Tower Records dies again! how does the little guy survive?

for the second time in 2 years tower Records filed for bankruptcy..who is to blame? most people look at the internet as the main suspect...but as the article points out its not just the internet that has played a role in the failure of the store chain.. here is my 2 cents..

• yes record stores (and record labels for that matter) failed to keep up with online retailers like amazon.com, walmart, buy.com where you could order the actual CD for a lower price
• online music stores like itunes...is another factor, which is also a sign of the evolution of music..you dont see that many portable cd players around..even older generations have given into the ipod and mp3 craze where you can carry thousands of songs where before you could only carry one cd...
• file sharing is another factor..a big one I would say..why pay for it (even the digital format) when I can get it for free using file sharing technology like bit torrent..

There are still people that enjoy getting the actual CD..my girlfriend being one..shes waiting for the new justin timberlake cd to be released...I just had to ask her - shes a big ipoder, and does her share of free downloading too but she said if the songs are good and she will enjoy the CD she will buy it to support the artist..why not buy it and downloaded from itunes? I said.. no she actaully wants the CD..
....but what about the smaller guys? the smaller labels and record stores? how have they kept alive with the digital evolution? when you say tower records I think mainstream.. I've been doing music consulting (management, marketing, promotions)under my amp agency for years and have represented a wide range of labels..from the start ups to the world known labels..a few years ago when a label brought me on for some consulting.."how can we compete and stay alive with free downloads"? was the question.. there was no one answer..it had to be more than just a pretty cd cover.. here is a list of what was implemented..now remember that this was for a label that catered to the electronic genre and the DJ cult

• more than just a cd cover-cd package..I dont want just a cd and its cover..I want to see what inspired the artist, pictures, lyrics, a message to me the fan!
• CD + DVD combo - including a dvd full of features - clips from tour, behind the scenes, if you couldnt catch them on tour at least you feel like you were there
• Free offers - buy the cd and receive a free ticket to the show in your city, a tshirt, a sticker, a sample cd of bonus tracks
• in store appearances- signed copies of cds, posters, and pictures (one of the labels had a live mix compilation (the cd was recorde live at a venue and with microphones all over the place, when you got there you dropped your name - when the cd was release it included a list of everyone attended, on the release date a store appeareance took place at tower records in VA..

So if you are a small label or thinking of starting one..its not going to be easy or as profitable as it was 5-7 years ago if you dont adapt new forms of marketing