The March 2004 Ann Arbor Observer magazine had an interesting story on what had become of the town's music/record/CD stores over the last four decades. I used to pick up the Observer regularly when I lived in Ann Arbor and then when I moved away in 1989, I signed up for a subscription that I've maintained to this day.
According to the article, Ann Arbor was at one time "the Midwest's mecca for recorded music buyers."
Apparently referring to various points in the span of time from the 1960s through the 1990s, the article notes:
"On Liberty Street there were the Liberty Music Shop, Borders Books and Music, Schoolkids' Records, and SKR Classical. Around the corner on State Street were Discount Records and Harmony House. Across campus on South University, there was Tower Records. At their peak, those seven stores alone took up almost 40,000 square feet of prime retail space and took in approximately $15 million annually."
Now, however:
"For the past couple of years, Borders has been the only store of the original seven still standing, and its music department is a joke among collectors..."
Schoolkids has survived also, but in a different location (below Bivouac on State Street) and with a new name, Schoolkids in Exile.
The article also notes that two venerable used-record stores, Wazoo and PJ's, have remained. (I remember meeting PJ.) There's also another used-record store called Encore Recordings.
Why the huge decline? As the article notes, the combination of online purchasing of CDs and downloading of music cut into the stores' business.
I bought a decent amount of music (cassette tapes) during my UM years, but was never a huge purchaser. My reaction to the changing nature of the recorded music industry would be as follows. Ann Arbor is a great walking town and being able to engage in window-shopping or actual shopping is part of the atmosphere. To the extent that music stores seem to be disappearing from this scene, then a portion of the town's history and social fabric will have been lost.