Music to a Customer’s Ears : Retail: CD buyers can hear them first in stores run by pair who devised the listening posts for a UCI business class.

It started out as an innocent class project for a business course at UCIrvine.

David Hurwitz’s and Jeff Walker’s concept of installing in-store listening bars that allow customers to sample compact discs before buying them not only earned the fraternity brothers an A, it catapulted them into business and helped add a new wrinkle to the music industry.

In the past five years, Hurwitz and Walker have opened two music stores, each with more than 20 listening stations, where customers sit and listen to CDs before plunking down $16 or so for a typical album.

“There’s plenty of discs that people don’t know, and it’s better to rely on your own tastes rather than a catchy album cover or one song on the radio,” Hurwitz said.

Now, a multitude of music stores and other retailers have installed posts where customers can don headphones and listen to anything from Snoop Doggy Dogg rap to Green Day alternative-rock to classic Beethoven.

“Today’s environment is extremely competitive,” said Robert Gold, director of marketing for Warner/Elektra/Atlantic, a major record distributor. “We are all competing for the consumer’s dollar, and when they can listen in advance instead of just on the radio, it will improve sales.”

Hurwitz and Walker actually revived a feature of record shops in the 1950s. Customers in that era could go into isolation booths and test out the latest singles.

Their CD Listening Bar stores in San Juan Capistrano and Irvine created a more congenial setting that features a horseshoe-shaped bar equipped with elevated leather seats, headphones, disc players and “bartenders” who fill customers’ music requests.

Fresh out of college, Hurwitz and Walker borrowed $500,000 to open bars that served up CDs rather than alcohol or even soda. Their parents co-signed the loan.

Record distributors have discovered that listening posts can help unknown artists climb the sales charts.

“It has been a delightful thing for business,” said Christos Garkinos, vice president of marketing for Virgin Records, a leading producer that also owns high-profile music stores in Costa Mesa, Hollywood and Sacramento. “We use the listening posts to expose people to music that they haven’t heard.”

Now, other retailers are starting to install listening stations to attract shoppers.

Torrance-based Wherehouse Entertainment, which has 347 locations nationwide, will begin placing 140 automated listening stations in its stores by the end of June. Customers will have access to 14,000 CD titles without the assistance of an attendant, said Helen Holmes, vice president of sales and operations.

When Tower clothing unveiled its new spring line in April at Nordstrom’s South Coast Plaza store, Tower installed listening posts stocked with Warner/Elektra/Atlantic CDs. The new feature proved so popular that Nordstrom plans to add listening stations in the fall at its stores in Chicago and Portland, Ore.

“Retailers want to entertain their customers,” said Linda Sadeghi, the 42-year-old co-creator of Tower clothing, based in Costa Mesa. “People want to be stimulated, they don’t want the same boring shopping arena anymore.”

At the same time, the record companies hope that shoppers will saunter on to the music store a few doors down and pick up the disc that they just heard.

“If they are going to buy clothes, there is a good chance they will buy our product while shopping,” said Brent Gordon, a top executive for Warner/Elektra/Atlantic. “We can notice a difference in the [sales of] titles that are in the listening spots.”

Bookstores such as Michigan-based Borders, which has opened several super stores in California, have also added the listening posts to their expanding music business.

Borders in Mission Viejo will be soon add about 60 “listening opportunity stations” up and down the aisles. Each station will offer a selection of three to five CDs, but staff members will allow customers to listen to any other disc in the store, General Manager Ed Mitchell said.

Frank Yien, a 34-year-old software engineer, recently spent his lunch break listening to CDs at Borders. He says he carefully listens to several cuts on each disc before deciding on a purchase.

The market isn’t limited to teens or young adults. On a weekday afternoon, Borders listening posts are occupied by business people as well as older men and women on leisure time.

Ken Swearingen, a 60-year-old, recently retired Saddleback College football coach, spent a chunk of the afternoon listening to CDs but didn’t plan to buy anything. However, after queuing up a Boy Howdy country selection, he changed his mind.

“I always end up buying something,” Swearingen said.

Meanwhile, former UCI students Hurwitz and Walker haven’t been left out of the profits. They expect to pay off their $500,000 in bank loans in about a year and are planning to open a new store in Huntington Beach in 1996. In addition, they now have a wholesale business that supplies CDs to 60 other music stores, mostly in Northern California and Colorado.

At a recent CD Listening Bar sale on a weekday morning, the bar was full of eager customers rifling through the stock looking for top titles.

But few were willing to take a chance on a purchase without hearing the CD first.

“You have to listen to what you buy,” said Phil Nigash, a 30-year-old photo technician from Irvine. “You don’t want to eat it after you have just spent 15 bucks.”

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Listen Up

Compact discs accounted for 51.6% of the albums sold in record stores in 1994, despite a slight resurgence of interest in records among fans of alternative rock. Cassettes followed with 34.4%. National sales by album category, 1993-94:

1993 Sales 1994 Sales 1993 % of Albums (in thousands) (in thousands) % change total sales Compact 304,303 368,300 21.0% 44.5 discs Cassettes 267,700 245,656 -8.2 39.2 Records 342 625 82.7 0.1 Other 35 90 157.1 0.0 Total albums 572,380 614,671 7.4% 83.8*

1994 % of Albums total sales Compact 51.6 discs Cassettes 34.4 Records 0.1 Other 0.0 Total albums 86.1*

* Does not include sales of single records, cassettes and compact discs

Typical Customer

The CD Listening Bar attracts a broad range of listeners, but a typical customer profile emerges:

* Age: 18-35

* Gender: Evenly mixed

* Favorite FM radio stations: KROQ (106.7), KLOS (95.5), KSCA (101.9)

* Buying habits: Adventures beyond radio playlists, has extensive CD collection

CD Facts

* Introduced in 1984

* 42% of American households have switched from turntable to CD

Source: CD Listening Bar, SoundScan; Researched by JANICE L. JONES / Los Angeles Times