From Bricks and Mortar to Digital Music Master

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Josh Madell, 37, is the co-owner of Other Music. JOHN TOZZI

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The company's first online venture began nearly a decade ago with an e-mail newsletter reviewing new releases. The update now reaches 25,000 subscribers, and Madell calls the blurbs his staff writes crucial to the store's role as a tastemaker in the music world. "The people who work at the independent record shops tend to be the specialists and really know what they're talking about, and that's a real advantage when it comes to being online," says Andrew Dubber, a music industry consultant in Britain and author of the blog New Music Strategies. Dubber says stores should try to capitalize on that expertise by helping consumers find what they like amid the near-boundless choice of the Internet (iTunes boasts 6 million songs).

Wooing the Aficionados

While Other Music expands its online presence, it is also trying to keep its brick-and-mortar operation relevant. The store sells tickets to local concerts and hosts free in-store shows. Both get customers in the door and build the Other Music brand as a place for aficionados. The in-store shows are recorded and archived on the store's Web site, along with artist interviews, which can boost sales online. Madell hopes to have sponsors underwrite the video series soon.

Using digital media to connect customers with music they like, and with other like-minded fans, may be the best bet for independent music shops, says Sinnreich. "I would be working hard to integrate tools like Meetup and Facebook into their site, so people could get together and have listening parties or set up ad hoc concerts," he says.

None of this is easy. Madell likens it to starting a new venture, and he says entrepreneurs struggling to revamp obsolete business models need to commit to the same kind of effort. But as grim as recent years have been for music retailers, Madell sees reason to hope. "I feel like there's a lot of opportunity if you're willing to shake up your way of thinking, and approach things in different ways and experiment and take chances," he says.

Flip through this slide show (BusinessWeek.com, 4/21/08) for a look at strategies Other Music is using to adapt to the Web that you could borrow for your own business.

Tozzi covers small business for BusinessWeek Online.