Bye, fidelity

Why would anyone want to open a record store in 2010?

That’s an easy question for Dal Basi and Nicholas Lujan, co-owners of newly opened Phono Select, to answer. Last month, the two transformed a modest one-story showroom near 23rd and K streets in Midtown into a mecca for music geeks. Kitschy items such as a spatula-shaped like a guitar decorate the shop, which is stocked with limited-edition 7-inch singles and vinyl albums from beloved indie labels like Stones Throw and Slumberland records, in addition to other music formats. Several days ago, Phono Select even hosted an in-store concert with old-school power-pop band Paul Collins’ Beat.

Basi and Lujan still believe in the record-store experience in a year that was not a banner one for music shops. Even Tower Records founder Russ Solomon finally retired this past summer, selling R5 Records on Broadway to local chain Dimple. Meanwhile, retail sales continued to plummet as unauthorized downloads cannibalized the business, causing the industry’s bread and butter, CD sales, to plummet 20 percent last year alone.

In Sacramento, music album sales tumbled 15 percent between 2008 and 2009, according to Nielsen SoundScan.

This year’s numbers aren’t stronger. Album sales in Sacramento are less than half of what they were two years ago, totaling more than 2.3 million, as compared to nearly 5 million in 2008, according to Nielsen SoundScan. Digital-track sales also are down, at some 9.8 million, although three months remain to make it to 2009’s total of 13.7 million digital tracks sold.

Still, Phono Select opened its doors on September 18, and two owners are buoyed with giddy enthusiasm over their lovingly assembled collection. “It’s a cultural thing,” Basi said. “It’s like people who eat fast food all day: They miss out. You gotta eat at restaurants. That’s how I treat music.”

They modeled Phono Select as an indie boutique, with custom-made glass cases and wood shelving made by friends and family, and freshly painted murals by local artists such as Shaun Burner and Rels on the outdoor walls. Despite the variety of personal touches, it’s strikingly clean and organized, too, a contrast from the dusty-crates atmosphere long associated with record hunting. “I wanted a place where you could spend an hour, and it wouldn’t be smelly, dirty, filthy,” Basi said.

Sacramento music-retail outlets such as The Beat and Dimple Records are clean, too (though used vinyl spots such as Records on Broadway can get kind of messy). And there lies the question: With so many local competitors, how much of the industry’s shrinking pie can Sacramento’s record stores divide?

Robert Fauble knows how much the market has changed since he first opened Midtown record store The Beat in 1982. For years, The Beat was the only place in town to purchase vinyl imports of hot U.K. bands such as Florence and the Machine, as well as dozens of rows of classic jazz, rock and soul albums. But it hasn’t been immune to the industry’s recent woes.

“All stores through the nation are selling about 50 percent less than they were three years ago, and we feel that, too,” Fauble said. “Where is the bottom? When are sales going to [stop declining and] stabilize?”

Coupled with a persistent recession economy, he has had to lay off one or two staff members in recent months. And to save money, he may relocate The Beat to a smaller space when its current lease expires in two-and-a-half years.

“I still love music,” he said. “But like anything else, after 28 years, it becomes a business with a lot of headaches.”

But Fauble sees a silver lining: Big-box behemoths such as Best Buy and Target have responded to declining CD sales by reducing music-dedicated floor space, opening the door for area independent retailers like Dimple, Phono Select, The Beat and Armadillo Music in Davis. And he thinks that, despite decreasing demand, people will still want physical music products. “Why throw in the towel when [big-box stores] are ready to throw in the towel?” he asked.

Although all three carry new and used music, Dimple, The Beat and Phono Select differ in obvious ways. Dimple augments its new and used CDs and vinyl with video games and DVDs. The Beat has begun selling DVDs, too, but for the most part it’s a traditional, general-interest record store with new releases and deep catalog.

Then there are subtle differences: Fauble admits that The Beat doesn’t have much of an online presence. “We’re not into the technology part,” he said.

Dimple, however, has an extensive online store where customers can buy the latest hits. And, for its part, Phono Select has a modest blog reflective of its indie spirit, with regular updates on store happenings and goofy photos of Lujan, Basi and friends—including one shot of Basi and his former boss, Tower founder Solomon.

Ironically, despite their avowed commitment to a retail experience, all three stores cushion their brick-and-mortar business by selling items on sites like eBay, Amazon.com, and Discogs. Fauble estimates that 10 to 15 percent of The Beat’s sales come from orders placed through those sites.

For now, local music-retail survivors believe they can co-exist. Although the Beat and Phono Select lie within a few blocks of each other, neither Fauble nor Basi and Lujan seem particularly worried about potential conflict over customers—at least at the moment.

“I think the model you’re going to see more and more is smaller-footprint stores with a nice, strong interesting mix of music upfront,” Fauble said—perhaps a tacit acknowledgment of Phono Select—“and then a strong online presence in the backroom.” He remains bullish, however, on the brick-and-mortar experience: Besides serving as community bases for music fans, record stores offer the sensation of finding the perfect beat, holding a record in your hands and admiring the artwork, and then triumphantly making your purchase at the cash register. It’s an experience that Amazon.com can never duplicate.

“Some of our most appreciative customers are from out of town,” said Fauble. “Or people that come to the city on business from out of state, [because] they don’t have this at home. …

“You’re not going to find this type of record store in many parts of the U.S. any longer.”