Godsmack: The impending collapse of the Christian Record Industry - Part 2

Religious retail has been around for a long time. Centuries, even. There has always been a market for faith-based accoutrements. There is still a large demand for these products today. If you’ve ever been to the Christian Booksellers Association’s annual convention —then you know what I mean. Football field-sized convention halls—one after the other—teeming with what many detractors call “Jesus Junk”. Yes, I’ve seen some doozies in my day—blankets that say, “Be covered with the Spirit” and of course, that tasty confection…Testamints. But through all the gimmickry, the fundamental staples are books and Bibles. They are the meat of the market amidst the many spuds and duds of the” gift” sector of the ‘CBA” marketplace.

The modern Christian retail boom seems to have its origin in the 60’s—amidst the great social/cultural shifts that occurred as people shed much of the post-war conformist mindset in search of something deep and real. Many embraced the drugs and free love ideals of the hippie era. Others embraced a newfound faith in Jesus Christ. To be sure, this “Jesus Movement” spawned a fervent growth in the evangelical church. People were being “born again” …and in a big and committed way. Up sprang a great need for modern literature to accompany the teachings of the Bible and the modern Christian bookstore was thus born.

Along with this Jesus Movement came the need for modern music—something more contemporary than classic hymns—and thus Contemporary Christian Music was also born as a cottage industry to support the growing numbers of new evangelical believers.

I remember my first visit to a Christian bookstore. It was Maranatha Village in Costa Mesa, CA—right around the corner from Calvary Chapel—arguably one of the cornerstone churches of the Jesus Movement. It was 1982. I had just come to faith. My friends had taken me to a Christian rock concert at Calvary Chapel. I had no idea that Christian rock even existed. As I walked through the aisles of this bookstore, I was stunned! I had no idea about any of this literature or music. I went to listening stations and heard great music by pioneer Christian artists such as Phil Keaggy and others. My mind was blown! I bought piles of books and records that truly helped bolster my newfound faith.

Those are great memories.

Fast forward to 2007. Those kinds of stores are going away—most of them already gone. You see, once upon a time, there was a fervent need for distinctly Christian-oriented retail houses. The “secular” marketplace in general did not seem to understand or care about the needs of this burgeoning movement. In fact, some hard-core evangelical factions believed that truth did not exist out there in the world—and that there was a complete and total bias against the ways of God. In the 70’s, 80’s and even the 90’s – dedicated evangelicals flocked to these literary oasis’s to get their rare spiritual materials – especially that rarest of spiritual encouragement …evangelical Christian music. It was a happy and unique market back then, distinctively set apart from the mainstream – a safe haven of spiritual light amidst a darkened media world. Then something happened in the late 90’s. It turned out that people of faith existed throughout the secular retail and distribution world and they saw that there was a distinct demographic of people who purchased Christian-oriented media products such as books – gifts and music. Someone had an epiphany—“Let’s carry these items in traditional…gasp…secular outlets. The seemingly once-hardened hearts of secular retailers suddenly exclaimed, “If we stock it—they will come”. And then it happened…media consuming evangelicals started seeing faith—based products in major booksellers and department stores. And due to the competitive nature of these bigger chains—at a lesser price. The circled wagons of Christian retail had been penetrated. Turns out that these secular free market injuns did not want to kill off the settlers after all—they just wanted to sell them their beads at a competitive price.

What am I talking about?

Most major distributor/retailers operate under a simple premise: they want to sell what people want to buy. And somewhere, someone somehow figured out that if people want to buy Christian products—they should sell them.

So…with the perceived secular boogeyman eradicated from their midst—American evangelicals began buying these same products in major retail outlets for a lesser price. Some maintained their loyalty to the small bookstores that had served their needs in their early days of faith, but by and large, people bought the products they wanted where it was convenient and where the price was best. This is a basic premise of supply chain retail.

The problem for the Christian record business is that they had built a unique retail system based on these original Christian-only retail outlets that had their own culture and style of doing business. When the major labels came acquiring all these Christian labels – they took a peek at this cultural business subset and thought, ”hmmm—that’s different—we’ll leave it alone – if it ain't broke, we won’t try to fix it”. Meanwhile, the migration of the average Christian buyer to general market retail continued.

Amidst all of this, an additional risk factor for Christian record companies was the fact that many Christian-only retail outlets saw music product as problematic and high-maintenance. The aggressive sales tactics of the music biz didn’t always sit well with many of the mom and pop retail stores and the success of recorded music was always harder to foresee than book sales. Also—the margin was not as good on music as it was on books.

So, when Christian retail has to start throwing off ballast to survive their shrinking market share pie…guess what’s gonna go first?—the obvious headache/low margin items. That’s right—recorded music. It won’t happen overnight, but these stores have already started ordering less and less because they are selling less and less.

Ultimately, Christian Retail is doomed. Just like the Home Depot’s of the world drove out the smaller hardware stores—these so-called secular “Big-Box” retail outlets will eventually crush the smaller Christian retail outlets. Please don’t try and spiritualize this and say it’s a victory for the supposed “godless world” at large. Christians haven’t stopped consuming Christian products—it's just that the bigger retail market was willing to sell it to them —and with more competitive pricing. Remember…secular retail wants to sell what people will buy.

A friend of mine who recently sold his multiple bookstores in the southeast told me that his phone has been ringing constantly with other storeowners wanting advice on how they too can get out from under the rubble of the collapsing market. The towers are tottering.

Even the strongest Christian retail chain…Family Christian—is closing stores at a double-digit rate.

Yikes! Quite a boondoggle for the Christian record labels. With the erosion of the once unique CBA marketplace, these same labels have to compete for the same disappearing music shelf space of their general market label counterparts—who are used to spending big dollars for product placement.

And with general market sales in a virtual free-fall, the slope gets mighty slippery indeed. Anyone who thinks that the sales numbers will rebound is in serious denial. The fact is that this particular Christian retail dynasty is skidding toward a grinding halt. The 10-year emergence of the digital age should have hardly caught anyone at Christian record companies by surprise.

But it did.

It would be tempting to throw in a few scriptures in here to support this position…but it would be pathetic.

People still want to read faith-based literature. They just want to buy it at Wal-Mart instead of Friendly’s Christian Book Store—for less money.

The world isn’t getting worse. It’s just changing.

And some people hate change—especially record companies.

It’s hard to get used to change...when you’re used to paper money.

To be continued.

Comments

You hit the nail on the head. As an owner of several Chrisitan Retail stores, there are many things in the industry right now that freak me out. And while I do think that music will evaporate, I disagree with your timing.

Music sales at my Christian Bookstore have actually increased this past year, due because the target audience of my particular bookstore can hardly spell iTunes, much less figure out how to run an iPod correctly.

I do know Christian businesses that target a younger demographic, and they have seen significant drops in sales.

The salvation for the industry is that it cannot mourn the loss of the music industry, but find out how to replace the sales. And honestly, I am skeptical if it can be done.

Great insight. Looking forward to your next posts.

jreed
http://www.RUNwithGOD.com

Posted by: Jeff Reed | February 21, 2007 at 09:31 PM