It all comes down to one question: Why should people buy recorded music at Homer's Records or any other independent record store rather than order it online?
"In 2011, it's a 50-50 split between digital and physical," said Homer's General Manager Mike Fratt, referring to a music market split between digital music files and CDs and vinyl. "If people choose to buy a full album, almost 75 percent of the time they choose to buy a physical version. Fidelity has something to do with it; also, it's the ultimate backup."
Then Fratt gave what I believe is the real reason to shop at record stores. "I think going to a record store is an enjoyable experience, like going to a book store or a comic book store," he said. "There's a type of discovery that occurs in a record store that cannot be replicated online."
No number of reasons, however, was enough to save Homer's Orchard Plaza location at 2457 South 132nd St. Originally opened at Bel Air Plaza in 1975, the store moved to Orchard Plaza in 1980. Fratt, who began his Homer's career in the warehouse in 1978, managed the Orchard Plaza store for five years before transferring to the Old Market location, and eventually into the head office in '91. In its heyday, Homer's boasted a worldwide chain of six stores. Today, Fratt works out of a small office tucked away off the sales floor of the Old Market store, soon to be the chain's sole survivor.
Fratt announced last week that the Orchard Plaza store will close Sept. 10. "Quite frankly, we’re surprised we made it this long with two locations in Omaha," he said in the press release. "When we surveyed the future landscape in 2006 we assumed we would be at one location per city by 2010. Most of our indie record store brethren in the Coalition of Independent Music Stores are down to one solid location per city." He added that the 132nd & Center area is "losing its oomph as a strong retail sector, and Homer's was not willing to risk moving the store with the hopes of finding an audience."
Fratt confirmed the obvious reason for the closure via a phone call Sunday. The store was losing money. "The store's long-term lease ran out at the beginning of 2010," he said. "We looked at the numbers and it wasn't quite under break even. We did a one-year lease, and as we neared the end of 2010, we were still right on the edge. So we did a 90-day lease, then another 90 then a 60. Now the store is below break even."
He said some, but not all, of the Orchard Plaza staff will go to work at the Old Market Homer's, where sales are actually up for the year. "And we're very optimistic about the next 10 years."
Next 10 years?
"All of our indie brethren all feeling challenged, there's no question about it," Fratt said. "For us, the unit sales in CDs has pretty much leveled off at the Old Market location. We're not giving ground. Part of the reason has to do with the declining price point -- we have a huge bin, literally thousands of artists, whose music sells for $7.99. That's why catalog sales are fairly robust." But sales of new releases are down slightly, he said.
"The second issue is vinyl," he added. "It's been huge, and a large part of our business, and it keeps growing." Though he's referring primarily to used vinyl, new-release vinyl sales have stepped up. Other revenue comes from selling used product on Amazon Marketplace (Homer's closed its Web store two years ago).
Asked what the music industry needs to do to keep independent stores alive, Fratt said a few trading partners are allowing them to buy at a lower price and hold the product four to six months before paying for it. "Hopefully by that time we've turned it and can pay it off," he said. A new distribution model could involve selling new music on consignment, though there are some accounting challenges to overcome. "It could be something of a game changer."
Fratt still contends that the biggest threat to independent record stores wasn't digital downloads, but the giant box stores like Best Buy, Wal Mart and Target. "Target now offers fewer than 1,000 titles," he said. "Best Buy shuttered its operations and now contracts it out. Borders is exiting the market."
He said in addition to leaning on its used record sales, the Old Market store is "recommitting to gifts," offering merchandise other than recorded music to all those folks wandering up and down Howard St. after dinner.
"But overall, it's about catalog, which is what built this company in the '70s and '80s," Fratt said.
"There's a quantity of people still purchasing physical. Not everyone has a home computer -- 20 percent of people don't have broadband and never will," he said. "Physical is not going away, no matter how much people want to bitch about it. It isn't. I think we've got 10 years, easily."
In the end, it all comes down to that original question: Why should people buy music at a record store instead of online? As long as Fratt continues to have an answer, Homer's will be around.
Lazy-i is a weekly column by Reader senior contributing writer Tim McMahan focused on the Omaha music scene. Check out Tim's daily music news updates at his website, lazy-i.com, or email him at email@example.com.