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Tower Records defiant in face of CD slump

by Jun Hongo

Staff Writer

Declining sales of CDs over the past decade may indicate a grim future for music shops, but Ikuo Minewaki believes there is still a place for brick and mortar retail outlets.

“CDs are no longer items that you can leave on the store shelf and expect customers to purchase,” Minewaki, CEO of Tower Records Japan Inc., said in a speech Friday in Tokyo at the Foreign Correspondents’ Club of Japan.

Retail music chains “need to do what Amazon and other online retailers can’t” to compete with them, he said.

Tower Records opened its first store in the 1960s in California but closed all of retail stores in the United States in 2006 and went bankrupt as digital sales continued to trim the CD market.

Tower Records Japan, however, is independent from the U.S. chain and continues business today in 86 locations across the country.

The industry’s salad days are long gone, but Tower Records Japan managed to ring up sales of ¥55.5 billion in fiscal 2012.

Whereas Tower Records in the U.S. tried and failed to compete with mega retailers like Wal-Mart, Minewaki said that taking a different approach helped his company.

“For example, we spent a billion yen to renew our Shibuya store. We hold 700 events every year there,” he said, adding that the number of customers grew 130 percent from the previous year due to the renovation.

It is “crucial that we provide added value” to CDs, Minewaki said.

Taking an innovative approach came natural for the CEO, who was never just another brick in the wall. He joined the company and worked in a number of the chain’s stores for more than 20 years before being named to the executive position. He is also a true fan of music and supports musicians through independent labels that Tower Records created.

“I believe that music fans will continue to gather at stores that are managed by music fans,” Minewaki said of the importance of his own affection for music.

  • http://getironic.blogspot.com/ getironic

    Japan has the highest prices for music CD’s out of anywhere in the world. Small wonder.

    You want to do more business and compete with online retailers and content? Then abolish saihan seido. Otherwise shut up and don’t complain as you slowly fall into bankruptcy — because it’s exactly what price fixers deserve.

  • Ken Hatley

    Brilliant, my hat is off to you !!!. You are doing what the Record Industry over here used to do !!

    Great work and we will be hitting you with one of Japan’s favorite all time Funk superstars on a new CD, Funk Road. The group was The members of The Parliaments, Funkadelics and P-Funk. Grand Master of Funk, World Renowned and Hall Of Fame, Multi Grammy winning, .. Drummer Jerome “BigFoot” Brailey, incited Mutiny when George Clinton was not paying he and the other members correctly.

    The partners stormed the ship, (as in Mothership) and thus came MUTINY. The new CD is titled ‘FUNK ROAD” and Funk Road is Kicking, Guaranteed to get the people on the floor and into the stores. Watch out , Funk Road will be the expressway to FUNK, coming soon to you. The single, “PROMENADE” will be released for Digital August 1,2013. The CD FUNK ROAD, will be released September 3, 2013. Watch out, every song is a mover, and the quality is impeccable with such great musicians and artists. When you hear him kick that funk in on those drums, he makes a Statement, killer clean licks, it is easy to hear why he is rated 21 of the World’s Top 100 Drummers of All Time. You will also understand why Jerome “Bigfoot” Brailey is the most sampled drummer in the world., and on many hit records. We look forward to seeing you in Japan, and in Tower REcords, we will be doing in store appearances with giveaways, autograph sessions, and photo sessions, and live performances !!~ See you then !! Keep your ears open, Keep the floors, slick and the Funk moving. Exciting, Thrilling, spectacular, and moving !!