Standing in the Shadow of iTunes

Three upstart local online music stores aim for their own niche markets

While the major record companies slept and moaned over file-sharing services, Steve Jobs gave the world iTunes and the iPod. It was a simple business model: 99 cents a song. And just look at the sleek little doohickey you get to play them on! The white wires streaming out of your ears on the subway say you're modern, connected to a digital world brought to you by Apple, a company always ahead of the technology curve. And hardly evil, like Microsoft.

But like Microsoft's Windows operating system, iTunes has created its own monopoly in the recording industry. It's not much different from the big-box stores like Virgin and Tower Records: More money gets your release more visibility. With the cost- cutting technology of the Internet, it might be easier than ever to start your own record store, but with iTunes casting its long shadow, hustling digital tracks can still be tough. At least that's the word from three upstart, Manhattan-based digital shops—Tight Tunes (tighttunes.com), Insound (insound.com), and Dancetracks Digital (dancetracksdigital.com). They each follow a different path, but they're all aiming to get their merchandise out and develop a niche.

In the digital world, small record shops have to find creative ways to market their service. Sometimes, that means giving away their product for free in order to build traffic. Consider Tight Tunes—where, since July 2005, Queens natives Matthew Warren and James Reixach have been building a MySpace where artists can conduct monetary transactions.

"Originally, James and I thought we should put up a website for us and our friends to put music on," says Warren. "He an MC and me a DJ, we knew plenty of other artists who had music just sitting, so we thought we'd make this website. As the idea developed we decided the website should be accessible to anyone making good music."

The best news for the artist: All the profit from selling a song on Tight Tunes is theirs to keep. They also get a home page, like on MySpace, to keep a blog, post pictures, and keep people up to date on shows. But the owners of Tight Tunes have yet to see a dime. They're hoping advertising money starts to roll in. Or perhaps someone like Rupert Murdoch will come along.

"We have music on the site from independent labels, but also from solo artists who discovered the site on their own," Warren says. "Every artist on the site has their own web page that they can easily manage, and that is what is important to us, providing artists with an easy do-it-yourself system for selling their music. Our main expenses have been in creating and perfecting the site; neither of us can do much programming and designing. Additional costs have been legal fees and promotional expenses. The legal aspect is significant due to the intricacies of intellectual property and copyright laws. Our main concern is ensuring that the website is not held responsible for users inappropriately selling material that doesn't belong to them."

Despite the advantages the Web provides, a constant complaint among both music collectors and average fans is that digital music is so intangible. The West 17th Street–based online store Insound has been around since 1998, and has been giving away MP3s for five years now as a promotional tool for selling the actual shrink-wrapped vinyl or CD package. But could they survive selling just digital tunes?

"Certainly not," says Insound's president, Matt Wishnow. "The margins are too thin, the credit card fees are too high, and the time and effort it takes is too demanding.

iTunes presumably make their money off their hardware. Or rather, if they make money on the music, it's because their hardware and software give them tens of millions of dollars of free advertising. A company trying to start from scratch and only selling music files will have an uphill battle."

Unlike the indie-rock set, which puts greater importance on LPs, dance music has always relied heavily on singles. With less vinyl being pressed up, though, import and domestic 12-inches have become quite pricey. And the disposable nature of singles, especially in the electronic realm, can cut substantially into unit sales. But Stefan Prescott, owner of the seminal East Village record shop Dancetracks, recently added an online branch called Dancetracks Digital. And he, too, feels digital sales help more than they hurt.

If the Web is the format of the future, Prescott has been working hard to secure his place in it. Besides labels he's worked with in his physical store, he's gone after the rights to sell prized catalogs—such as Fania, the classic Latin label, which he recently acquired—on his website. He now deals with over 450 labels total, and plans to launch a radio station this summer.

That's a lot of information to sift through. What sets him apart from the beast? "iTunes has 90 percent of the market right now. Obviously, this is going to change. Sites like ours are growing very fast and offer the consumer much more selected music; this cannot be matched by larger sites.

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