Monday, August 21, 2006

Ailing music biz worried about glut of new albums

By Ed Christman2 hours, 57 minutes ago

The avalanche of upcoming releases from stars like Justin Timberlake, Beyonce and Janet Jackson could make for one of the biggest fourth quarters in quite some time. But is it an embarrassment of poorly strategized riches, as some retailers claim?

At first glance, it sounds like a great problem to have. Album sales are down 5.5 percent from last year and dropping, according to Nielsen SoundScan, and a bigger-than-usual fourth quarter could offset some of those losses.

From September through the end of the year, albums expected to join the platinum parade are due from Clay Aiken, Alan Jackson, Ludacris, Beck, Evanescence, Jet, My Chemical Romance, Keith Urban and the Killers.

There will also be plenty of big releases for the older demos from the likes of Bob Dylan, Rod Stewart, Elton John, Sting, the Who, Meat Loaf and Bob Seger.

Most merchants, however, feel the release schedule is so strong that some titles may get lost in the shuffle; for years now, retail executives have lamented that the majors wait until the fourth quarter to release their big projects.

"The release schedule is great, but where are we going to put it all?" asks Ron Lund, senior VP of product management and logistics at Handleman Co. "With all the competition from other forms of entertainment, I don't want any records to get left behind, but people only have so much money."

Thuy Ngo, VP of purchasing for Super D, worries that the major labels have so much product coming out that they will only work albums for a month and move on to the next release. She urges the labels "not to just work an October new release that month, but to come back and work them in November and December."

In fact, if recent sales trends are any indication, the biggest sellers during the holiday season are generally releases that come out in the first three quarters, not in the fourth. According to data presented by Nielsen SoundScan at the annual Natl. Assn. of Retail Merchants convention (NARM), only two of the top 10 best-selling albums of the SoundScan era (from May 1991 to the present) were released in the fourth quarter.

That's why EMI Music Marketing president Ronn Werre says that in addition to working the company's fourth-quarter releases, the British parent company of the Capitol and Virgin labels will also chase sales on current albums from Corinne Bailey Rae, LeToya, OK Go, KT Tunstall, Korn, Ice Cube, 30 Seconds to Mars and the Red Jumpsuit Apparatus.

Another retail concern is the competition that music sales face come the holiday season. At the recent NARM conference, Hastings Entertainment CEO John Marmaduke said the DVD and video game industries combined spent about half a billion dollars advertising their products in the fourth quarter. So while traffic is balanced all year with music getting its fair share, in the fourth quarter, store traffic switches heavily in favor of DVD and video games. That's why, he says, "it's suicide to hold (music) product until the fourth quarter."

Meanwhile, there are questions about just how big the remainder of the year will be saleswise. Ngo says this year's weak sales environment may drag down the fourth-quarter releases. "So far, getting to the fourth quarter is questionable and quite depressing," she notes. "The releases are ramping up, but we have seen some disappointment, and the weekly SoundScan totals aren't responding."

According to one senior distribution executive, this year's slate is heftier than usual because, for the first time since 2004, Sony BMG will be able to match Universal Music Group in bringing big sellers to market. EMI and WEA (the Warner Music-owned distributor of the Warner Bros., Elektra and Atlantic labels) also have stronger than usual schedules.

The biggest wild card may ultimately be which albums actually get released in the fall and which wait until 2007. There were whispers at NARM about possible new albums from rappers Jay-Z and 50 Cent, for example. Sources close to the project say the latter's is more likely to come out in the new year.

The industry is still awaiting details and street dates for a number of releases from big-name acts. "I want to be optimistic, but it's still too early to say how it will shape up because the vendors haven't committed to all the albums they say are coming," Trans World music division merchandise manager Jerry Kamiler says.

Finally, there's always a sleeper album of the holiday selling season. This year, Ngo believes it will be from Yusuf Islam, who stopped recording as Cat Stevens in 1978.

"Given the state of where we are with terrorism and everything that is happening around the 9-11 anniversary, people are completely scared, and it reminds me of the 1960s and 1970s, when people protested the war," she says.

Ngo has heard some of the songs and adds, "(Islam's) record responds to those issues . . . and he is a real samaritan."