THE DEMISE of Sam the Record Man in Halifax is indicative of the impact that technology is having on businesses worldwide.

As technology changes the way people shop and buy, entrepreneurs need to create new business models to service the marketplace.

Sam the Record Man in Halifax was a landmark in many ways, maintained by the sons of its founder Sam Sniderman following the 2001 debacle that resulted in the closure of many of its stores across Canada. Today, the music icon is left with Toronto’s Yonge Street location, the jewel in the firm’s retail crown.

Owners argue that the music business is changing, and changing rapidly. There has been little time to respond to those changes in a way that can protect firms from financial fallout. Response has been hindered by failure to create a new business model for the sale and distribution of music.

The Internet has revolutionized retail. The problem with music retail is that, unlike selling books, clothes or furniture, music does not need to be distributed in a physical format; it can be sent as an audiofile. As a result, theft from illegal music downloads has eaten up industry revenue, and Canada is one of the top nations for illegally downloading music.

In 2004, the Organization for Economic Co-operation and Development reported that Canada had the largest file-sharing population per capita of any country in the world. In Canada, the piracy rate is 36 per cent, compared to 21 per cent for the U.S. and 27 per cent for Britain...

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