Hal Leonard: Continuing to Embrace Technology

“We’re always looking at ways to use new technology,” says Larry Morton, president of Hal Leonard. To emphasize this point, he and chairman/CEO Keith Mardak are more interested in another anniversary rather than the Milwaukee-based company’s  60th  birthday in 2007: “It amazes me that sheetmusicdirect.com was launched 10 years ago,” says Morton. While the first-ever worldwide downloadable program was initially was met with trepidation, “it has evolved into a substantial business, instigated a number of dealer partnerships, and launched other sites as well.”

Hal Leonard has now launched bandmusicdirect.com, orchestramusicdirect.com, and choralmusicdirect.com for choirs. “We’ve offered different ways for the dealers to participate in these programs,” he says. “And we’re just now launching a revolutionary new site, guitarinstructor.com, which will be the first major Web site to offer downloadable video lessons. It’ll have all the benefits of our DVDs.”

This newest site takes over 200 minutes of lesson culled from Hal Leonard’s library, and for $1.99 users will be able to download lessons on a specific technique like string-bending or fingerstyle, etc. and also download lessons on how to play specific songs from Hendrix, the Beatles, Nirvana, and more. For a mere 99 cents, audio tracks can be had, either in their complete form or minus the guitar track to play along with.

Like the rest of the industry, the print music business has been hurt by file “sharing,” and this is part of Hal Leonard’s response to that. “We’re trying to give the consumer a legal alternative,” Morton comments.

And where does the retailer fit into this?

“We went in up front and said we’re going to be offering two different dealer programs — an in-store program and a commission program,” he explains. “There are always going to be concerns, but those who are proactive will gain the benefits. We got dealers involved in the beta stages of this, and they were all important parts of the launch of the new programs.

“Since we first launched our digital business ten years ago, many dealers have fully embraced our digital retailer programs. We have more than 1,000 music retailers signed up in-store and online. We envision this part of business continuing to grow and we see the retailer playing a very important role in making more music available to more people.”

Their recently announced deal with Freehand Systems, maker of the Music Pad, was done because they believe the technology will continue to evolve and they felt it was important to support it. In what will certainly be attractive to retailers, if they sell a Music Pad to a customer, they will get a commission off every piece of music that player downloads on it. This, they hope, will encourage retailers to get involved with that product.

Despite all this downloadable and digital technology, however, Keith Mardak admits that “it hasn’t really expanded the market. It’s grown the business marginally, but often it just replaces traditional print sales. Today if people want a song, they will find it one way or another, however it’s distributed.” So to capture maximum sales, it’s now actually more important for dealers to get involved in the same way as consumers do as far as being open to  new distribution channels. As iTunes has proved, people are comfortable paying for music in different forms.

Not that recorded music is an apples-to-apples proposition.

“One of the negatives of the digital print segment is that the end product isn’t of very nice quality,” Mardak continues. “It’s printed from a printer that may or may not be great, it’s scotch taped or stapled together … .”

“A lot of people try to compare the digital downloading of print with recorded music, but it’s dramatically different,” Morton adds. “When you download a song from iTunes, it’s pretty much the same audio quality as a CD you buy in a store. That’s not the case with print music.”

Digital and Print Worlds Collide
In brief recap of their 60th anniversary year, Keith Mardak expresses sincere amazement that at this year’s Retail Print Music Dealers Association (RPMDA) Convention, held in Milwaukee,  three busloads of retailers started out at 7 a.m. to spend a total of eight hours on the road for a tour of the Hal Leonard printing facility in Winona, Minnesota. “It was quite a tribute to see so many wanting to take a tour of the plant,” he says.

The company’s continuing growth has lead to breaking ground on a new 165,000 square foot facility, which can be expanded up to 400,000 square feet in the future. Then that basically concludes the talk of the past, as Morton interjects: “It’s funny to talk about what we’ve done, because we’re really more focused on what we’re doing and what we’re going to do.”

The digital download and traditional print worlds are colliding as Hal Leonard offers CDs of their sheet music. Packaged like a 9” x 12” book and thus fitting in the tradition music retailer racks, the series features individual composers as well as specific music styles and genres. The budding musician buys it at the music store, takes it home, and plays from his or her computer screen. The user can also print out one authorized copy, and in many instances the user can transpose the piece. They’ve even been successful with packaging classical musical in this format as well.

Back in the traditional print world, Hal Leonard continues to produce an impressive amount of product, and to ride the ongoing trend of packaging books with CDs, CD-ROMS, and DVDs.

“Our jazz play-alongs have grown to over 80 titles,” Mardak says. “We offer it for piano, guitar, bass, harmonica, and we’re about to do more for accordion. And we’ve also recently launched our Master CD series. The book has 10 songs and comes with a CD that allows the mid-level to player to ‘sit in’ and actually play with these wonderful big band era recordings.”

Morton says one of the year’s highlights is their “RackNRoll” program. It came about for what they believe is a misconception about print music — that it takes a lot of time and a lot of space. “RackNRoll” is the latest example of the company demonstrating how easy they can make selling print.

“What we came up is a rack made of numbered pockets, and those numbers are tied to our computer,” Morton explains. “When a pocket is empty, all the dealer has to do is call us and say ‘pockets 10, 11, 15, 22 are empty.’ We send out their order and they get their Lynyrd Skynrd in pocket 10, Guitar Method 1 in 11, etc. They don’t have to think about it.”

“Another highlight this year is the continued growth of all our methods,” Mardak says. “The Hal Leonard Guitar Method 1 is on target to being the number-one-selling method in the world, and our band and string methods are both number-one in their categories. Our piano method is on track to do the same.” He adds that the addition of the Thompson piano method and the Teaching Little Fingers series are strongly contributing to their success in this segment.

Mardak expressed excitement at the recent addition to G. Henle to the Hal Leonard family. The respected classical music publisher is now exclusively distributed by the company, and fits in well with their other properties that include Schirmer, Schott, and Boosey & Hawkes, among others. “It’s been a very strong year in the classical area,” he says.

“Extremely Focused”
It’s hard to not notice that the company has been especially open to acquisitions, partnerships, dealerships, with publishers old and new, big and small, which Mardak acknowledges. “But we don’t target publishers,” he says. “Mostly, we get approached by these companies. Because the network of retailers is so vast, it’s hard for a smaller company to keep up. We are of a size that allows us to reach and get product out to all these dealers in an efficient manner. “We’re extremely focused on a pretty specific area of the music business and we work hard at it.” An example is that they are the only publishers open seven days week because “the retailers are working seven days a week.” And he says they were the first publisher to get aggressive with offering dealers the option of doing business with them online, 24/7.

“The more we support retailers, the more they will sell,” Morton says. “We joke about this, but the people at Hal Leonard either wash out in a year or stay a long, long time. We train the hell out of our people.”

Hal Leonard continues to expand into the trade book business, especially the music reference category. By acquiring publishers like Applause, Amadeus Press, and Backbeat Books, they can expand their offerings to retailers. Morton says that some retailers feel stocking these books isn’t right for them because the titles are “too specialized.” But if a store carries music books that require people to read notes on a staff to varying degrees, obviously everybody walking in the door is a potential customer on a book about the Beatles or Frederick Chopin.

Then there is their magazine Music Express, which they say is successfully targeting the K-6 classroom music teacher. Teachers pay $200 a year for six packages that arrive every other month. Included in the package are 30 student books, a teacher guide, and a CD. The material is reaching over 10,000 schools a year, helping more than three million students every other month learn more about music.

“We’re introducing artist, music styles, and making it easier for the general classroom music teacher to introduce different artist from different periods and styles of music,” Morton says. It’s important because they are able to use their expertise to lay the seeds for people to want to start playing. “It’s all critical to creating tomorrow’s customers. They go through and get excited about music, and hopefully pick up an instrument.”

Looking out at the state of print music in general, Mardak sees healthy trends.

“Music today is more melodic,” he says. “For a while it was a pretty tough market. But now there is a big Broadway revival, and Disney’s High School Musical has just been incredible, to give just one example.” Adding to that list of trends is contemporary Christian music, which, while not a newer trend, continues to grow.

“When the economy is tough, we do okay,” Mardak points out. “People aren’t necessarily spending money in the same way and tend to spend more time doing things like playing instruments. That means they are buying more music and that seems to fill a void. And today we have a whole new set of dealers than we have had in the past.”

“These are clearly challenging times — not only for our industry but the general book trade as well,” Morton adds. “Still, we’re running ahead of last year and last year was our biggest year in history. What we are finding, though, is that we just have to work a lot harder.”