The trendsetting retailers, of course, beg to differ. Music Millennium's Terry Currier notes that his two stores helped to break, among others, the singer-songwriter Elliott Smith and guitar ace Richard Thompson as a soloist--and Thompson "has never received any airplay in this town at all," Currier adds. Waterloo's John Kunz cites rock musician Stevie Ray Vaughan and alterna-pop group Fastball as two acts that, he says, "unequivocally" broke out in his 55-employee establishment. And Carl Singmaster, owner of $10-million Manifest Discs & Tapes, which comprises six stores in the Carolinas, points to 2 Skinnee J's ("We sold hundreds of copies, before they were ever signed, before they ever had one spin on radio," he says) and pop stars Hootie & the Blowfish, hometown boys that Singmaster first heard in a club and on the band's own self-produced tapes.
Shalett isn't shy about discrediting the window of opportunity Mike Dreese is so worried about losing. "You know what?" he says. "[Newbury Comics is] a retailer. And we're not giving them an exclusive position to sell records. Last I looked, that would be a violation of fair trade....The issue is not about SoundScan. The issue is that [Mike Dreese] would like a two-week window on selling records."
Retailers, Shalett insists, know what their competitors are selling not because of SoundScan's DMA reports or because the labels fax them immediate downloads from SoundScan's Web page but because record-label salespeople talk. They talk to other retail customers, and they talk to the labels about who's ordering what. Here's how Shalett puts it: "Do you think that the salesman for Sony Music or WEA Distribution if, all of a sudden, argumentatively speaking, Michael Dreese has taken in a box of 25 copies of the Goo Goo Dolls, and he now calls back the distributor and says, 'Hey, I need 25 more copies of the Goo Goo Dolls,' and the guy says, 'Well, what's up?' 'Oh, hey, I'm doing really good with these.' Don't you think he calls Strawberries? Don't you think he calls the Harvard Coop?"
But information that's passed by word of mouth is one thing. Information that's shot electronically from a bar-code-scanning POS system straight to a high-powered database, and printed out in black and white, is something else. "[The labels] know what you're buying, but they don't know what you're selling," says Currier, echoing Ananth Raman's remarks about "fluctuations."
Besides, it takes time for information to be shuttled around the old-fashioned way. "Let's say my Sony sales rep comes into the store," says Currier. "They all get a copy of my top-selling records for the week. So if...they're seeing that it's one of their records in my top 30, they're going to probably go to the other accounts in the area and go, 'Hey, you'd better watch this record.' Now, by the time the other account reacts to it, three weeks have passed." Unless SoundScan is in play. Then it could be a matter of just days.
Yet as disturbed as Mike Dreese is at the prospect of losing his window of opportunity, he's even more bothered by the idea that SoundScan has established relationships with certain retailers--relationships, Dreese says, that the SoundScan execs had assured him were in the past. "We had done some consulting," Dreese says they told him. "We presently are not."
But when pressed, Shalett acknowledges that SoundScan is working with Handleman--right now. "We're doing work with the Handleman Co. about their sales," he says. "And we're not doing consulting work....We're trying to help them manage their inventory better, based on taking their sales and doing market-segmentation work with them. 'This sale took place in this store, the trade area is this wide, we can make a mathematical expectation that this is most likely the customer that's buying it. If I were you, for your store number 68, based on your own sales, I would have a little less of this and a little bit more of that."
One phrase in the last sentence is particularly crucial: "based on your own sales." Shalett insists that in its work with Handleman, SoundScan is getting all its information from the company itself, not from any other retailers in the various regions.
But Peter Cline tells a different story. Cline is president of Handleman's category-management group, Handleman Entertainment Resource, which supplies all the music to the mass-market retailers that the company services. Referring to SoundScan's work for Handleman, Cline says, "Oh, I know they're using other total data. It would be of no value to us if they weren't. Absolutely. We can do that ourselves."
According to Cline, in its work for Handleman, SoundScan is analyzing areas as refined as 700 or 800 families--or households--to see what genres of music sell in each one. "We give SoundScan aggregate data for all of our stores," says Cline. "We get back data on what's sold in that group [of families]. And then we can look at our stores within that neighborhood, if you will, to see how our mix of sales compares to that mix of sales to make sure that we're taking advantage of the opportunity."
For example, Handleman might look at sales for a group of 800 families in Lynn, Mass., to determine which came from the local Wal-Mart (numbers Handleman already has because it's Wal-Mart's rackjobber) and which came from all other music stores in the area. All Handleman has to do is subtract the Wal-Mart figures from the total area sales that are provided by SoundScan to know how to adjust its product mix. "What you're trying to do is to sort how much country, urban, rock, pop, gospel, Hispanic, etc., has sold," says Cline. "And then you reassort your number of SKUs [stock-keeping units] to line up with the opportunity."
