Why the MI industry is dead, and how it is being reborn

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In advance of our Industry Forum event next Thursday on May 16th, we bring you a highly thought-provoking article from someone from our industry who will be at the event, please read on…

You may know me. I used to run a fairly successful MI retail operation. We won awards. We did cool marketing. We had great stores and a great website. We were riding high on the review sites because we focused on friendly, impartial advice, and because we knew what we were talking about. And because we were honest and fair.

But things didn’t work out, and now we no longer exist, or at least only as a sort of Frankenstein approximation of what we once were. Now, from the small room that these days serves as my office, I want to talk about why things didn’t work out, and what this means for the industry.

Around twenty years ago, when I first became involved in the MI industry, things were almost unrecognisably different to how they are now. The internet existed, but not as we now know it. Amazon only really sold books. Google Products didn’t exist. The iPhone was but a glint in Steve Jobs’ steely eye. Mark Zuckerberg was still at school. Britney Spears was dressing up as if she were still at school (for slightly creepy reasons).

The way people bought music gear was very different too. If you were an enthusiastic amateur, the order of proceedings was that you would go down to your local music shop at the weekend and talk to the staff. Maybe you’d ask them what you needed to buy to sound like Oasis, or Avril Lavigne, or to make Dubstep music. They would show you around the shop and recommend stuff to you. You would accept their advice, buy the gear, and go home happy. The assistant would rub their hands at the excellent mark-up they’d made, perhaps enough to buy a few pints that evening off the back of their commission-only wage.

Fast forward ten years to 2008 and things had changed hugely. Any MI retailer who didn’t have a website was looked at weirdly. Google Products was going strong, and it was free to list as many products as you wished, meaning the wonderful variety of retailers out there were reduced to a list of what actually mattered: price and availability. Amazon were starting to aggressively push their marketplace to encourage more and more retailers to sell more and more categories of products on their platform, charging astronomical commission rates because, y’know, Amazon. The UK’s largest MI chain at the time went into administration, citing online competition as a major factor. Myspace was where all the cool cats hung out online, despite the weird spam and terrible animated gifs. Lady Gaga was wearing a dress made out of meat (for slightly creepy reasons).

And, again, the way people bought gear had changed. In those days, you would visit your local music store, ask the assistant for advice, and then… “go and have a think about it”. Most of this “having a think” in fact involved searching Google Products for the gear that had been recommended and checking for lower prices. If there were lower prices, you might go back to the retailer and ask for a price match. But you might not. It’s a bit embarrassing to do that, isn’t it? And they might not be able to match the prices of the cheap online stores, what with their higher overheads and such like. So best not to ask, so as not to cause offence.

This was the world my business inhabited for most of its existence. So we just accepted it; we put big signs up in the shops and banners up on the website telling people we’d happily match prices (with the slightly passive-aggressive offer to “throw the service in for free”). We spent an inordinate amount of time and energy tracking our competitors’ prices. As far as possible, we kept costs to a minimum; mainly meaning no-one got paid properly, despite their expertise, their friendliness, and their honesty. We haggled hard for better prices from our suppliers. We were careful to only use one sheet of toilet roll at a time.

And we limped along. Mark up wasn’t too bad. We were still selling lots of gear. We got to talk about the gear we loved. It was a nice life (albeit a somewhat frugal one).

In 1988, Hunter S Thompson said “the music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs”. Twenty years later, things hadn’t changed that much. There just wasn’t any money any more.

Then – and this is the bit that doesn’t get talked about so much – things changed again.

Maybe it’s because Youtube has one billion more unique visitors per month than it did five years ago, and a squillion more product demo videos. Maybe it’s something to do with the introduction of 4G into the UK in 2012, meaning you can now sit on a bus watching those product demo videos, and the Facebook and YouTube algorithms will just keep feeding them to you. Maybe it’s because the digital natives – those born into a world where sophisticated technology has always existed – have come of age, and don’t see why you would get your advice from an actual physical person in a shop, rather than from an impassioned enthusiast on the other side of the world. Maybe it’s because most of us now find out that a chain of shops we used to visit has closed down because we read about it on our phone, not because we go there and the shutters are down. Maybe it’s because a traditional music shop, for many of us, is now little more than a glorified internet collection point (albeit with longer hair and more piercings).

What’s changed in the last five years is that – where once the internet came and took our margin – now it has come to take our service; the thing we really loved about our jobs, the thing that we thought made us stand apart from our competitors, the one thing we had left.

The advisors of tomorrow – of today, even – are not standing ready at the counters of music stores, or even manning the phones and live chat apps of MI retailers. They are sitting in their bedrooms or their kitchens in cities and towns and villages across the world. They have iPhone cameras, and they are not afraid to use them. They know how to upload videos and tag them and share them on strange new social networks with names that don’t make sense to anyone born before 1995. They are blogging and vlogging and streaming and dreaming. They are the ones that are influencing our customers’ purchasing decisions, long before those customers engage with our stores or websites, if indeed they ever do.

And there are lots of them – thousands of times more than there are MI sales people. And they’re friendly, and they know what they’re talking about, and they’re honest.

The world is changing again, my friends, and we must change with it. These people are your future, and the future’s already here.

Come along to ‘The Future of Our Industry’ – a vital event designed to support your business, and inspire you with new ideas to help you to tackle this tough climate. We are aiming to widen the debate and together learn more about the issues we collectively face.

The afternoon will be made up of four topics that each address challenges our industry will face both now and in the future. A cross-section of relevant voices from around the industry will discuss each topic in turn before opening up to the floor for further question and comment. Our 4 panels are as follows:

  • ‘If 80% of the population claim they aspire to play a musical instrument, why isn’t our industry more diverse?’
  • ‘How will a bricks and mortar store be relevant to the customer purchase journey of the future?’
  • ‘Should the Government have an obligation to support the High Street and if so how?’
  • ‘How can you run a profitable music business in the future?’

All information here. Email clare@mia.org.uk ASAP to reserve your place.