Monday, August 21, 2006
Tower Collapse a Warning
Tower Records has been under bankruptcy protection for two years, and the company is now looking for a buyer to prevent liquidation.
That one of the key franchises in retail music went kablooey shows how quickly industries can move online, and is a warning to others who do not keep up with changes in technologies that effect consumer demand.
While music piracy undoubtedly contributed to Tower's demise, the shift to buying tracks or full CDs online was the primary impetus. Perhaps there was no miracle strategy that could have kept Tower strong since they were at the mercy of the record companies in trying to develop an online distribution strategy. Once the delivery infrastructure was in place that enabled people to sample and buy online, it would only be a matter of time before retailers got whacked.
Companies such as Blockbuster have been aggressive in their online strategies, but once IP broadband and video on demand services become commonplace, the DVD rental stores are in for a similar rough ride. As much as old media may want the status quo to continue, new enabling technologies that satisfy consumers can topple the established methods.
The same can be said for advertising agencies who continue to focus solely on print or broadcast or in the "old" CPM models. Personalization and contextual advertising are just the beginning of the road towards 1 to 1 advertising. Those who expect things to stay the same may meet a similar fate to Tower Records.
By John Gartner at 12:22 PM
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(5) Thoughts on Tower Collapse a Warning
Tower has not remainted under bankruptcy protection - its previous "bankruptcy" was literally the quickest in business history.
Comments by towergal : Monday, August 21, 2006 at 01:41 PM
Tower Records has NOT been under Chatper 11 protection for two years. Two years ago they went into CHapter 11 for about 30 days.
Please research before printing.
Comments by Dara : Monday, August 21, 2006 at 03:48 PM
If someone is going to buy this company, they better do it quick. Tower's CEO made the comment that they're trying to do it quickly so that the buyer can take advantage of the Christmas season.
The value of the company will drop huge after this holiday season, as disk sales are going continue dropping. If no one buys it before Christmas, the value of the company will drop tremendously.
Comments by Gary Bourgeault : Monday, August 21, 2006 at 07:22 PM
The article states, "While music piracy undoubtedly contributed to Tower's demise..." This is a pretty strong and somewhat uninformed statement.
There have been several studies that show that piracy has not led to a slowdown in music sales. At best, the data out there is inconclusive.
What more likely led to Tower's demise was very bad management and a failure to provide a product/service that the public wants! I buy a hundred or so CDs a year. Why would I pay $16 to $18 per CD at Tower when I can get the same CD for $7 or $8 (used) on Amazon?
I stop off at the Tower Records in NYC from time to time. There is almost never any help, most of the registers are closed, the restrooms are either always broken or dirty, and the cafe looks like it wouldn't be able to pass a health department inspection.
Again, Tower's problems are a result of very bad management!
Comments by Jazz Fan : Tuesday, August 22, 2006 at 08:27 AM
tower deserved what it got, allowing the owners incompetent son to run things put the nail in that coffin, what a loser
Comments by wizard of odds : Monday, March 22, 2010 at 12:55 AM
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