The Daily Swarm - ShockHound: Hot Topic launching MP3 store...

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June 30, 2008

ShockHound: Hot Topic launching MP3 store...

Hot Topic, a chain of stores that sells clothing and accessories inspired by music and pop culture, plans to start a digital music store called ShockHound. By the time it is introduced in August, ShockHound will have permission to sell MP3s from at least three of the four major labels, the company says, as well as hundreds of independent labels.

Hot Topic is starting ShockHound with a very different strategy from its competitors. Like most online stores, it plans to sell songs for 99 cents and albums for $9.99, prices at which profit margins are low. But just as Apple uses the iTunes store to drive sales of high-margin iPods, ShockHound is trying to use MP3s to help sell the kind of profitable band T-shirts and accessories it carries in stores.

“For us, music merchandise is where the profit is,” said Hot Topic’s president, Jerry Cook. “The reason we carry CDs in the stores is that to be in a music-centered business and not have music would be a contradiction. And you can’t be an online music store and not have MP3s.”