NEWS
Music Stores Feel the Crunch
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by Megan Costello
Wednesday, September 17, 2003
Countless downtown renovation projects, like the proposed plan for Madison’s Overture Center, promise improvements in Madison’s central business district, State Street.
Yet many of the locally owned music stores on State Street report that they have never been in worse economic positions.
Gary Feest, owner of Sugar Shack Records, was forced to close his shop Sunday, Sept. 7, after 12 and half years on State Street and 22 years in the downtown area, as a result of this precarious local business environment.
Feest found he could not compete with “a combination of increasing rents and property taxes and decreasing music sales.”
Sugar Shack Record’s music sales depended heavily on University of Wisconsin students, who have recently turned to Internet downloads and CD burners instead of purchasing records. As a result, Feest said he plans to re-open at a new location on Atwood Avenue, where his customer base will extend beyond students.
For the last three to four years, Sugar Shack Records, as well as others in the area, has felt the crunch of Internet downloading and piracy.
“I hear it two or three times a day,” founder and co-owner of B-Side Records Dan Jenkins said. “Don’t buy that, I’ll burn it for you.”
Jenkins, who has taken a cut in his salary and now has only minimal health care coverage, pays as much as $2,200 per month in rent for his 500 square foot space.
B-Side Records has been at 436 State Street for 21 years this month, but despite decreases in sales, Jenkins plans on signing another 5-year lease.
With mounting rents and property taxes, though, the future does not look like it will be easy. As of Jan. 1, 2004, Jenkins will be paying $2,600 in rent.
“If you’re a renter here, the one reason why your rents are so high is because taxes are so high,” Jenkins commented.
District 8 Alder Austin King agrees there has been an, “incredible rise in taxes, greater than in past decades.” Despite the looming presence of corporate businesses on State Street, the city cannot favor local stores with tax cuts or breaks.
“We are looking to maintain the historic values of State Street,” King said. “We can try to stem the rise of property taxes, but the options are limited.”
With million dollar facelifts such as the State Street Redesign Project and the Overture Center, real estate values may continue to skyrocket.
To increase revenue, many independently owned music stores have begun to sell other products.
As of August 2003, The Exclusive Company, another State St. store, took an 18 percent sales drop from the previous year, but a representative for the company said that selling DVDs and vinyl records has helped business.
Another State Street business, CD Exchange, sells used games, DVDs, VHS and guitar strings to bolster declining CD sales. The owner of CD Exchange, Lance Roesler, once ran two stores, but due to rising rents and property taxes he now operates from only one location.
Despite offering other products, CD Exchange too has felt the pressure of Internet downloading.
“The whole industry is constantly in flux because of burning,” said store manager Kristen Harberg.
Piracy Laws are working to slow internet downloading by allowing music companies to sue individuals for as much as $150,000 per downloaded song. Even so, downloading continues to affect the music industry.
CD Exchange employee Michael Huggins said he sees Internet piracy two ways.
“One side is that any popular music, as in Top 40, is going to be affected,” Huggins said. “But at the same time I think that it also forces artists to put out good music.”
