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"We like to believe what’s best for retail frequently is what’s best for everybody."
——Pam Horovitz, NARM President
BACK TO THE FUTURE
An Exclusive HITS NARM Dialogue With Organization President Pam Horovitz
It’s been a tough year for the music business and record retailers in particular, but NARM President Pam Horovitz is taking a pro-active approach to solving the industry’s problems. Last year’s summit, which took the place of the fall convention, began addressing some of the issues that have been moved to the front burner at this year’s confab in Orlando, including singles, copy protection, digital sales and the relationship between the record labels and the retail community. For the first time in years, this year’s convention will once again feature product presentations. And, with next year’s convention slated for August, the 2003 edition of NARM will mark the end of an era, but the beginning of a new one. Horovitz hopes that this annual chat with HITS’ retail guru Mark "Missing" Pearson will soon be a thing of the past as well.

After 9/11, you took a hard look at the fall convention and introduced the new summit. Was it a success?
The issues got identified and we’re finding ways to follow through on them, by examining the structure of how NARM conducts its work. The impact of the summit will eventually be seen in how we conduct the convention and our committee work.

Singles sales seem to be one of the largest issues. Most of the majors have weighed in on this in a positive way.
That’s the good news. Singles took awhile to die out and they’re taking awhile to come back. But we’ve been really encouraged by the receptiveness from all of the companies to talking about it with us, at least. And I think that the companies have been very willing to take a look at the economics, the timing, the cannibalization issue, the charts issue all of it. There has been a significant number of discussions, both between NARM and our companies and between individual retailers and wholesalers and the supplier community.

What other issues were dealt with at the summit?
There were a number of piracy-related subjects. Certainly copy-protected CDs came up. Not only how to achieve content protection, but also to do it while still having a product that the consumer wants. Also, how do you properly identify a copy-protected CD? So that the store personnel knows exactly what they’re selling. And if it’s something that won’t play on a PC, for example, how do you let the consumer know that up front so they don’t end up getting something home that doesn’t work in the environment in which they’ve chosen to play music. One of the things that was helpful was that we had put together a list of principles that we thought were important, in terms of moving forward. Not just disclosing what’s going on and what the limitations are, but also seeking to make sure that ultimately you’ve got a technology that is transparent to the consumer. That is playable on the widest number of devices. And I think that the companies have been happy to learn that’s a view that the companies, by and large, share as well. Having the dialogue and if nothing else, reaffirming that in most cases the thinking was the same, was helpful.

Was the new digital distribution alliance with retailers, as pertains to Echo, dealt with at the summit?
The Echo discussion actually started at the previous convention. So that was something where the concept was there—really a year earlier. But was the summit useful in terms of reminding the labels and distribution companies that digital distribution was a music format that their retail and wholesale customers would want to be a part of? Yes, of course it was. And we did.

The main convention itself is undergoing gargantuan change. This will be the last spring edition before the NARM convention moves to August.
The major impetus behind the shift came at the request of the major distribution companies, who looked at August as a more logical springboard to build momentum for fourth-quarter releases. There was also the possibility of having, not just senior management buyers at the convention, but more of the middle management and even some of the local people at the store level, for whom a product presentation could lead back more directly to the consumer. The distribution companies and the retailers were perfectly comfortable with the March slot. But they were willing to give the new date a shot.

I understand product presentations are returning to this year’s convention.
It’s a chance for companies to use the convention again in a way that it really was used for a period of years. And that is to put the spotlight back on publicly presented material. There’s actually going to be a little bit of a mix. The DVD Audio folks are going to be doing a little something that will actually be interesting. We’re not doing a full-blown rotation. There’s flexibility this year for companies, obviously, to continue doing stuff on the trade-show floor, or in the suites with private meetings. We’ve offered up a little bit of everything this year, because it is a little bit of a transition year where we’re looking to both reintroduce product presentation and also get a feel for whether the marketplace still supports this. To make sure we have a place for somebody who needs a big splash out to the industry as a whole, as well as preserving the small stuff.

WEA sponsored the first night of Club NARM. Which harks back to the originator, the PGD Zone.
Yes, and will we be surprised if somebody scratches out NARM and puts in PGD? No, we will not! And will some of us probably try to bring those old shirts and wear them just to be smart-alecs? Probably, we should, huh?

This seems like the first year in a while where you have a full slate of music once again.
Jim Donio has done a terrific job staying in contact with all sorts of companies big and small, indie and branch, reminding them that this is a great place to showcase music. And on the other side of the coin, it’s terrific the degree to which companies have responded by bringing in some cool acts. Some years you just hit the timing right so that you can get somebody like Kathleen Edwards just as she’s breaking. Last year, we had Josh Groban and we hit Whitney Houston just as she was exploding. So we get lucky sometimes. And this certainly appears to be one of those times where there is not only going to be music, but it’s really exciting music.

NARM has been bolstered with support from Microsoft this year.
Our trade show is a funny animal. We are not a convention that’s primarily a trade show and we make no bones about saying that. And while they certainly have been bigger in the past, we’ve all reached the conclusion that we just aren’t an industry, nor are we a group that’s ever going to be primarily a trade show. We have a healthy-sized trade show this year. Is it in a convention center? No. But for our group, the Orlando Marriott has probably one of the best set-ups, where the trade show is convenient to the ballrooms, where most of the action is and down in the area where Club NARM will be. We do have a customer base that has shown a willingness to diversify into other product lines in the past.

What do you see as the largest issues facing the music business in general and how can NARM show its support?
This is an industry that’s undergoing tremendous change. We’re a mature industry with much of the same consolidation faced in other industries, but we’re also an industry where the very product itself the delivery mode and the economic modelare all in the process of being transformed as well. When you have that kind of major change going on, not surprisingly, there are a tremendous number of viewpoints about how best to manage that change. I believe it’s incredibly helpful to have a place where you can get everybody together on neutral ground, as it were, to advocate not just what’s best for their company, but what’s best or perhaps doable by the industry as a whole. NARM really is one of the few places where we can pull everybody together to talk about the issues. And while we make no bones about advocating what makes the most sense from a retail point of view, we like to believe what’s best for retail frequently is what’s best for everybody.

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