RECORD MERCHANDISERS CALL PAYOLA ‘NON-ISSUE’

Even as every major record label scurries to distance itself from charges of payola, record retailers--in town for the annual convention of the National Assn. of Recording Merchandisers--maintain it’s a “non-issue.”

But recent charges of organized crime links to label-connected independent record promoters are already beginning to cast a shadow over the convention opening today at the Century Plaza Hotel. Those planning the gathering, which continues through Monday, had hoped to concentrate on the retail-entertainment industry’s apparent rosy future with the advent of CDs, VCRs and the like.

Nonetheless, Jack Eugster, association president, acknowledged that the payola issue would “doubtless be talked about” at the four-day get-together. He denied that the independent promoter allegations seriously affected the retail industry.

“NARM doesn’t really have much to do with independent promotion,” he said, “so it’s pretty much a non-issue for us. Still, if it means the labels will spend more in-house promotion dollars on in-store activity, that wouldn’t be a bad thing to take away from all the troubles.”

In the wake of this newest rash of payola investigations, the recent controversies over explicit rock lyrics, home taping of record albums and pirate record sales that came up at previous conventions have receded into the background somewhat, he added.

“The whole record ratings thing isn’t an issue for us at the convention this year,” Eugster said. “There’ll be talk about it, about all those old bogeymen, but--even if it’s a little naive--we’re thinking of the future as much as we possibly can.”

Eugster, president of the Musicland Group, a chain that operates about 450 record stores, said that substantive changes are going on at the typical neighborhood record store--changes that will turn it, he said, “into an entertainment mecca.”

“Records are still the mainstream product, no question about that,” he continued, “but there are so many new formats and new media floating around, no one product is dominant anymore--they’re all intertwined and work with each other.”

However much the promotion scandal may affect the convention’s tone, the theme of the National Assn. of Recording Merchandisers meeting, with 1,700 industry people expected to attend, remains “A New Look, a New Listen.”

The importance of the look (read “video”) compared to the listen was intentional: Video has changed the face of entertainment retailing, Eugster asserted.

“Music videos, MTV, rock ‘n’ roll movie sound tracks--all these and more are reinforcing excitement at the point of purchase,” he said. “Audio and video really are coming together in a lot of ways we couldn’t have foreseen. Record stores are beginning to reflect this, because while music is still the major product we sell, the media through which it’s sold have changed considerably.”

Another right-now area of excitement, Eugster added, was the surprise success of the compact disc format. He attributed heavy radio use of the format and its superb fidelity as two of the reasons for its retail triumph.

“But it also presents something of an organizational difficulty for us,” Eugster continued. “Having been overenthusiastic previously over new reproduction formats, we’re gun-shy of getting behind a new technology.

“Yet the success of CD can’t be overlooked, and you’ll see more and more of the machines and the recordings being sold that way. And the labels are really getting behind them. We think it’ll take off like videocassette recorders did a few years back.”

One of the results of this multi-pronged assault on the marketplace is the broadening of musical tastes: From the radicalism of the ‘60s and the fractiousness of the ‘70s, there’s a kind of consensus in the ‘80s, Eugster said. Witness the huge sales of Bruce Springsteen, Madonna, Phil Collins and others and the simultaneous flourishing of specialty labels like Windham Hill.

“I think the country’s open to a wide range of music right now,” he added. “Nothing is particularly hot now--in other words, dominating the retail market--but something will probably catch on like that any time now.”

Indeed, compared to recent years, the retail music industry is quietly excited about the kinds of growth and avoidance of controversy (until recently) it has seen in the past year.

“We’ve matured a lot,” Eugster said. “Instead of existing solely for the artist’s product, like we did in the ‘60s, or chasing after demographics, we’re comfortable now with being somewhere in between.

“Video sales are going to become a very significant part of our business, just as rentals are now. But I’m not too confident about the future of the little guy in audio and video sales and rentals, though he’s flourishing here in Los Angeles.