Tower Records Sets Up Shop, Online

Tower Records is dancing its way into the digital music industry, and carefully around Apple's iTunes Music Store.

While Apple's iTunes could care less if a physical CD was ever manufactured again, the new Tower Records Digital was made to complement the physical CD market, which Tower claims is still very much alive and kicking.

Individual songs sold on the site will be priced at 99 cents and full albums will begin at $9.99 each, with bitrates beginning at 192-Kbits/s, rather than the industry-standard 128 Kbits/s. Apple's chief executive officer Steve Jobs seems to be the only person committed to this price structure, however; Tower Digital executives hinted that they expect prices to rise in digital music stores sooner than later.
Tower Records Digital, which launches on Tuesday, is a Web-based store rather than a downloadable application. Users can search for songs, artists, and albums on the substantial database of music, find recommendations, and purchase music to be played with Windows Media Player. They cannot however, create playlists, tag songs or receive recommendations from other users directly, like on social networking sites such as Last.fm.

"The majority of sales in music still [comes from] CDs but a lot of people who are buying CDs aren't really experiencing digital music," said Mike Jansta, vice president of marketing for Tower Records. "Being able to offer a digital music experience is very important. This store was created to give people a lot of flexibility with their content."
"This is a web-based application and this is the decision we made," said Jason Munyon, vice president of business development for Tower. "It's going to be a for-sale site so it's not going to manage your playlists or anything like that. It was never intended to have playlists, because that is what Windows Media Player is for."

The store was designed to work mainly with Internet Explorer. Although Tower executives say that it should work well with Firefox, they admit that testing still needs to be done with other browsers.

Tower was able to license all major record labels for the store using PureTracks, a third-party downloading store in Canada. Executives said it was a relatively easy process, although anyone who has tried to license and sell digital content knows better.

"We are looking to acquire content that is 100 percent tied to what we're known for, which is depth of selection," said Russ Eisenman, chief marketing officer for Tower. "We will have the categories of music [on which] music fans truly spend time and shop, and also developing artists, [which] is another great category for us that we're focusing on."

Eisenman hinted, however, that the 99-cent price point may eventually increase.

"The marketplace still has to adjust," Eisenman said. "The 99 cent price point is an established price point but the marketplace will adjust. I know that there are a lot of tracks available on iTunes and on Tower Records Digital that are not 99 cents but the marketplace will vary distribution company by distribution company."

Tower is particularly proud of the quality of music that will be sold in the digital store. Most download sites offer tracks at 128 kilobits per second. Tower's digital songs are sold at a bitrate of 192 kilobits per second.

"We waited until we could have better quality," Jansta said. "We don't encode at 128 because it just doesn't sound good so if you're listening to music in the car and your home stereo. It's flat and unexciting."

Music purchased on Tower Records Digital can be burned to a CD or played on any MP3 player other than the iPod, which is locked out to iTunes-only content.

Industry analysts did not give the online store very high marks last week. Paul Resnikoff, editor of Digital Music News , said that the program has "significant usability and setup issues." Munyon says that it is still very much a work in progress and that the number one design goal was simplicity.

"We're going to be constantly improving the site," he said. "We're trying to really bring users a unique experience so that we can target things that they like and target things to them. So we're going to constantly improve it and we hope to have innovations throughout the next few years."