Ailing music biz needs a boost

Can a year-end push from music superstars lift the record biz out of a stubborn slump?

The industry is pulling out all the stops this holiday season, unleashing new material from acts like Britney Spears, Garth Brooks and Michael Jackson to lure consumers.

But sales have lagged behind those of the artists’ earlier works, making production and marketing costs harder to recoup.

Add to that a soft economy, stiff competition from the DVD and videogame markets and mass piracy on CD-Rs and file-sharing networks, and music execs can’t be blamed for feeling less than festive.

“It’s a tough time to be in this business,” says one label decision-maker. “I can’t remember a time when the industry was under so many negative pressures all at once.”

To date, unit sales of albums are down 2.2% from the same period last year, and the labels reckon that they will have to do almost 40% of their total sales in the fourth quarter to bring 2001 up to speed.

So the new releases have come fast and furious over the past few weeks, with more tentpole discs on the way. But results have been mixed.

“Britney” sold nearly 750,000 units in its debut week — nothing to sneeze at, but a far cry from the 1.3 million for her previous record, “Oops … I Did It Again.”

Ditto Garth Brooks: his new “Scarecrow” did a cool 500,000 out of the gate — about half the sales of 1999’s “Double Live.” New material from Michael Jackson, Kid Rock and DMX also came in strong, but well short of their predecessors.

Universal Music & Video Distribution prexy Jim Urie contends the average second-week sales decline among top-200 albums dipped to 34% in 2001 from 24% in 2000 — an increase he attributes directly to technologies such as mass-produced CD-Rs and Internet file swapping, which let pirates buy a CD and then copy it ad infinitum for next to nothing.

“Every time there’s a big new release that comes out,” Sony Music Distribution chairman Danny Yarbrough says, “there is a corresponding rise in sales of blank CD-Rs. It’s not hard to do the math on that one.”

There have been some solid performers. “Weathered,” from alt-rock giants Creed, scanned nearly 900,000 copies in its first frame (Nov. 20-25) — almost a three-fold increase on their prior “Human Clay.” And November-December releases from acts such as No Doubt, Destiny’s Child, Ludacris and Wu-Tang Clan are in the wings.

But it’s an uphill battle, as labels and retailers contend with several outside forces, such as the rollout of the X-Box and Game Cube consoles by Microsoft and Nintendo, respectively.

“When you’re talking about discretionary income, the range of things competing for attention is so broad,” says UMVD’s Urie. “It all comes down to: how compelling is your product?”

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