Retailing records series; (part 9) A voyage down the Amazon.com

Fortunately, there are alternatives for those who cannot get to a record store besides Wal-Mart but don’t want the expurgated version of their music. The age of McLuhan has arrived, we live in a global village, and anywhere in the world you can find an internet connection, you can access one of the dozens of online record retailers and booksellers. Indeed, CDNow cofounder Jason Olim saw this need for an alternative as the main reason people would come to his online store.

“Breadth of selection,” he said of his store that sold a quarter of a million different items, “is the most important thing.” This wasn’t always an option. E-mail and usegroups and other internet (as opposed to web) functions had been available generally since 1969, when Compu-Serv (as it was called then) went into business; however not many people were even aware of it. Modems certainly were not standard equipment for the few people who had a home computer before the 1980s, and most people who had modems had them crawling along at about 300 band (in contrast, a modern home DSL line exchanges information at about a thousand times that rate).

The trend toward personal computers becoming truly personal had only slightly improved by 1998, when home computer penetration in the United States was a mere 42.1 percent, and of those a scant 26.2 percent had internet access. It took until 1993 and the advent of Mosaic (a forerunner of Netscape) to move the web out of the hands of solely the geekerati and into the realm of technological early adapters. Where previously navigating the web involved “knowing the code” of Universal Resource Locators (URLs), with the hypertext features Mosaic’s graphical interface added, new information was a mouse click away. Within a year, the number of web servers had risen from 500 to 10,000, and the number of netizens was doubling every few months.

It didn’t take long for businesses to smell money and start swarming around the web like sharks at a chumfest. By the end of 1994, you could tour Graceland, book airline tickets, and see clips from Fox television shows online. And, of course, buy CDs. In August 1994, 26-year-old twins Jason and Matthew Olim opened CDNow for business on the Internet. “CDNow was founded because of a disastrous search for some jazz albums after I first listened to Miles Davis,” said Jason Olim. “Unable to get good advice on how to introduce myself to the genre, I decided to build a music store that provided customers not only with discs, but also reviews, related band information, personalised e-mail recommendations, and Real Audio samples. I built CDNow to help people discover music.”

By December 1994, companies such as Geffen Records were linking their websites to CDNow. In addition to finding information about a record on a company’s website, visitors could now click a button that said, “I want to buy this now,” and open up a window to that record’s page on CDNow. By November 1995, 210,000 people were checking out the Olims’ site every month, bringing them monthly sales of about 8,000 CDs, monthly revenues of $325,000 and monthly profits of between $20,000 and $40,000.

Seeing that, New England retailer Newbury Comics set up its own “virtual storefront.” In another sector of the music business, former GRP Records owner Larry Rosen opened a virtual storefront called Music Boulevard. All this action had people predicting that the web would become a nexus of commerce, and soon the largest retailers would have to get online just to compete with upstarts. Music became the most popular item to purchase via the web. By 1998, CDNow stocked more than half a million different CD titles. Part of the reason for the popularity of buying music online was that you could actually hear the music on most of the sites.

While “fair use” proscriptions required that the clips be no longer than 30 seconds, a web surfer could listen to pretty much any song on any record CDNow and Music Boulevard sold. Beyond that, both sites (and all the others that followed) offered a vast amount of editorial content, including short artist profiles and reviews. Even at low bandwidth (at the time, most people surfing at home used a 28.8K baud dial-up modem) music streamed with acceptable enough fidelity that a listener knew the song to which he or she was listening. Music didn’t take up much bandwidth.