Jul
22

Serving a Captive Audience

North Hollywood-based Pack Central is a mail-order music operation. But don’t bother trying to google them because they don’t have a website or a blog online. If you want to place an order you better be prepared to write a letter and mail a check or money order for the products you want to order from them too. Oh, and what they offer, by the way, isn’t the latest technology or the biggest selection of music. All Pack Central currently sells is about 10,000 CD’s and about 5,000 cassette titles.

In an industry that is changing at lightening speed, because of all of the changes in music technology and ways to deliver music, Pack Central, as a low tech business, is vibrant and growing. As music retailers across country are struggling to stay in business, this Los Angeles firm seems unaffected because their target demographic is getting bigger every year — prisoners.

Serving over 50,000 prisoners annually, Pack Central sends out its catalog just 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.

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 Mariah Carey and Pink Floyd just like everyone else.

According to owner Bob Paris, “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”, says Bob Paris.

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.

Bob Paris 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.

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.”

Ideas come from the most unlikely places and from this business example don’t require necessarily being on the cutting edge of anything or by inventing the latest greatest newest thing. What a good business concept requires is a great innovative idea, attached to a market segment that you can serve well, as Pack Centrals business model demonstrates.

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