Do you pine for a retail space that was important to you but is no more? We got a big response from listeners when we asked that question a while back. One of those missed spaces included Tower Records, which closed its last U.S. stores 18 years ago this week. The chain was much more than iTunes in brick-and-mortar form. For many, it was a kind of temple for worshippers of music.
The documentary film this month, “All Things Must Pass,” about the rise and fall of Tower Records, is a kind of rock ’n’ roll syllabus of teachable moments about money and business, including how to launch a startup.
The doc explores the importance of diversification: The record industry hit a soft patch when the glory days of disco were met with a backlash that impacted record sales. Then there is also geographic diversification: Tower Records in Japan is still thriving to this day.
We also see the scenes unfold of a morality play on the dangers of leverage, too much debt. Tower borrowed $110 million to finance global expansion, and when those creditors grew impatient for their money back, that was the end.
The lesson from Tower Records that most stands out for me is about a special kind of capital that does not involve dollars but is still valuable. Sociologists call it “social capital,” which accumulates when people get off their couches, put away their screens and mix in person. At Tower Records stores, people came together in a physical space to share passions, exchange ideas and explore new content. In an archival sequence from the film, you can see a ’70s-era Elton John on one of his weekly foraging trips to the Tower Records on the Sunset Strip in Los Angeles. The pop legend is dressed down, holding a pen and notepad, a man on a mission looking for all the world like a discerning chef choosing his greens at a produce market. One voice in the film observed it was “as much social as retail,” with people “spending hours together at the record bins.”
And one more lesson from the Tower Records documentary is about an up-to-the-minute economic topic: inflation. We are convinced everything gets more expensive all the time, either slowly, like it did in the mid-1980s, or quickly, like the crazy inflation we are experiencing now. Most things do get more expensive, it seems, except record albums. The film mentions that a record album went for $3.88 in 1962. But $3.88 is not a deal. According to my favorite online economic tool, the inflation calculator at the Bureau of Labor Statistics, $3.88 back then is like $38.30 now. I note that artist Beth Orton’s new CD can be had for as little as $13.59 if you want the physical object, not just ability to stream it. Like long-distance phone calls, some things do get cheaper.
– David
Econ Extra Credit Selection for October
Name of Film: “All Things Must Pass: The Rise and Fall of Tower Records”
Year of Release: 2015
Director: Colin Hanks
Synopsis: Established in 1960, Tower Records was once a retail powerhouse with 200 stores in 30 countries on five continents. From humble beginnings in a small-town drugstore, Tower Records eventually became the heart and soul of the music world and a powerful force in the music industry. In 1999, Tower Records made an astounding $1 billion. In 2006, the company filed for bankruptcy. What went wrong? Everyone thinks they know what killed Tower Records: the internet. But that’s not the story. “All Things Must Pass” is a feature documentary film examining this iconic company’s explosive trajectory, tragic demise and legacy forged by its rebellious founder Russ Solomon.
Where can I watch: “All Things Must Pass” is available to watch for free on YouTube. It’s also streaming on several platforms, including Kanopy and Hoopla for some library card holders, and on Peacock, PlutoTV and PopcornFlix, for free. A digital streaming copy can be rented or bought on several platforms, and if you want a physical copy, you can purchase the film as a DVD and Blu-ray too.
Themes we’ll explore:
- From retail floor to the C-suite: When do employees rise through the ranks at American companies? How common is it nowadays?
- Why physical music still sells in Japan while the rest of the world adopted streaming
- The joys and challenges of running an independent record store in the U.S.
Is there something you’d like Econ Extra Credit to explore? A question you want answered? Let us know by sending the team an email. We’re at extracredit@marketplace.org.
Check out all our past selected films on our website.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
