Their demise was a consequence of digital music’s ascent – the proliferation of MP3 music files, either being purchased or downloaded illegally; and the growth of online retailers with their massive product inventories. The core attraction of buying records in a shop – the conversations with staff, immediacy – also diminished in the face of mass discussion, knowledgeable staff, efficient delivery and the DJ recommendations and mixes offered by the online retailers. But while most bricks and mortar music shops have lost out in the rush to new digital music channels online, many dance music specialists are thriving, and their formula of selling niche releases to devoted genre fans is proving a recipe for success on the Internet, where specialist businesses can gain a foothold on global markets.

One of the kings of the online space is London-based Juno, which describes itself as ‘the world’s largest online dance music store’ and has been going since 1997; Juno initially developed a reputation as an online retailer selling dance releases on CD and vinyl, but it has slowly moved into the digital arena and now competes with other dance music e-commerce sites such as Beatport, BeatsDigital, AudioJelly and DJDownload, all of whom exclusively sell digital MP3s.

Nick Unsworth from Juno’s digital team says that while genres like tech house and minimal techno are extremely digital-friendly, there is still an identifiable market for physical releases in bass-centric genres like dubstep, where dubplates (or acetates) are still very much part of the lifestyle. Limited test pressings, dubplates were originally used by dub soundsystems in Jamaica; the format has been nostalgically kept alive through the lineage of drum and bass and then dubstep.

Beatport’s CEO, Jonas Tempel, concurs: “It’s very clear that drum and bass DJs prefer the heritage of vinyl and the culture of the acetate”.

But this culture is being eroded, as Juno’s Unsworth points out, in part thanks to software like Ableton, which enables DJs to play MP3s through MIDI interfaces and simulated vinyl.

“Part of that popularity for digital sales in certain genres could be down to the software they are played on,” he explains. “Generally speaking, 4/4 dance like minimal became popular with DJs using Ableton, because of the way the software worked. Now it has become more versatile, DJs from different areas are starting to use Ableton to mix.”

Minimal techno requires perfect mixing, with even the tiniest mistake breaking the spell and so Ableton was an obvious solution for DJs. It was nevertheless much derided when it first hit clubs, with accusations of deathly slickness, lack of artistry and unimaginative mixing being thrown at DJs who used it. But as market forces have seen digital releases triumph over CDs, so too the sentimentality towards vinyl is disappearing, further invalidated by ever-more sophisticated digital mixing techniques. “There was a badge of honour and authenticity about using records, but that’s no longer the case”, says Sean Bidder, editor of the dance magazine Fact. “Vinyl’s no longer a necessity. I don’t think anyone’s going to be frowned upon for using a computer or a CD”.

“The performance can, at times, feel a bit too ‘perfect’,” says Tempel, “but the reality is that this industry needed to progress. Digital content allows DJs to become producers in the booth and remix things live in front of a crowd – that’s something that was unheard of a handful of years ago.”

Digital may have broadened creativity and changed dance culture, but the same forces that battered the mainstream music industry – piracy, filesharing, lower margins – also affect dance music retailers. So why are they not suffering to the same extent? It seems there are a couple of major reasons why specialist dance music appears to be relatively immune.

The first is the importance of sound quality. Most Lady Gaga fans don’t demand perfect quality versions of her music; look at the decline of the CD, with its high-quality sound, in favour of lower-quality mp3s and streams that can be found inexpensively on iTunes and elsewhere. But many specialist dance music consumers are DJs, and to play out of a club soundsystem for a clientele who demand fidelity at every point of the bass to the treble, you need at least a 320kbps release, if not better. This kind of quality is not easily accessible on blogs or filesharing networks but Beatport and Juno meet this need, providing high quality files that have an accompanying higher price of £1.70 each.

“Beatport sells content exclusively tailored for DJs,” says Tempel. “It’s something that iTunes and other commercially focused retailers just cannot afford to do.” Beatport’s high quality and otherwise hard-to-find inventory has led to annual revenues of over US $20m.

Second, with sound quality an issue and many specialist tracks hard to find through filesharing networks, the ubiquity of free music online can serve to promote specialist retailers. Juno’s Unsworth sees the MP3 blog, one of the biggest sources of illegal downloads, as a boon for his business. An important arbiter of what is cool at any given moment, blogs can encourage consumer purchases, though only as long as the files they offer remain low-quality.

“Blogs bring a lot of traffic to Juno through upstreaming and in that sense we’re very happy, and they do get people talking about the music and releases,” he says. “Blogs that stream aren’t a problem. It’s when there are high quality downloads available weeks before a release is out. Labels feel it more than us, and it’s forcing them to change their approach to promotion. Some will not actually have a campaign now because leaks make the promo work redundant.” But there are simple remedies to this problem: dance labels like Border Community and Kompakt have taken the step of signing up to Ripblock, a service that scans the web for leaks of their releases before removing them, charged at £50 per release.

The popularity of digital files is also nurturing a second, smaller revenue stream for retailers: sales of covetable, limited edition physical releases. Richard Dawson, head of online retail at avant-garde music store Alt Vinyl in Newcastle, a bricks and mortar shop that has survived by diversifying into online sales, says a key element of his company’s success is in selling niche records and products to a committed fanbase.

“We sell unusual stuff, it tends to be the more well known underground acts which do well”, he explains. “If there is only a limited release and there are only 200 pressed, and we can get 20 of them, they are guaranteed to go.” The store’s own Alt Vinyl label produces records with lavish sleeves and liner notes, with MP3s as an extra; it’s a tactic that the dance community is starting to learn the value of.

Owning a rare and limited physical release is now an alluring selling point. The record may never be played in a club or even at home, but collecting, hoarding and adoring a release is a vital aspect of music consumption for frequent record buyers. Shops like Alt Vinyl demonstrate the benefit of pursuing an integrated music retail model that encompasses digital and limited run analogue products, and their success suggests that bricks and mortar retailers can survive if they adapt to supply the digital demand for specialist music.

Sean Bidder’s Fact magazine is part of a mini-empire comprising the respected dance retailer Phonica, who have an online store but don’t sell MP3s, and the limited-edition press company The Vinyl Factory, as well as providing event spaces, e-commerce platforms, bespoke web development and data provision. The Vinyl Factory illustrates how a specialist fanbase can be leveraged to make money from scarce physical products: they release small runs of extremely high-quality special edition records, costing between £20 and £300, from the likes of Air, Damon Albarn and the Pet Shop Boys, pressing them with the same machines that were used to create original Beatles and Sex Pistols records. In doing so, they’re tapping into a powerful sense of nostalgia and authenticity.

“The days have gone where you can put out bog-standard dance 12″s and expect them to sell,” says Bidder. “We operate in a niche market that’s about quality, craft; closeness with the music, art and experience. The magazine champions new and emerging talent, Phonica gives a bespoke selection of music on vinyl… [and] collectible, bespoke vinyl [from The Vinyl Factory] is something that’s tangible in the face of digital music.” The lesson is that successful dance brands must forge a niche, target the right people, and create a series of products – both digital and non-digital – to cater to their demands. The physical products need to have the highest, most lust-inducing quality though, and – crucially – scarcity.

Culturally, tastes are more diverse than ever, and an artist who’s relatively niche or cult or underground can actually get paid and doesn’t have to achieve some level of mainstream success”, continues Bidder. “As long as there’s a fanbase out there who are interested in what you’re doing, you can access those people through the Internet, in a way you couldn’t have done before unless you had a marketing budget.” Globally, more people are dance music fans and DJs than ever before, and that feeds into sales of physical products, as well as club tickets, merchandise and other ephemera (like Ministry of Sounds’ workout video line, complete with branded hand towels).

It’s not just retailers who are taking advantage: artists from Theo Parrish to Emalkay can now be bought, and indeed booked all over the globe thanks to raised online profiles.

They’re tapping into a small, localised niche that becomes a sizeable global niche online. Take techno artist Si Begg, who, as well as putting out free MP3s, self-released a recent project as a limited-edition £100 box set with laser-etched USB sticks, ‘records’ made of oak and rubber, hand-sewn packaging and giant textured posters – creating a strange, defiantly physical package that targets a small core of techno fetishists. Meanwhile, the free MP3s are widely distributed, raising Begg’s profile for bookings and production work.

While digital content may be killing physical stores, it’s saving and reformulating the rest of the dance industry. Aesthetically, the versatility of digital files is allowing for greater creativity in the studio and the DJ booth, and arguably the most exciting sonic innovations in the dance market of recent years – nu-disco, wonky, dubstep – have come from deploying digital aesthetics to established genres. But more importantly, retailers and artists are using the Internet to cheaply target a global niche of fans, and honing that niche to sell them high-value products – something that major labels, with their expensively marketed yet low-return products, could do well to take note of.

The dance music industry is cleverly playing off digital and analogue against each other within a defined niche: maximising the efficiencies of digital, and using those efficiencies to maximise the romance of analogue.

Photography by burn the asylum