>From yesterday's New York Times
http://www.nytimes.com/2001/07/04/business/04MOOD.html
July 4, 2001
MUSIC TO A RETAILER'S EAR
By JULIE FLAHERTY
Billy Straus was browsing at the Virgin Records Megastore in Union
Square when he saw it. There, atop a display of acid jazz and
trip-hop import compact discs, was a large red placard that read:
"Music You Won't Find on a Pottery Barn CD."
Mr. Straus, whose company, Rock River Communications, happens to
make those Pottery Barn CD's, was honored by the jibe.
"I was so excited that I ran out and bought a disposable camera on
14th Street just to go back and document the occasion," he said.
He took it as a sign that he had arrived. After all, the
compilations he has produced for Pottery Barn - as well as Gap,
Eddie Bauer, Polo/Ralph Lauren, Restoration Hardware, Williams
Sonoma, Structure and Lane Bryant, to name a few - have sold very
well. People seem to like the mixes of sentimental favorites or jazz
classics or one-hit wonders, even if they are concocted to convey
the image of the stores that sell them.
The retailers are satisfied, too, knowing that the mood they want to
associate with their brands is wafting through their customers'
cocktail parties and barbecues. And Mr. Straus, Rock River's
president, is proud that people are listening to music that has been
distilled, in part, by his own musical sensibility.
While companies have long known that ambient music affects shoppers
- from subliminally discouraging theft to putting people in the mood
to buy - only recently did they think to package background music as
a product itself. Many of the largest blue-chip retailers credit
Rock River, and Mr. Straus's incessant phone calls, with persuading
them to join the music business. The stores say it turned out to be
a source of free advertising and modest profit.
Mr. Straus is more direct. He said that revenue at Rock River would
rise to $10 million this year, an 80 percent increase over 2000. He
aims to maintain that pace by expanding beyond retailers and
producing CD's for new kinds of clients, like the W Hotels chain and
Volkswagen. (In a bit of commercial cannibalism, VW's promotional
disc comprises songs from its television ads - the one in which the
windshield wipers on a car sway in time to the music.) Most
recently, he has persuaded some retailers to let him create Internet
radio stations for them. Tuned into Polo Radio lately?
"This has only really grown in the last five or six years," Mr.
Straus said, "because these brands have become synonymous with a
certain lifestyle, and the people who are shopping at these stores,
for better or for worse, definitely can be targeted."
Jim Corrigan, a 35-year-old writer and editor from Walpole, Mass.,
knows he is a target, but that did not stop him from buying a CD of
music by women singers and songwriters when he accompanied his
fiancee to J. Jill, a women's clothing store.
"Ten years ago I would have been younger and hipper and more self-
conscious about it," Mr. Corrigan said. "Now I'm like, `I like the
songs.' "
Victoria's Secret led the way in this field when it released a disc
of classical music in 1998. Sales managers had only to slip the disc
into the store player, and soon women were picking up bras, panties
and Beethoven. The first two volumes of the store's compilation
discs, called Classics by Request, went double platinum, meaning
they sold more than 2 million copies. To date, the store has sold 15
million CD's.
Like other retailers, Victoria's Secret is coy about how much money
it makes from CD sales, though the lingerie chain said that the
sideline makes a profit. Stores usually keep about 60 percent of the
list price on discs produced by Rock River, which retail for $8.50
to $14 each.
With their high margins, music discs make excellent fodder for the
at-the-register impulse buy, said Al Ries, chairman of Ries & Ries,
a marketing consulting firm in Roswell, Ga.
"I think that the average consumer is attracted because they say,
`What in the world is this store doing with a music collection?' "
he said.
It works out to be a comfortable niche for Rock River, which makes
money by selling CD's in runs of 25,000 to 150,000 to chain stores.
The stores use their distribution systems to put the compilations on
shelves across the country. For Rock River, unlike conventional
recorded-music companies, there is no struggling for a spot on the
radio, no scrambling for desirable display space at music stores, no
advertising, no mess.
Mr. Straus, who is 40, mixes almost all of the CD's himself in his
barn, which sits in an apple orchard next to his house near
Brattleboro, Vt. He moved to Vermont from New York two years ago and
expanded into an office in Brattleboro six months ago.
He sees himself as streamlining the music buying process. Staking
out the new-release rack in a record store may be fine for
teenagers, he said, "but for people who are beyond that part of
their life and they have jobs and maybe have families, the reality
is they don't have two hours to go hang out at Tower Records." So,
he said, when a trusted brand name offers them its take on good
music, they accept.
Mr. Straus, who has a background as a music composer and producer,
considers himself a pretty good filter. He left Brown University
after one year to join the music business in 1979. As a sound
engineer, he traveled around recording concerts by artists as
diverse as AC/DC and Miles Davis.
"I was exposed to every genre of music, hard rock one night, bebop
jazz the next," he said, explaining something about his eclectic
tastes.
He later started his own recording studio, and in the 1990's became
a musical director for shows on Nickelodeon and Disney Television.
He won an Emmy for his work on the children's TV program "Where in
the World is Carmen Sandiego?"
Mr. Straus, the father of two young children, said that his first
foray into compiling was to create an alternative to the songs of a
certain purple dinosaur.
"It was just maddening that this was what was getting pushed," he
said, expressing his obvious disdain for the children's television
character Barney. "Don't assume that kids can only digest stuff
that's really sing-songy." His own children, he decided, would grow
up with Louis Armstrong and Louis Jordan.
In 1995, Mr. Straus released his first CD, a Christmas compilation
for Pottery Barn that he had mixed in his New York apartment. All
15,000 copies sold in two weeks.
Sometimes, companies leave all the music decisions up to Rock River,
but more often the tracks are hammered out in brainstorming sessions
with marketing executives. When Eddie Bauer decided to try to
attract younger customers, for example, it ditched its Big Band CD
for a hipper recording of Latin rhythms.
Similarly, Restoration Hardware uses music to match its marketing.
"Last fall, we knew we were going to put together this fun rum story
for the summer," said David Glassman, director of marketing at
Restoration Hardware. "We were going to have the fun rum glasses,
and these glass bamboo drink stirrers and coasters." To complement
the theme, Rock River mixed up a CD called Rum Punch, with songs
like "Papa Loves Mambo" by Perry Como and "Cocoanut Woman" by Harry
Belafonte.
Once the songs are chosen, the licensing begins. Mr. Straus admits
that he "didn't have a clue" when he started the business as to how
complicated rights and permissions can be. Mr. Straus's partner and
Rock River's executive vice president, Jeff Daniel, 32, handles many
of the logistics from the company's San Francisco office.
Before joining Rock River in 1996, Mr. Daniel worked for Time Inc.,
where he helped to produce a number of music compilations with names
like "Pure Party" and "Hot Dance Mix," which were sold on late-
night television programs.
Convincing singers to sign onto, say, an Old Navy production
requires another level of diplomacy. Sometimes it is just not
possible. Bruce Springsteen and Led Zepplin, for example, flatly
refuse to let their work appear on compilation CD's made for stores.
But for an increasing number of artists, being associated with a
brand name is not the taboo it once was. Mr. Daniel points to Moby,
a singer and D.J. whose publicists encourage the use of his songs in
television commercials and movie trailers.
"For a platinum-selling artist that is a really unusual thing to
do," Mr. Daniel said. "They realize there is no stigma to selling
out. They really are becoming savvy businessmen."
For lesser-known bands like Dave's True Story, a quirky lounge act
from New York, Rock River is a blessing, especially when the duo's
manager, Jeff Eyrich, can hold a Pottery Barn CD up to a skeptical
booking agent and say, "Well, it appealed to the 40,000 people who
bought this."
"People used to say, `You're selling out to corporate entities,' "
he said. "That doesn't hold water for me. When you love your music
and love what you're doing, you look for any and all opportunities
of getting the music to the people."
Besides, he added, "Pottery Barn is a pretty cool store."
Compilations, however, are not for everyone. Although Rock River did
put out an acid jazz CD a few years back, it was not likely to
supplant an aficionado's collection. One marketing executive
conceded that there were only so many times she could hear her
store's lullaby CD before she had to leave the sales floor.
Now they are taking their music to the Internet. Last year Rock
River spun off a subsidiary, WebSound, which programs streaming
audio for corporate Web sites, spinning tunes similar to their
compact discs. A Web shopper can log on to Polo.com, for example,
and listen to "The Girl from Ipanema" or "Puttin' on the Ritz" -
"resort" music to accompany its resort clothing collection.
The point is to keep customers shopping longer and it seems to work.
Vw.com, for instance, found that since it added music to its site,
the average visitor stay has increased to 15 minutes from 10. At the
same time, Arbitron/Edison Media has concluded that Web surfers who
use streaming media are more likely to click on banner ads and are
twice as likely to buy online.
The trick now is to keep the idea of branded music fresh while
signing up new business customers - and new types of customers, like
cosmetics companies and department stores (Nieman Marcus is working
on its first CD release).
"As everybody sells them, the average retail sales are going to
decline," said Mr. Ries, the marketing consultant. "Like all sorts
of fads, they come and go."
In the end, there is always the collector's market. Mr. Straus said
he has seen some of his out-of-print CD's selling on eBay for $40.
------
UbuWeb Visual, Concrete + Sound Poetry
http://www.ubu.com
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