"Flat Is the New Up"

by John Davidson
23 December 2005

And that’s apparently the good news in the accounting department of the music business.

I referenced previously this article called “Silent Night For Music Sales,” appearing in the subscription-required Wall Street Journal, and it has some money quotes worth discussing:

But many retailers and label executives alike point to a more fundamental problem this year: A lack of hit acts. One wouldn’t usually associate Christmas with DON VANCLEAVE, president of the Coalition of Independent Music Stores, says blame lies with “an absolute, gigantic cesspool of really bad bands.”

Hoo-boy. I have a lot of respect for the independent music stores, especially my favorite in my hometown, Criminal Records, but that’s a weak excuse. There isn’t a significantly higher percentage of crap albums this year than any other. But then again, I probably only listened to 250-300 new titles this year myself. What, VanCleave had time to pore over the 40,000 albums that were released? I kind of doubt it.

The article continues:

Consumers seem to agree. This year has seen more albums come and go from the No. 1 sales spot than any year since SoundScan began keeping score in 1991—a sign that few hits have staying power. This year’s album charts have seen brief reigns, often followed by rapid tumbles, by more than two dozen artists, including KENNY CHESNEY, HILARY DUFF and ROB THOMAS.

Uh, NO. What consumers agree on is that word of mouth has now become AIM, blogs, Pitchfork, and all the other places that give consumers massive buying power. We don’t randomly drop $20 on impulse for a compact disc nearly as much as we used to because if it’s only good for one song, we know about that and either a) steal it or b) buy the tracks online. Furthermore, the major labels have followed the film studios in doing a major marketing push for the release date, and if the superstar album stiffs (“doesn’t shift the expected units”) the first week, marketing begins to grind down.

Funny how the most important part of the article is at the end:

Many music retailers aren’t taking any chances and have begun adding products other than CDs. Virgin Megastores, for instance, are being reconfigured to emphasize “music-lifestyle” items, such as clothes and memorabilia, over music itself. In the locations that have been overhauled, music now accounts for only 40% of sales. “If we’re dependent on music, then we’re going to be vulnerable to the ebb and flow,” says the stores’ Mr. Wright. “And the fundamental trend in physical music is downward.”

The smart stores are trying to adapt to the changing market instead of blaming the consumer for taking their money elsewhere. You are going to see stories like this every December for the next five years until the warehouse CD stores like Tower are completely gone. In their place will be the stores which become lifestyle centers, catering to music culture and not simply the distribution format (the compact disc).

Filed under music industry newspapers