Independent music stores carve niche, find security

Recycled Records owner Paul Doege never set out to be king of the ring when he took over the small Reno store in December of 1980.

But after 26 years of doing business and watching countless competitors small independents such as himself as well as many large retailers become casualties of price-cutting and the onslaught of online music, Doege is just about the last one left standing.

Gone are the glory days of Reno-area music chain stores such as Tower Records, Sam Goody, and Wherehouse Records. Also purged from the scene are a handful of old-time stalwarts such as Soundwave CDs, Record Corral in Sparks, Mirabelli's Music City, and JJ's Ear Candy in Carson City.

The few music retailers still open in Reno are big-box discounters such as Best Buy, Circuit City, Target and Wal-Mart. Among independent retailers, survivors include Recycled, the newly opened Discology on California Avenue, and Sound and Fury Records on Wonder Street, a small co-op serving the punk scene.

They survive in a business that declined rapidly.

The Recording Industry Association of America says its members shipped more than 1.1 billion CDs, cassettes, singles, and the like in 1995. By 2005 that number fell below 750 million units shipped.

Meanwhile, from 2004 to 2005 the industry saw a 163 percent rise in downloads of digital singles, and an increase of almost 200 percent in downloads of digitized albums.

Doege and David Calkins, owner of Discology, say price slashing by big-box stores tolled the death knell for chain retailers such as Sam Goody, Tower and the Wherehouse as much or even more than did online downloads legal or otherwise.

"Say a new Mariah Carey album comes out," Doege says in his cluttered South Virginia Street office, where dozens of albums autographed by a host of musical legends adorn the walls. "They (the box stores) will sell it for $8.99 and take a loss on it hoping you will come in and buy a refrigerator, or a computer, or a dishwasher. Wherehouse, Tower, they sell it for $13.99 because that's all they have to make money on."

Says Calkins, whose store sells used music, "You cannot compete against Best Buy, Circuit City and Wal-Mart for pricing, but with used you can. That is a prime factor in the dissolution of those (other) stores."

Calkins, who previously spent years in management of retail music stores, opened his 675-square-foot store in November and is still increasing his inventory and stabilizing the flow of business.

Recycled Records opened near the corner of Wells and Broadway in October of 1978, and Doege relocated the store to its south Reno location in December of 1980. In 1998 he opened a second store in the 900 block of North Virginia Street, an operation that accounts for roughly 15 percent of his revenue.

Doege says two things keep Recycled's doors open.

"When it comes to the second-hand business, you've got to be able to wheel and deal and still make everybody feel good about it at the end," he says. "I can still compete on a price point with the box stores. My prices beat what they've got on new releases of CDs and DVDs."

Doege typically sells CDs for around $10. Buy any two and he'll knock off $2 and pay the sales tax. Although some customers may attach a stigma to the purchase of used music, Doege has a strong argument: It's only new once. Unwrap and play your new Fallout Boy CD and it, too, is used.

He's also got a large collection of so-called "dead media" 75,000-100,000 vinyl records, as well as CDs, tapes, VHS cassettes, reel-to-reel movies and even eight-tracks.

Sales of CDs and DVDs make up roughly 55-60 percent of his business, with all other forms of media comprising the rest. "We still sell quite a bit of records," he says. "There is nobody else selling them."

He worries, however, about the need to negotiate a new lease at the end of this year.

In 1980 his rent was $1,200 a month for 900 square feet; today he pays $5,600 for 3,000 square feet.

"I will stay in business, but I may downsize," he says. "I have a plan A and a plan B. I will not leave this location simply because I have been here 26 years."

Doege says he'll stay in business as long as the recording industry continues releasing hard copies of music - and with current trends that's no guarantee. Many of people over the age of 30 prefer old-school over iPod.

"There are generations out there, when they bought a CD or a record, it was a major purchase," Doege says. "Now music is no big deal. I am busy playing Halo, or Warcraft, and I can open up another window and download any song I like."