was going to be. They built there, and then the customers came. Amazing, isn’t it?

Ryan Mathews
Guest
7 years 2 months ago

The lesson is that it’s good to have history and perfect demographics on your side. Amoeba’s success isn’t scalable, but it is a great stalking horse for what drives change in the independent music business.

Kai Clarke
Guest
7 years 2 months ago

Amoeba is a niche, specialty store. They have a very strong, and good business model. However, it is not a good comparison to compare 3 stores in California with National Chains that sell mass appeal product on a nationwide basis. These are 2 different models, in different distribution sectors with different target markets. Their products are different and their models are different.

Any time there is a boutique marketing model, it must be compared to similar boutique marketing competitors, not mass merchandised national models.

Lee Peterson
Guest
7 years 2 months ago
The key to their survival and as a matter of fact, a good lesson coming up for all retailers, is to pick a lane, and go deep. In other words, for them just to have Jimmy Eat World CDs would be suicide. Customers can buy those today in a thousand different ways and never leaver the couch. But for them to have un-released Jimmy singles, the vinyl, limited edition t-shirts, autographed skate boards, posters…you know, interesting, hard to find items…well, then they’d be in business! The key to the lesson is two fold: picking the right lane, then going deep.… Read more »
George Whalin
Guest
George Whalin
7 years 2 months ago
With three stores, Amoeba Music is part of a dieing breed of independent music stores as is Tower Records in Sacramento, California and Waterloo Records in Austin, Texas. Unfortunately, both the world and the music business has changed, making it virtually impossible for Amoeba and others like them to become big chains. Having been an Amoeba customer a number of times in LA, it’s easy to see why customers find music they can’t find elsewhere since the racks are jammed with independent bands and labels. The independent music scene is alive and well in Southern California and these musicians need… Read more »
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