The 48th annual NARM Convention (National Association of Recording Merchandisers) held at The Gaylord Palms Hotel in Kissimmee, Florida proved once again to be one of the most valuable music business events in the industry. Attendees included music wholesalers, retailers, one stops and distributors, as well as suppliers, labels, and others involved with bringing music to the retail marketplace.

The Nielsen SoundScan research presentation provided in-depth stats and information about trends within the music sales landscape. One fascinating tidbit was that despite the rapid growth of digital music sales they account for only 5% of albums that are sold in North America. Although it is obvious that revenue from the sale of digital music will continue to increase significantly throughout the upcoming years, at the moment an overwhelming majority of music is still sold through traditional brick and mortar retailers. However, the survival of traditional music retailers may depend on how they embrace the trend and if they are able to bring new and unique shopping experiences to the customer that the consumer cannot attain on their home computer.

The exhibit floor featured insight into possible business models and trends that would allow physical retailers to become involved in the digital sales market (beyond just selling prepaid digital music cards). One example is the DMT (Digital Music Terminal), a digital kiosk that looks similar to an ATM machine. However, instead of dispensing cash, these machines dispense digital music directly onto MP3 players. The unit would also allow users to view videos, band websites, and even order and print tickets for their favorite band’s show. The product’s manufacturer, The Daiki Sound (and their partners Concrete Marketing and Foreal) will share review with participating retailers. Revenue streams will come from music downloads, ticket sales, display marketing opportunities, digital advertising and custom band download cards. The company plans to roll out 25 machines during their beta testing within the US this year. A representative stated that in Japan this business model is already thriving.

The panel discussion: Partnering With New Players featured impressive leaders within the digital music playing field including: Lee Abrams (XM Satellite Radio), XM’s Sr. VP and CCO, Erik Flannigan (AOL Music), President and CEO of The Orchard (the world’s largest distributor and marketer of independent music), Greg Scholl, and Muze Chairman and CEO, Bill Stensrud, as well as others. The panelists discussed the digital music industry and also elaborated on their company’s role in the present day and the future. Keynote speaker Chuck D (activist and front man for the legendary Hip Hop act, Public Enemy), speaking from the artist’s perspective, discussed the importance of new revenue models for independent artists and how the digital domain should be essential in providing those opportunities.

Chuck also spoke about the difficulties artists have building lasting careers in today’s music industry. He focused on the current trend labels have enacted which include churning out artists without providing attention to developing those artists. He also pointed out the current, uneven control of the Hip Hop genre by major labels, singling out Interscope as a label that is dominating the genre. Chuck D spoke with passion and conviction as he made his case for allowing for varied options and alternatives within the Hip Hop landscape. Chuck is a pioneer in the realm of the digital delivery of music. In the 1990s he caused a sensation in the industry when he made an album, which was about to be released by Def Jam, available to fans for digitally. Several years ago Chuck also launched Rapstation.com, an online radio station that caters to the Hip Hop fan. He also currently heads Slam Jams Records, an independent label that has released digital only albums.

More photos from the convention:

Tony Samuel (Insomniac) and Lou Pearlman backstage during the awards ceremony.
Pearlman’s label Trans Continental Records in conjuction with Rocket Science hosted a performance featuring artist Jordan Knight (formally of New Kids on the Block). Jordan is promoting an upcoming album entitled “Love Songs.” The album features a duet with 80’s pop princess Debbie Gibson.

Iz-Real and Gen of the The Genetorturers posing for a photo during an MVD
(Music Video Distributors) party held to promote Gen’s new DVD.

Kool & The Gang proving that R & B and Soul are still alive during a
performance at the closing ceremony.