A few years ago I stumbled upon a pretty neat record store in Reykjavík and asked on this very site if it might just be the best in the world. That was a rhetorical question if ever there was one. But I still ask myself why I had to go to Reykjavík – the world’s northernmost capital and a place pretty far from anywhere – to find an Aladdin’s Cave of musical gems and fresh retail thinking; a store that felt perfect for anyone with a properly open mind and something other than a computer or phone on which to play music.

Reykjavík is a huge, bustling metropolis – a sprawling São Paulo of a town – when compared to the tiny assemblage of streets that is Tórshavn, marooned between the Norwegian Sea and the North Atlantic on the Faroese island of Streymoy. Tórshavn is the world’s smallest capital. But it has a record store that would put many in London and New York to shame, and rivals even Reykjavík’s 12 Tónar for the individuality, diversity and dedication of its offering.

Tutl Records, in fact, is more than a record store. It’s also a record label, a ticket agency, a performance space, a common room, and to some extent a living museum of Faroese music. Its founder and director, the composer Kristian Blak, describes it as ‘an Embassy’ for the musical life of the islands. ‘There was a time when the Faroes were marketed as a destination using fish and mountains’, says Blak. ‘Now it’s marketed via fish, mountains and culture. We get high-class tourists coming here who are interested in the cultural life of the place. They’re not here for the sun.’

With the help of a huge wraparound frieze that adorns the wall of the shop itself, Blak and his staff can offer visitors a potted history of Faroese music from the Ballad tradition through the Reformation right up to Sunleif Rasmussen and Eivør Pállsdóttir, the country’s biggest musical exports today. In the summertime, the shop’s front windows open outwards café-style so that live performances – they take place every Wednesday at 4pm – can spill out onto the street.

On a gloomy Friday in March, I attended one of Tutl’s weekly launch parties. Yes, you read that right: the store’s in-house label launches on average one title a week and cracks open a few cans of Föroya Bjór every Friday at 7pm to celebrate. If you’re passing by, you’re welcome to drop in. Such is the tightness of the musical community here that if you do so, you’re pretty much guaranteed to squeeze your way past some of the best-known Faroese musicians on your way to the loo.

It’s a mark of the richness and concentration of the musical life in the Faroes that Tutl can release almost 50 titles a year and maintain an entire shop full of its wares (you won’t find any Beethoven or Britney in here, unless it’s Beethoven and Britney rendered by Faroese musicians). The recordings themselves are largely artist-funded and most don’t make money. The enterprise is supported by profits from the odd bestseller, from its operation selling tickets to live music events (mostly to G Festival and the classical-contemporary festival Summartónar) and by low-rent from Tórshavn City, which owns the premises.

The city officials know that Tutl does far more good for the Faroese economy than its balance sheet would indicate. Kristian Blak knows, too, that his shop is about more than the CDs lining its shelves. That’s wise, given the precarious position the compact disc occupies in today’s musical ecosystem. But when Blak talks of ‘physical’, he’s not talking about format. He’s talking about contact and experience. Tourists flock to this place in the summer just as the music-scene’s ‘in-crowd’ (which in the Faroes isn’t genre-specific) does on Friday nights. ‘Without the shop, I don’t see how Faroese music would be visible except on the web’, says Blak. However you consume your music, Tutl is an example of all the good things that could and should come with it – not least sharing it as widely as possible.