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Independent Music Stores Survive Amid Digital Downloads

Despite the explosion of digitally downloaded music, avid collectors are keeping the market for CDs and music stores alive.

"CDs are necessarily like a 'master' copy of a record, compared to any digital file format, " said Marc Weinstein, co-owner and co-founder of Amoeba Music, an independent music store with locations in Los Angeles, San Francisco and Berkeley. "Collectors who truly love a particular artist tend to want to have a 'hard copy' of their work … LPs, even more so. The fidelity, the artwork, just cannot be beat."

Amoeba Music and other independent music stores—and their collective encyclopedic knowledge of music—help keep their doors open, despite the growing number of consumers, who use Google or Apple iTunes to purchase music, often one single at a time.

Yinka Adegoke, deputy editor of Billboard magazine, cited figures that put digital transition into perspective. "In 2004, the first full year of iTunes, the music industry sold 665.4 million CDs and 5.5 million digital albums, " or digitally downloaded albums, he said in an email. "In 2011, the music industry sold 223.5 million CDs and 103.1 million digital albums."

Despite the migration to digital downloads, brick-and-mortar independent stores serve as community gathering place for music lovers.

"[Physical retailers] still serve as a hub for their local community, for those who love to congregate and flick through the physical product, " Adegoke said. "There will still be physical music sales five or 10 years from now."

In addition to music knowledge, a vast inventory helps attract and keep customers. "We operate as an independent store, so we have a lot less overhead, and we pride ourselves on retaining staff, people who have been here for years and are very knowledgeable, " said Sue Bryan, general manager of the media and musical instruments division for New York City's J&R Music and Computer World. "We're able to offer better pricing, and we're able to negotiate good deals with our suppliers."

Loyal customers

Passionate customers often translate into loyal customers. "We were always so much more than a store to our core customers. They are very loyal and they love the environment where there is so much passion for the subject on both sides of the counter, " said Weinstein of Amoeba Music.

But passion doesn't always keep a business open. Colony Records was a New York City institution known for its employees' ability to locate a record or CD after hearing a customer hum a few bars. The store closed this summer after 64 years. Email us at SmallBiz@cnbc.com and follow us on Twitter @SmallBizCNBC.

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