The Seven Billion Dollar Boutique Business

You've already read five hundred articles announcing the death of the music CD business. You'll probably read five hundred more. Slate examines the music obituary page, and determines it's just the people that want to sell you an overpriced disc filled with music you don't want from a store with huge overheads that are holding the lilies. There's plenty of money for people with an up-to-date approach to retail.

Legacy music retailers and manufacturers now face many of the same difficulties as American auto companies. They built a business infrastructure - national chains, huge outlets in high-profile locations, layers of management - predicated on selling massive and growing quantities of CDs for $15.99 and up. Like the American automakers, they found that new competition - from iTunes, file-sharing, and online retailers - severely cut into their margins, their market share, and their pricing power. In such an environment, companies with significant capital invested in stores and substantial overhead costs get destroyed. And as they fail, they do so loudly, inspiring widespread pessimism.
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