CNN has an interesting article on the fate of the indie store in light of the competition the stores face from both big box retailers like Best Buy and aggressive online services like iTunes.

According to the story, there are about 800 fewer independent music stores now than in 2003, according to Clark Benson, founder of Almighty Institute of Music Retail, a market research group that maintains a database of retail music outlets.

Competition from "loss leaders" is part of the problem:

Big box chains often sell new releases and hit titles at a loss, and at a price that is lower than indie stores' wholesale costs from their distributors, Consumers want and expect new releases to have low prices, so indie stores get by on a very small margin on some titles while still coming in way above big box prices."

But indie stores still distinguish themselves, due to their support and contributions to musicians and independent bands. The story adds:

Everybody in my store is in a band, writing a comic, is working on a novel, they're in a touring band and [sometimes ask] 'Hey, can I leave for three weeks and go rock and then come back?'" Levin said. "They ask, 'Can I use the fax machine to book my gig? Can I put up artwork in the [coffeeshop]?' -- Can you imagine even asking a question like that at Best Buy?

You can read the entire article here.