Music retailer thrives serving captive audience
NEW YORK (Billboard) - As music retailers struggle to stay in business, a Los Angeles firm is doing nicely targeting a demographic that gets bigger every year -- prisoners.
More than 2.3 million people were locked up in federal, state or local systems at midyear 2007, according to the U.S. Dept. of Justice, and they want their Michael Jackson and Pink Floyd just like everyone else.
Enter North Hollywood-based Pack Central, which runs a mail-order operation for about 50,000 prisoners. It stocks about 10,000 CDs and 5,000 cassette titles.
Cassettes account for about 60% of unit sales, since CDs are contraband in many prisons because the hard plastics can be used for nefarious means. The screws that hold many cassettes together are also verboten, so owner Bob Paris must manually remove them. A bigger problem is that the labels have largely abandoned cassettes.
Paris says he started stockpiling cassettes five years ago. "People thought I was nuts when I invested tons of money in analog prerecorded music on tape," he says.
He plans to order small runs of his best-selling catalog titles from cassette manufacturers, although some new titles would also sell well in the format, Paris adds.
Best-selling current titles include Lil Wayne's "Tha Carter III," Mariah Carey's "E=MC2," Usher's "Here I Stand," Rihanna's "Good Girl Gone Bad," Nickelback's "All the Right Reasons," Leona Lewis' "Spirit" and Lyfe Jennings' "Life Change."
Perennial sellers include Al Green's "Greatest Hits," Linkin Park's "Hybrid Theory," Michael Jackson's "Thriller," Pink Floyd's "The Dark Side of the Moon" and a best-of collection by the Stylistics.
Pack Central sends out its catalog twice a year, with monthly mailers featuring new titles. Prisoners pay for product through money orders or checks drawn on a spendable trust account set up by their family members.
But Pack Central has to be careful even here. "If someone, due to a math error, shorted us $1, we used to fulfill the order and ask them send us a buck extra the next time," Paris says. "But that is extending prisoners' credit, which felons are not allowed to have, since they don't have the capacity to enter into a contract. So we got into trouble for that and now have to lop off an item and refund them the difference."
Given the harsh business climate for music retailers, Paris is thrilled that his business has been flat for the last five years, with sales hitting more than $1 million annually.
"I have dodged every conventional bullet that has hit most music retailers," Paris says. "I don't have to worry about downloading, legal or illegally. The beauty of it is that prisoners don't have Internet access and never will."