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shove in the years 1990 91. Rather than fade away, records were removed from record stores. Almost
overnight, CDs replaced LPs and vinyl albums were relegated to back shelves, cutout bins, and bargain
basements.
The major record retail chains Tower, Camelot, Sam Goody, Coconuts took a proactive
approach. Sensing the shift, they chose to anticipate customers changing preferences rather than play
catch-up after the fact. In 1987, a small and ambitious reissue label, Rhino Records, born in the back
room of a store in West Los Angeles, launched an unsuccessful campaign to save the LP. Four years
later, Rhino had no vinyl releases scheduled. The problem with LPs is we couldn t make any money
selling them, said Harold Bronson, Rhino s managing director. By late 1990, most of the
aforementioned chains either had dropped or severely reduced the availability of vinyl. Mom-and-pop
specialty stores soon became the only well-stocked vinyl outlets. Nobody is buying them, declared
Russ Solomon, president of Tower Records. So why sell them?
That wasn t a problem with CDs, at least not for record companies. New CDs sold for $15 or $16
compared to $9 or $10 for LPs. Even as the manufacturing costs of CDs equaled and eventually fell
below the cost of making records, their retail price stayed the same. Overall growth slowed in the
music business during the early nineties, but profits were high because CDs cost more. The reissue
phenomenon further fueled this prosperity; catalogue sales blossomed as consumers replaced their
scratched-up vinyl collections with crisp, clean CD reissues. Eventually, this bear market had to fade;
as the boxed-set memorials multiplied, record company vaults were plundered. Ironically, Rhino
Records once denigrated as a novelty-obsessed oldies label cleaned up on this trend by licensing
catalogue rights from major labels and releasing a seemingly endless stream of retrospectives and
compilations. Yet the reissue boom created a backlash in a sizable group of wary, cynical consumers
who were in no hurry to replace their permanent CD collections with yet another generation of
software. The latest format war ended in short-term victory for the music business, but companies
paid a long-term price for their profits.
From the start, retailers questioned the new arrangement. In the LP to CD shuffle of product, the
feeling was plain: record stores were getting screwed. There were a few lone cries in the wilderness
that went largely unheeded. One such clarion came from the very top of the chain. Investor Stanley P.
Gold, whose Shamrock Holdings company owned the Music Plus chain and other record stores at the
time, administered a bracing wake-up call in 1990. Addressing a music-biz convention, Gold chided a
roomful of major record company executives by branding them an oligarchy that willfully inflated
prices. Quite reasonably, Gold suggested lowering the wholesale price on CDs from roughly $10 to $7.
The record industry consortium disputed his numbers, but Gold insisted that the cost of manufacturing
a CD had dropped from $2.50 to $1.25.
Sporadic grass-roots resistance flared. For a few months in 1990, the owner of a Virginia record
store named David Campbell defied the high price of CDs. He contended that record companies could
sell three times as many CDs at a price comparable to prerecorded cassettes. Campbell s noble and
dramatic gesture made a point but didn t leave a lasting mark. This brave soul became the Don
Quixote of the CD pricing scandal, an unlikely hero tilting at a hightech windmill.
In 1989, Campbell bought a 30,000 CD inventory for his store, The Music Man, in a Norfolk
shopping mall. They just sat there, he told Newsweek. It nearly put me out of business. So
Campbell lowered his front line CD prices to $11.98 (from the usual $15.98 or $16.98). Campbell
claimed that his monthly sales more than tripled rising from $19,500 to $70,000. Of course, his
margin was so low that he lost money and eventually had to raise prices again but not before he took
out a full-page advertisement in Billboard in 1990, challenging the music industry to follow his lead
and cut prices. The national media jumped on Campbell s story, but the record companies patiently
waited for him to come around, along with everybody else. Campbell s experience wasn t unique, but
this particular grass-roots rebellion never got off the ground. Records were disappearing. Forget
availability; compact discs achieved inevitability. CDs surely won the format war against LPs, but it
was a victory achieved through a cunning stealth campaign.
Obviously, popular music also changed in ways that accelerated the CD revolution. The divisive
effects of disco had split the world into self-sufficient, mutually exclusive spheres by the 1980s.
Fragmentation became the buzzword, as every style, subgenre, and splinter group had its own support
system. MTV and music videos overshadowed radio and hit singles, making television the means of
dissemination for each new generation of fans. MTV s initial reluctance to broadcast videos by black
artists the last gasp of FM radio s disco sucks backlash sparked a controversy in the early
eighties. That fire had to be cooled by the network, because CBS threatened to pull all its videos if the
door didn t open and the rest is history. Michael Jackson waltzed on through, pointing the way back
to a color-blind crossover (in pop music, anyway). Ten years later, middle America was conquered by
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