So Long, Box : Long-Awaited Move Makes Some Ask, “Who Will Pay?”

The record industry’s surprise recent announcement that it will phase out its controversial CD longbox package by April, 1993, has prompted a flurry of questions from environmentally conscious pop fans.

The most obvious:

* Why did it take so long to switch over to selling CDs in a smaller “jewel-box”-only format, as is already done in virtually every other country?

* Will this move mean yet higher CD album prices for consumers? Retailers, faced with remodeling costs in order to properly showcase the jewel boxes, have hinted they may pass those costs on to consumers.

Russ Bach thinks the answer to the first question is buried in his office desk drawer. As president of CEMA Distribution, which handles product for Capitol, EMI, SBK and Chrysalis Records, Bach has been one of the key players in the industry’s three-year search for an alternative to the bulky, cardboard 5x11-inch longbox, which has been frequently criticized as a prime example of wasteful packaging.

Bach said the National Assn. of Record Merchandisers (NARM) had asked record companies to devise a no-throwaway package roughly the same size as the longbox, which retailers thought would cut down on theft and allow them to display the new package without refixturing their store shelf space.

“I’ve got samples here of virtually every experimental package that some record company came up with,” said Bach, sifting through an assortment of failed longbox alternatives destined to become the music equivalents of the Edsel or eight-track tapes.

“To be honest, they looked terrible. There’s one with plastic struts to hold the CD jewel box open. There’s one where the CD slid out the top. There’s a hybrid package with a breakaway top. And here’s a cardboard-only package that . . . well, I’m not even sure how it works.”

In the end, the companies couldn’t come up with a practical solution.

“I think the decision to abandon the longbox simply came out of frustration,” Bach said.

The industry also had another incentive. Besides the threat of California legislation that would have outlawed the longbox by the end of 1993, record companies also faced criticism from their own artists.

In order to sign Raffi, a leading children’s artist, MCA agreed in 1990 to contractually stipulate that it wouldn’t release his CDs in a longbox. At Peter Gabriel’s urging, Geffen Records released his greatest-hits package last year in a jewel-box-only format.

Other performers, including Sting and Bonnie Raitt, put out CDs in storable longbox packaging last year. David Byrne’s new CD package, formulated before the phase-out announcement, has a sticker proclaiming: “This is garbage. This box, that is. The American record business insists on it though. If you agree that it’s wasteful, let your store management know how you feel.”

“The subject came up in a lot of conversations,” said Al Teller, chairman of the MCA Music Entertainment Group. “The sense I got was that every artist wanted the longbox to disappear.”

One other key factor leading to the demise of the longbox was an old industry bugaboo: The individual record labels were so competitive that no one could agree on an alternative.

Several foreign-based conglomerates, most notably PolyGram Records, whose Dutch parent company, Philips Inc., had invented the jewel box, favored the jewel-box-only package. Sony and the Warner Music Group, which own interests in paper packaging firms, pushed alternatives, such as Warner’s Eco-Pak, featuring paperboard that could be folded and kept by consumers.

“We thought the Eco-Pak was a viable alternative,” said Henry Droz, president of Time Warner’s WEA Distribution Corp. “We invested millions in developing it. But when it became clear that the jewel box was the only way to reach a consensus, we put that ahead of our own interest in the Eco-Pak.”

Finally, concerned by the slow pace of progress, the top executives of the industry’s six major conglomerates took charge. Once Warners announced its willingness to abandon its Eco-Pak, Sony Music, the last remaining jewel-box opponent, reluctantly joined the bandwagon.

On Feb. 24, the day before the Grammy Awards, the executives met in New York and agreed to phase out the longbox.

“A year ago, there was still a sense that there might be viable packaging alternatives,” said MCA’s Teller. “But the hopes for those alternatives had evaporated. We agreed that we’d eventually have to go all the way to a jewel box, so why not go now.”

The six major-label distribution chiefs now have the difficult task of selling this decision to record-store owners, many of whom are in New Orleans this week for the annual NARM convention. In the past, retailers have voiced loud opposition to the jewel-box format, saying it encourages theft, hinders merchandising and will cost millions in storewide refixturing.

The record companies can expect an earful. “I hope we stir up a lot of aggravation over this,” Russ Solomon, owner of the influential, 70-store Tower Records chain, said on the eve of the convention. “I not only think they’re wrong, but I resent the way it was done.

“The people who made the decision, the guys who run these international conglomerates, have probably never been in a record store in their lives. But they got together in some sort of secret star-chamber arrangement, without any conversations with us and took the coward’s way out.”

So far, Solomon and record executives agree on one issue: They say they want to avoid any agreement that would result in higher CD prices for consumers, especially at a time when record sales remain sluggish.

According to current industry projections, record companies would save about 25 to 30 cents per disc in packaging costs by doing away with the longbox. But with the costs of album marketing and promotion soaring, record company executives don’t see any likelihood of passing along any CD-packaging savings to consumers.

However, Solomon and other retailers would like to see the record companies use the savings to finance the changeover in their stores. To date, no one in the industry has suggested that prices will be raised to cover that cost.

According to Solomon’s math, the changeover costs in his 70 stores alone will total $8.5 million. “If you’re talking about the entire retail industry, you’re talking about $100 million,” he said. “I’d like to see the record companies pass their savings along to us, but I haven’t seen any commitments yet.”

Industry insiders predict the NARM convention will be marked by some noisy debates, followed by a cooling-off period and then a round of serious negotiations between retailers and individual record companies.

WEA distribution chief Droz sounded a conciliatory note: “There’s no question that we’re willing to contribute financially,” he said. “We intend to share responsibility with the retailers in making this decision work.”