The music industry is dead. Long live the Music Industry 2.0. 

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Michael W. Bunch

Like most club-dwelling denizens of the Nashville rock scene, Kyle Andrews works without an entourage. He changes his own guitar strings and tunes his own instrument.

The difference is, he doesn't have to. Unlike other local club dwellers swelling the ranks of the Great Unsigned, Kyle Andrews made more than six figures last year from his music career.

What, you've never heard of him? Look him up on YouTube, where he travels among platinum-certified superstars such as Lady Gaga and Lil Wayne — as well as thousands upon thousands of hitherto nameless, faceless artists seeking viral celebrity. Until last year, Andrews would have been considered one of the latter.

But almost exactly a year ago, he posted the video for his song "You Always Make Me Smile," a carefree toe-tapper yoked to a clip depicting an epic water-balloon battle. Since Aug. 30, 2010, it has racked up more than 1.5 million views and counting.

Scroll down and you'll see a key reason why. Among thousands of comments — almost all posted by viral viewers in cities and countries where he's never even performed, let alone promoted himself — one says, "Thumbs up if you saw this on the Holiday Inn commercial!"

Andrews' success embodies dramatic shifts in the music industry — a field now dominated by independent artists and entities, driven by consumers, and boundlessly connected by the push of a button. In this digitally tilted landscape, commercials aren't instantaneous cred killers: They're a coveted venue for breaking new acts. Free online viewing and listening sites aren't the enemy: They're word-of-mouth essentials.

That isn't to say major labels have followed the last mammoth into the tar pit. "Even though it's a 21st century business model today, [big labels] definitely still have a place," says Ken Weinstein, president of publicity giant Big Hassle Media. "They can fire things up like nothing else — there's still no muscle like their muscle."

But stories such as Andrews' show how new models are starting to pay off. The push from major-label gatekeepers is yielding to the pull of a viral populace — an audience that can access nearly every piece of published music they could ever want to hear. Now artists, labels, publishers and brick-and-mortar retailers are seeking ways to reap financially from the digital revolution.

That has turned the new century's music industry into wide open space, with fewer middlemen between the listener and the music. Its frontier is a rapidly evolving digital infrastructure that links online retailers, streaming subscription services, free-media sites and social networks.

Yet there's an even bigger shift at play here. Success, under the terms of the 20th century music industry, meant a cradle-to-grave contract with a major label — always favoring the label. In today's hodgepodge of career paths and options, no single business model dominates. Can these scattered showers of income eventually run together into a revenue stream?

For a number of artists, companies and entrepreneurs, both in Nashville and beyond, the forecast is remarkably promising.


To be sure, this Music Industry 2.0 was born as much out of economic upheaval as technological evolution. At the dawn of the 21st century, Napster hit the recording industry the way the Four Horsemen hit the apocalypse. Almost overnight, the peer-to-peer file-sharing service invaded home computers worldwide, inspiring consumers to seek and download music.

And that's what they did, according to the Recording Industry Association of America — to the tune of $55 billion in lost revenue. The industry's $15 billion-a-year business model, which had thrived for decades by selling a $17.99 product, was abruptly undercut by an unforeseen competitor, at an unbeatable price — free.

Hip-hop impresario Dr. Dre cried that Napster was stealing food from his children's mouths. But optimists argued that the digital Pandora's box would ultimately empower independent artists, labels and entities.

"We should think of [it] as a new kind of radio — a promotional tool that can help artists who don't have the opportunity to get their music played on mainstream radio or on MTV," hip-hop legend Chuck D told The New York Times in 2000.

Eleven years later, MTV is no longer a music network, and radio is no longer a reliable sales bastion for anything but country and Top 40 pop. Record-store chains have gone the way of the rumble seat. As for Napster — like the $17.99 CD — mostly only the memory remains.

But Mistachuck wasn't wrong. Thanks in part to these new avenues for promotion and distribution, artists no longer need to sign to a record label to make a living in music.

Just ask St. Louis' Pernikoff Brothers, Tom and Rick, whose DIY, crowd-sourced site Tunespeak allows users to earn royalties on record sales for helping to spread their latest musical discovery's viral distribution. On Tunespeak, fans share song links to a band's profile on social networks like Facebook or Twitter. Following the link gets you a seven-day stream of an album, with the hope that a purchase will follow. When enough purchases do (as in three), the poster gets a respectable cut. Think of it as sort of an inverted Kickstarter — the crowd-sourced project-financing site artists are now regularly using to fund their endeavors.

Better still, ask Kyle Andrews. The 29-year-old singer-songwriter could have signed a long-term, multi-album label deal that would've netted him a modest five-figure advance, bankrolled his studio costs and supported his efforts on the road. He had that opportunity.

But Andrews felt there were too many strings attached. He would relinquish ownership of his master recordings. He would face the inescapable hazards of the business: the long gestation periods, the shifting marketing agendas, the shuffling of staff that can exile a once-hot artist to low-priority Outer Slobbovia.

"I've just watched so many close friends go through that," Andrews tells the Scene. "To sit for nine months and then have it go south would just be really upsetting."

So with the help of Terrorbird Media, a Brooklyn-based music marketing company that manages him and administrates his publishing, Andrews found an alternative. McCann-Erickson Worldwide Inc. — the advertising agency representing the Holiday Inn hotel chain — offered Andrews a one-song deal.

McCann-Erickson wanted to use "You Always Make Me Smile" — a song Andrews wrote with his roommate, recorded in his home studio and had previously self-released — as the audio equivalent of a welcoming "Vacancy" sign in its Holiday Inn campaign. For that, the agency offered the artist a check that trumped a major-label advance, and let him keep his masters to boot.

But the offer didn't end there. As long as the agency continued to renew the ad spot, which it has, it had the option to essentially act as a label on Andrews' behalf, releasing the song on iTunes and financing production of its video.

Not only did the resulting deal pay for Andrews to tour, write and record full time, the Holiday Inn spot functioned as endless promotion, practically turning into hotel wallpaper on ESPN and other networks. Meanwhile, the infectious pop ditty inspired enough lyric-Googling to net him a seven-digit click count on YouTube — the stuff that major-label marketing dreams are made of.

"So, really, it was the best label deal in the history of the world," says Andrews, who spent 10 years in the trenches without attracting that kind of attention. "As far as I know, that deal was the first of its kind."

It's not lost on advertisers that nowadays, the regular man on the couch can hear a hook in a hotel commercial, do a quick Web search and then almost inevitably find a stream or MP3 before the game even comes back on. The only cost to the artist might be a hit in credibility — like the boos that greeted Lou Reed in the '80s when he licensed "Walk on the Wild Side" to Honda. In the pre-apocalyptic music world, there seemed almost no greater transgression of an artist's integrity than licensing songs for commercial usage.

But the times, they have a-changed. It's been more than two decades since Neil Young wagged his finger in "This Note's for You." Since then, everyone from the late Nick Drake to Jet has reached a broader audience through commercial use. Back in the '90s, the late comedian Bill Hicks zinged Jay Leno for doing a Doritos ad: "Here's the deal, folks. You do a commercial — you're off the artistic roll call, forever." Last year, Andrews' song "Bombs Away" was picked up for use in a Doritos commercial — bringing on another big payday, another deluge of Web traffic, and no apparent artistic blowback.

"Some people might say, 'Oh, you're selling out if you do a deal with this brand or whatever,' " says Andrews, who watched his net traffic spike like clockwork every Saturday after the spot aired during college football telecasts. "I've gone from having virtually no one know who I am, having no money, to having people interested and curious [worldwide], and I'm able to pay the bills."

Maybe it took the veritable Great Depression of the post-Napster era to obliterate the "sellout" stigma. Or maybe, as the digital revolution decimates the barriers between artist and consumer, the latter has emerged as a silent majority indifferent to corporate licensing. Whatever the case, "[licensing] has become maybe the first big money opportunity for a lot of groups," says Music Row business manager Jamie Cheek.

As a music-industry veteran whose clients include The Black Keys, Kings of Leon and rising Murfreesboro indie trio Those Darlins — who recently licensed their country-punk anthem "Red Light Love" to a KIA commercial — Cheek sees licensing as a weapon they can wield to their own purposes.

"When you do have so many licensing opportunities, many artists and their management teams try and accept those [as] a branding message that stays within the coolness of the band," Cheek says.

Such is the case, he says, with Music City transplants The Black Keys. The Grammy-winning, million-selling duo has an unassailable seal of cool, but that hasn't stopped them from racking up a roster of film, TV and commercial credits longer than their arms, including placements in Dexter, Entourage, School of Rock, Gossip Girl and Ghost Whisperer, along with ad spots for Zales and Victoria's Secret. The band even lampooned the breadth of their corporate conquests on The Colbert Report, where they battled equally enterprising Vampire Weekend singer Ezra Koenig in a mock "sellout-off."

For The Black Keys as well as Kyle Andrews, product and placement licensing form an invaluable marketing tool in the absence of regular rotation on music television and rock radio. Andrews concedes that in his case, there are opportunities he's potentially passing up by forgoing the major-label route.

But considering the industry's estimated 90 percent failure rate, he's confident that he's playing the right odds. Unless a label can hit a Kings of Leon-sized return on its investment, Andrews says, an artist faces a grim likely outcome — and "there's only been one Kings of Leon in the last 10 years."


That's hardly news to Ken Weinstein, the 25-year industry veteran whose company Big Hassle Media handles publicity for Kings of Leon, Nashville's world's-biggest-rock-band-next-door. However much the music-biz axis has shifted toward singles and downloads, Weinstein says, one thing remains eternal: the role of the traditional record cycle in promoting a new artist.

The artist, in other words, has to have something to push before you can push the artist. So in 2008, when Weinstein's Big Hassle colleague Chris Vinyard began working with then unsigned NYC singer Lissie Trullie, the company ended up going a step further in its duties than most PR firms. It founded a label to give its client something to promote.

At the time, Trullie had some buzz. But Big Hassle kept missing out on crucial press opportunities because she didn't have an album cycle to plug, let alone an album to plug it with. Believing they were "sitting on a powder keg," Weinstein & Co. didn't want to lose what momentum Trullie had. So they decided to bypass a label hunt, find a distributor and start their own imprint, American Myth.

"We decided that we would pool our resources and figure out a way to break artists that we loved on our own, but do it a very boutique, tasteful way," Weinstein says. "We already have the publicity machine."

Mere months after American Myth's establishment as a de facto division of Big Hassle — which already had management, licensing, publishing and online marketing branches — the label released Trullie's debut EP Self-Taught Learner. The singer was soon picked up by Downtown Records, a prominent major-distributed indie that's home to artists such as Gnarls Barkley, Scissor Sisters and Cold War Kids. Downtown released an expanded version of Learner in 2009.

Weinstein and his cohorts have since made three more signings to the label he describes as "partially 20th century, partially 21st century." Among them is Nashville indie-pop songstress Tristen, whose LP Charlatans at the Garden Gate was released in February to acclaim from Rolling Stone, NPR and The AV Club.

"I stuck my pocketbook out for her, something I've never done for [any other artist] before," Weinstein says. Bringing an emerging artist like Tristen to those outlets with such ease, he says, signals a paradigm shift from 20th century music media, whose agenda was driven by major labels.

"I kinda knew that unless I could get past a certain sales point, I would not be reviewed in Rolling Stone," says Weinstein, who cut his teeth in the '90s working publicity at indies such as Caroline Records and Beggars Banquet. "If you look at Rolling Stone today, or listen to any NPR show ... you don't even know the names of the labels most of the time."

But those old-guard tastemakers are now only a few of the many battlegrounds Weinstein must stake when publicizing an artist or a release. It's a whole new modus operandi of giving away MP3s outright — along with minding music blogs, Mark Zuckerberg creations and RSS feeds.

"The discovery venue is new, it's not so tied to the [industry trade journal] CMJ charts," Weinstein says, "What's happening on social media is as important, if not more important." If 1991's fanzine has morphed into today's Pitchfork, the new viral frontier echoes the 1980s golden age of college radio, dominated by no one sound, trend or band.

"There is no way to predict anything. Anything goes," Weinstein says. "And that's the beauty of 2011 — and the scary thing of 2011."

If the times are scary for a promoter or manager, imagine how it feels to an artist. Had an up-and-coming indie act such as Tristen decided to ink up with a major label, it's a near certainty that she would have found herself signing a 360 deal.

Also known as an ancillary rights deal, the 360 gained favor over the past decade with major labels, which could no longer ignore the steady nosedive of the traditional revenue stream — i.e., royalties from moving units. Desperate to slap a tire patch on a deflating zeppelin, labels sought new revenue sources as they waited for this whole Internet thing to blow over.

Hence the 360 — essentially a split revenue agreement between artist and label, in which the latter shares in what were once the artist's secondary revenue streams — merchandise, publishing, ticket sales, et al. In return, artists theoretically get a more desirable advance, marketing and tour support monies — along with an incentive for the label to advance their career.

"Labels were looking at the deal to save the industry," Music Row entertainment attorney Kent Marcus says of the 360 model. "Did it save the industry? No."

Marcus would know — he's credited as one of the 360's architects. In 2004, Marcus negotiated the first such deal, between then-unknown, fresh-faced Franklin pop-punk troupe Paramore and Atlantic Records.

Since then, the 360 model has become an industry standard, extending beyond record labels. Monolithic concert promoter Live Nation cut 360s that made hundreds of millions for artists like Jay-Z and Madonna. But for younger artists with no leverage, they are usually the only major-label option.

Marcus estimates that 90 percent of new major-label signings over the last three or four years have been 360 deals. Paramore's paid off — in 2007, their sophomore effort Riot! became the first album by a Nashville rock band to go platinum. Ever. But it seems they were the exception, not the rule.

"In most cases it doesn't work," Marcus says, "so all the 360 bullshit is irrelevant. When it becomes relevant, then hopefully you can renegotiate. How many young bands in a 360 deal have been in a position to renegotiate?"

Worse, Marcus says, is that the deal hasn't had the desired effect of promoting long-term artist development over a quick cash grab — or an even faster slash-and-burn if the label doesn't "hear" a single or move enough first-week units. When it comes to ancillary rights deals, that investment should be the point. Marcus says the majors still persist in seeing the new century's other, more robust opportunities as ancillary to declining record sales.

"Record sales — that's the ancillary income stream," Marcus says.

From the mid-'90s though the Napster era, major labels wrote their own requiem mass with a short-sighted, quick-hits-for-quarterly-earnings mentality, according to digital music entrepreneur Jeff Price.

"They stopped generating the back catalog that could've carried them for many more years," Price argues, "No offense to The Bloodhound Gang, but Hooray for Boobies probably isn't going to be a box set in the near future."

But when it comes to hawking digital downloads, Price says, record, ringtone and singles sales can be quite lucrative for independent artists. His Brooklyn-based site, TuneCore, is the largest distributor of online music in the world, representing 3 to 4 percent of digital music sales in the United States.

On TuneCore, rights-holding artists of any stature — from the neighbor who mixes his dubstep tracks in his living room to Aretha Franklin or Trent Reznor — can pay an annual recurring fee of $50 per album or $10 per single or ringtone to have their catalog distributed instantly to the world's major online music retailers.

That includes iTunes, eMusic, Rhapsody, Amazon MP3 and stateside-new-kid-on-the-block Spotify — the reason TuneCore co-founder and CEO Price calls his baby "digital music's FedEx." Artists keep their rights and a generous 100 percent of their sales revenue.

Price says he started the site in 2005 to take advantage of the virtual marketplace's unlimited shelf-space. He means to democratize the digital music industry, providing artists access to online distribution without gatekeepers or middlemen.

"Unfortunately for the major record labels, [the shift] to digital really, really screwed them," says Price, who also founded the now-defunct spinART Records. "So it allows someone like me to show up."

For artists, one of most attractive aspects of signing to a label, either major or indie, was access to worldwide distribution. But the seismic shift to digital caught short conglomerates such as Warner Music Group, whose fiscal matrix was records and CDs — the physical properties of a product that has since gone viral.

According to Price, it would take WMG 90 years to match the 10,000 to 20,000 newly recorded releases TuneCore distributes a month. True, the overwhelming majority of these were self-recorded and self-released by artists who would never have made it past a major label's sentry.

But Price claims TuneCore's plebeian constituency — i.e., the artists who wouldn't have made it to a major — has sold more than 400 million direct-to-fan units of music in the last two-and-a-half years. That translates into more than $250 million for independent songwriters and owners of masters.

Small wonder he strongly disagrees with old-guard gatekeepers who claim that it's difficult to turn a profit from digital sales.

"They're wrong," he says. Monetization is an issue on the labels' and publishers' side, he argues, not the artists'. He explains that TuneCore's model is not only free of overhead such as shipping, manufacturing, return and packaging costs, but the digital infrastructure makes tracking and auditing individual sales absolute — as opposed to relying on to performing-rights organizations or intermediaries that are neither transparent nor immune to human error.

"Nobody knows what they make, or how royalties really get calculated," Price says. "Nobody has a clue what a performing-rights organization pays, or how they figure it out. There is zero transparency. The new music industry is completely [transparent]."

But how does a listener decide which of those 10,000-plus TuneCore-distributed releases they wanna listen to each month? TuneCore competitor The Orchard thinks it has the answer: target marketing.

When it comes strictly to distributing music, The Orchard's business model differentiates from Price's come-one-come-all, Web-exclusive platform in a significant way: Its bread and butter is in partnership agreements with indie labels like Barsuck and Daptone. It's more exclusive, it's not open to all who want to sign up, and it's proactive in how it targets and markets to audiences.

Founded by Scott Cohen and Sire Records co-founder Richard Gottehrer in 1997, The Orchard grew out of frustration with the impenetrable force fields of major-label distributors — who also distribute many of the larger indie labels.

"It used to be that it was very difficult to get into a physical store," says The Orchard CEO Brad Navin. "Unless you were signed to [one of the five or six major distributors] you couldn't get in to those stores, so how could you be 'a professional musician'?"

The Orchard was initially a physical distribution vehicle for smaller indie releases. But Gottehrer, himself a producer and songwriter, had the foresight to seek digital rights as well. That effectively made his company the world's first online music distributor, pre-dating Napster by two years. As the music world self-digitized, they were ready to compete as part of a developing infrastructure of online retailers and social networks.

In the decade-plus since, the company — which has offices in New York, Los Angeles, and since last year, Nashville — has expanded its model to include digital video distribution, publishing administration, a creative licensing department and a marketing division that customizes iPhone apps.

"How do you change a large business and the economics it's built on overnight in a world where the barriers come down?" Navin asks. "You can say, 'Well, it's not been overnight, it's been over 10 years and they still haven't changed,' and I [wouldn't] disagree with you. ...

"Probably the 21st century major label is a tremendous marketing and A&R source. But who has to own the music? And what are the splits? How do artists make a living? I think the independent [labels] figured that out a long time ago. I don't know what happens with the big guys."


Perhaps hope for all lies in the cyclical evolution of the digital marketplace. Napster's instantaneous education of music fans set the stage for a new generation of virtual record stores.

Unfortunately for the music industry, Apple figured that out first. Since 2008, iTunes Music Store, which launched in 2003, has been the nation's No. 1 music merchant. For the better part of the past decade disagreeing platforms and devices confused customers with parameters: If you had an iPod, you'd need a Mac. (Not really, but people thought so.)

"The industry, whatever you wanna call it — we just haven't given the consumer a good experience," The Orchard's Navin says. "What does the consumer wanna do? They wanna push play."

But as computer literacy rates rise rapidly with new generations, the major players in the digital marketplace have grown more user-friendly. And new players are still emerging — so quickly that the ever-aggressive evolutionary cycle could come to threaten the digital retailers it spawned.

The looming threat comes from cloud-based subscription services, which allow users to store music libraries and playlists on servers, not unlike on-demand video provider Netflix. Mere years after announcing themselves to the world, they threaten to make direct-download music retailers like iTunes as obsolete as a video rental membership at Tower Records.

At this moment there's one word on the minds of music industry wonks: Spotify. Since launching in 2008, the Swedish streaming site, music retailer and smart-phone application is the biggest advent to sweep across Europe since the Euro. Like a combination of iTunes' playlist and storage features, Rhapsody's on-demand platform and Last FM's personalized social networking condensed into one sleek package, it's available as an unlimited access, $5 to $10 per month subscription service, or as an ad-supported free service. Listeners don't have to download the music to own forever, but they can listen to it forever from the cloud, as long as they remain Spotify subscribers. Six weeks ago Spotify launched in the U.S. to much fanfare — and in the industry, fear.

"It's an amazing tool, and the best thing to happen to music fans since Napster," Nashville festival promoter and manager Jason Moon Wilkins says. "The problem is, it's pennies on the dollar for getting what you get. It's gonna significantly decrease sales most likely."

But in Europe, where Spotify holds sway, Brad Navin says the cloudbank hasn't obscured The Orchard's business. "Our data never showed it eroding sales on iTunes, or leading download-to-own stores," he says. "It seemed to always complement, and in fact always lifted sales."

While the streaming model could revolutionize the way listeners consume music — and while that inevitably will make it an invaluable direct marketing tool for artists — how those artists stand to monetize that exposure is the industry's 64,000-cent question.

"Any active music buyer has historically spent more than $120 a year, even in the iTunes days," muses Jamie Cheek. "I don't have any doubt that, for [them], music is worth more than people are paying for it now."

For most listeners Spotify's monthly subscription fee should be an easy sell. But the site and app — which also doubles as an online retailer, distributed by TuneCore and The Orchard — or their contemporaries are going to have to recruit millions of U.S. users if artists, labels and publishers ever hope to see them become a bona-fide revenue source. That's because the royalty rate that trickles down to the rights holder per click is in the neighborhood of a penny per play, versus the 70 cents they get on iTunes. Only time will tell if those numbers amount to a new, viable industry.

But as a publishing executive who asked not to be named tells the Scene, "[The industry] has had to reset their expectations from an overall level — expectations on what's a hit, how much money [they] expect to make. ... There isn't the million-dollar publishing deal for a band that's getting signed to a record label the way there was 10 or 15 years ago."

Unless you're in mainstream country. Still the marrow bone of Music Row, country superstars like Keith Urban and Taylor Swift are still selling millions of records at big-box retailers like Walmart and Best Buy. Their audience finds new music the old-fashioned way — by listening to the radio.

"If you are a writer of a Top 10, Top 5, No. 1 country song, that is still big money, and if you are in that machine, whether it's through an independent or on a major, you're gonna see some immediate money there," Cheek says. "[On] the rock side ... [where] there's just not as many stations, the performance royalties are less."

Nevertheless, hip-hop, pop and rock artists of all stripes still have an exposure platform with the potential to be as powerful as radio or MTV ever was — YouTube.

Now mainstream media's viral-video kiosk, the combination crowd-and-corporate-sourced video-sharing site has become ubiquitous, integral in launching and re-launching the careers of artists like Justin Bieber and OK Go (and of course Kyle Andrews). Not to mention oddball diversions-of-the-moment such as Rebecca "Friday" Black and Antoine Dodson — you know, the "bed-intruder song" guy.

No less a record-industry kingpin than Epic Label Group CEO L.A. Reid recently signed an artist discovered via viral video. That would be Boston pop duo Karmin, who, unsigned, cracked 100 million views on YouTube after licensing their song "Take It Away" for use in 2011 NBA Finals promos. But Cheek isn't convinced. "Everybody's promising that big dollars will come from YouTube, you still hear that," Cheek says. "But I don't see it yet."

The Scene's unnamed music-publishing source says he does. Because of YouTube partnerships with music-video entities like VEVO, artists such as Lady Gaga, Justin Bieber and Eminem are making millions from their millions of views, he says.

"YouTube is becoming more than the means to an end, it's becoming the end itself," he explains. "Your music video never made you anything. That Britney Spears video with 100 million views made her money, it made writers money that was never [before] available."

And YouTube is paying big blanket licensing fees to the recording industry, which still ultimately has control over what intellectual property is allowed to stream on the site. Those fees are made possible by Google's $1.65 billion purchase of YouTube.

"It could actually have a pretty good impact on the music business," the Scene's unnamed source says, "Google had enough money to bring everyone to the table, but I think they've opened up what is currently probably the best and biggest distribution of music in the world."

Still, more than a decade into the digital revolution, not everyone wants to listen to music exclusively via Spotify streams, downloaded MP3s and viral videos. While big-box music retail chains like Tower Records reside in the 20th century's dustbin, mom-and-pop record stores are thriving again in many U.S. cities — thanks, ironically enough, to the booming resurgence of vinyl.

"Independent record stores have always been a niche business. [We've] never made [our] money selling hits," says Doyle Davis, co-proprietor of Nashville's own Grimey's New & Preloved Music.

Now an integral part of Nashville's cultural fabric, Davis and co-owner Mike Grimes opened the store in December of 1999, right at the dawn of the Napster era. "From the get-go we've always been competing against digital music," says Davis.

Grimey's didn't have to learn to adapt to the digital revolution. Instead, the fledgling store was forced to build its brick-and-mortar business model around it. It may have seemed an uphill battle at the time, but while the greater music industry continued to sink like a stone, Grimey's mostly stayed buoyant. Business did better and better each year, to the point where the store was even able to provide health insurance to full-time employees, many of whom are also full-time musicians. Then sales hit a plateau.

"I feel like we'd really reached a point a couple years ago where we'd figured our market out pretty well," Davis says. "We were this niche thing; we sell the 'indie' music, the music that's not available at the big-box retailers."

But as the lumbering competitors started to close down, their customers were disenfranchised. They had one place left to turn — and suddenly Grimey's was infused with new blood.

"Now we run out of Incubus the day it comes out," Davis says.

Last April, on Record Store Day — the retail industry's ingenious annual Hallmark holiday for limited exclusive releases, mostly vinyl — Grimey's celebrated the biggest single sales day in its 12-year history, beating its previous record by a staggering 72 percent. And the previous record was set on Record Store Day the year before.

"It's totally reinvigorated record stores," Davis says. "It's become bigger than Christmas for a lot of us."

That boom is mostly thanks to a growing trade in vinyl, whose sound and aesthetic qualities can't be replicated digitally. According to Nielsen SoundScan data, there were 2.8 million pieces of new vinyl sold in 2010, currently making it the recording industry's fastest-growing musical format.

And since it's now an almost standard formality for every new piece of vinyl to include a digital download card, the CD is almost obsolete. Almost. As Davis tells the Scene, used CD sales are also strong, since a $6 used CD is cheaper than a $10 album download on iTunes. "People can really do the math," he says.

So rapid is vinyl's expanding popularity, Davis says, that when putting in stock orders, "It's getting harder and harder to figure out what the right number is for vinyl, because it continues to pick up in sales." For many artists, he says, it has overtaken CD sales. The CD to vinyl ratio used to be 2 to 1. Now, for titles like the latest Decemberists album, that ratio has flipped, with the vinyl not only outpacing the CD in sales, but selling out completely within a week of release.

And in niche indie-genres such as garage-revival, like the releases on Memphis' Goner Records, that ratio is 10 to one. Davis says even big releases by CD-era artists like Wilco and My Morning Jacket are starting to even up. Many of those units sell to people who buy record players at the store and quickly become regular customers.

"To some degree, we're the last man standing," Davis says of Grimey's and independent stores of their ilk. And with social media platforms like Twitter — where the store has 10,000-plus followers — the digital revolution helps keep the store full on release days and for in-store events like concerts.

"One of the things the resurgence of vinyl has done for me, psychologically, is it makes me realize we can sustain," Davis says. "It's not a faddish, trendy thing. No matter what new gizmo they come out with, or new way of distributing music digitally, or streaming, or cloud this, or download that, I feel like I can run a store in Nashville, Tennessee, selling people music, with a robust, viable format.

"So, to me, the future looks fairly good."

Email editor@nashvillescene.com.

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