A SONIC BOOM IN THE CD MARKET

The customer had a complaint.

He had purchased a compact disc of Fats Domino’s “Greatest Hits� in the Studio City store, expecting the original, ‘50s versions of the roly-poly pianist’s recordings like “Ain’t It a Shame� and “Blueberry Hill.�

But the music on the Domino package turned out to be more recent, less interesting live recordings of the old songs. The customer exchanged the package for another CD.

The fact that he was allowed to exchange the Domino CD wasn’t unusual. But he was surprised to learn that he could have saved himself the trouble in the first place by just playing the CD on one of the store’s two listening devices.

The customer was delighted.

Listening booths--a common feature in record stores in the ‘40s and ‘50s--are just one way that National Compact Disc in Studio City is trying to establish a place for itself in the booming CD business.

“A lot of times customers feel hesitant when we say they can listen to a CD,� said store owner Bob Brownell, 40. “They are afraid they’ll be obligated to buy it, or they say they feel guilty when they decide not to buy it. But we want them to play the CD. It’s our way of demonstrating that we can do things that the record stores won’t do.

“It’s part of our plan to offer a better, more comfortable atmosphere for people who are interested in just CDs. For some people, going into a CD-only store is like going to Disneyland or Fantasyland. They say it’s confusing to go into stores with video rentals and computer programs and audiocassettes. This is like a toy shop. . . . Wherever your eye looks, you see exactly what you want to see.�

CD-only stores aren’t new.

Compact Disc Warehouse, which opened in 1984 in Westminster, has been a pioneer in the concept. But public fascination with CDs (whose chief features are excellent sound quality and the ability to be programmed to play the tracks in any order) has led to a retail explosion.

Some facts: Tower Records, the California-based chain of superstores, reports that almost 30% of its music-dollar volume is already tied to CD sales. And the consumer boom still seems to be in its infancy.

In a post-Christmas survey of audio stores, Billboard magazine indicated that sales of CD players were up 400% over the same holiday period in 1985. Industry projections suggest that the number of CD players in the country could hit 10 million by the end of the year--almost double the present total.

All this activity has caused a race among retailers trying to carve a beachhead for themselves in much the way video stores have done--a smaller, customized alternative to the shotgun approach of larger record stores. Noah Herschman, director of marketing for Rykodisc (a CD-only label based in Minneapolis), estimates there are between 80 and 100 CD-only stores now in the United States--including a dozen in California.

Compact Disc Warehouse (14300 Beach Blvd.) has already moved into the franchise business, opening an outlet in Mission Viejo and forecasting the opening of as many of 50 additional CD-only stores across the country over the next 18 months.

The store’s approach also allows for listening booths, but on a more restricted basis--just used CDs and selected new releases--than the National Compact Disc store. Brownell, too, is already speaking of opening additional outlets in the Los Angeles area.

While National CD (11392 Ventura Blvd.) has other special features (including the buying and selling of used--or, as he prefers to call them, recycled CDs--special ordering and free cleaning of CDs), Brownell acknowledges that the most important element is selection. The shop now carries approximately 5,000 titles--a figure he expects to expand in coming months. Randy Sequeria says his Warehouse store has almost twice that many titles.

National’s basic $14.99 price is competitive with CD prices in record stores, but it doesn’t follow the lead of those stores when it comes to discounting CDs. Some of them drop the price of selected CDs to as low as $12.99. But price doesn’t seem to be a major issue with customers in National’s relatively affluent area. Said Brownell, “It’s not uncommon for people to take out their credit card and make $100 or $200 purchases. We’ve been toying with the idea of having shopping carts.�

Both National and Warehouse report a dramatic shift in the type of CD buyer.

“The entire CD market is changing drastically,� Brownell said. “It’s a whole new ballgame since Christmas. It is becoming very much mainstream. The (influx) of consumers into the market has resulted in a lowering of the average age of CD buyers and a broadening of the musical tastes.�

He said most customers fall into the 25-35 age range, with as many under 25 as over 35. Pop-rock now accounts for almost 65% of sales, with the rest divided fairly evenly between jazz/new-age and classical.

On CD-related issues, Brownell made these predictions: Digital audio tape, which is expected to be introduced in the United States this year, won’t cool consumer interest in CDs because the “tape will eventually wear and the players won’t offer the instant programmable feature of CDs.� . . . The opening of more U.S. pressing plants will allow record companies to lower the average price of new CDs to as low as $10 (from the current average price of $15) by the middle of 1988. . . . And more companies will follow Motown’s lead of offering two catalogue LPs in a single, regularly priced CD.

CD DIGEST: MCA Records has already followed Motown’s lead in the two-for-one CD competition. The label has issued more than a dozen such CD packages, featuring such artists as Jimmy Buffett, B.B. King, George Strait, Olivia Newton-John, Joe Walsh and Reba McEntire. And, more two-albums-in-one CDs are on the way. Among the artists: Elton John, the Who, Lynyrd Skynyrd and Don Williams. In addition, MCA will reach into the old Chess Records vaults for similar CD packages by Muddy Waters, Bo Diddley, Little Milton and Howlin’ Wolf.

PolyGram, too, will announce shortly an alternative budget-priced catalogue concept: a lower-priced single album.

LIVE ACTION: Paul Simon’s March 6-8 shows are sold out, so the Universal Amphitheatre has added a March 4 date. Tickets go on sale Sunday. . . . Tickets also go on sale Sunday for Alice Cooper’s March 21 concert at the Long Beach Arena with Megadeth.