Internet Sales, Box Stores Fend Off Record Shops

By Beacon Staff

A year ago Gary Diegel closed up Sunshine CDs in the Kalispell Center Mall, marking not only the end of the shop’s 24-year run but also the vanishing of a once proud Main Street cornerstone in the Flathead Valley: the independent record shop. Diegel doesn’t have much faith in seeing another independent music store in the Flathead, as much he would like to. His bleak outlook is based on the Flathead’s changing culture and the music industry’s changing priorities.

“It’s a sad day for the music industry,” he said. “We were victims of the times. I’m glad I was a part of it, but I wish it could continue.”

The record industry’s troubles are clear, with a recent Rolling Stone article stating that almost 40 percent of record stores nationwide have closed since 2003. Despite the industry’s problems, though, towns throughout Montana have protected their record shops. Missoula has Rockin’ Rudy’s and Ear Candy Music. Bozeman has Cactus Records. Smaller communities like Livingston and Dillon have shops downtown. But the Flathead has none.

No one can fault Diegel. He kept the Flathead’s last record shop open as long as he could, even enduring three consecutive years of significant financial losses. Finally he conceded, reluctantly, to this age of iPods and Wal-Marts.

“I went out with a whimper,” he said. “That’s not how I wanted to go out. I wanted to go out with a bang.”

Operating a local music store was never easy in the Flathead, even in the peak years of the 1980s and early 1990s, Diegel said. It requires working seven days a week, enduring minimal profit margins and at times losing money. Or, as Diegel said, “You have to have the love for it; you’re really married to it.”

Toward the end of his run, Diegel was buying CDs for $12.50 and then selling them for at least $15 just to make a few bucks. Box stores can afford to sell CDs for $9.99 and lose money, he said, with the knowledge that they will make money elsewhere. Still, Diegel’s shop survived alongside Kmart and Wal-Mart, but when commercial development along U.S. 93 in north Kalispell really took off, it was too much. “Everybody took a little from us,” Diegel said.

All independent storeowners face difficulties. In small towns, it’s lack of customer base. In larger towns, it’s box stores. In any size town, it’s the Internet. Diegel said the only way a record shop can survive today is to diversify: offer clothing, novelty items, music accessories, instruments, kitchenware or whatever. It can’t be solely about the album anymore. Cactus Records, Rockin’ Rudy’s and Ear Candy Music all offer something more than music. If Cactus hadn’t diversified, owner Mike Good said it would have died.

“It’s been an incredible struggle since Borders and Barnes and Noble moved in,” Good said.

Calling the Internet “the biggest culprit,” Diegel said even without box store competition, people go to the Web for music. Good explained that, besides the obvious effect the Internet has on overall album sales, the Web intruded upon one of the main advantages independents used to have over chains: obscure music. Some small-time artists don’t even sign with a label now, opting to go straight to the Web. But the Web can be a voiceless free market, while a record store remains a place of conversation, recommendations and advice. Record shops still hold an advantage in that regard, Good said.

“I’ve personally selected every title that comes in here, except for special orders,” Good said. “I have a relationship with my customers where I know what they want and what their obscure tastes are.”

Montanans cherish that “business is personal” small town approach, Diegel said. Kalispell, however, is in a unique position. It isn’t big enough to support an independent music shop by sheer numbers, yet it no longer has a small town attitude, Diegel said. It’s stuck in the middle, which creates a hard market for a record shop. Whitefish and Bigfork, which have both had shops in the past, are better markets for an independent now, Diegel said. On top of all the obstacles potential music storeowners face, the Flathead lacks one major driving factor that independents in Bozeman and Missoula have: universities.

Record shops offer a mystique not found in big box stores, Good said. They have always been intriguing, sometimes contradictory, melting pots for small towns. They are deeply engrained into a small town’s culture, but they also serve as a primary meeting spot for the counterculture. “A record store is much more than a record store,” Good said. “It’s a cultural experience. You go for that whole experience in addition to the music. You don’t get that at Barnes and Noble.”

There’s also the appeal of the CD itself.

“I loved to read the words on the album cover,” Diegel said, “see who was in the band. The lyrics. I loved the whole package. Today with the iPod, people don’t even have a clue what the album cover looks like.”

Ear Candy co-owner John Fleming says if someone opens up a shop in the Flathead, the shop needs to develop its own persona and fulfill a niche market. His store offers obscure titles, eclectic vinyl selections and glass-blown products. Adapting to modern times helps too. Fleming has improved his Web site and utilizes eBay.

“You definitely have to offer something else,” Fleming said, “unless you’re willing to do it entirely by yourself and not hire anybody. What will they offer in the Flathead?”