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Surprising Rebound for Catalog Album Sales Thanks to Creative Marketing

Creative packaging, savvy marketing drive renewed focus on multi-disc sets, catalog albums

More than 35 years after his death, RCA is still finding ways to generate new product out of the cash cow that is the Elvis Presley library.

All of the major labels are putting renewed energy into reinvigorating the physical product marketplace that seemed snuffed out long ago by the emergence of cheaper digital options and rampant piracy. The catalog album business is enjoying a surprising rebound thanks to creative marketing, flexible pricing and the proliferation of meticulously curated box sets aimed at rabid fans.

An example of the boom in completist-oriented box sets is “Elvis at Stax,” a three-CD compilation of Presley’s 1973 recordings at Stax Records due in August from RCA/Legacy, or Legacy’s recently announced “Sound System,” a 12-CD-and-DVD package devoted to the Clash canon, elaborately packaged in a boombox replica .

For the budget-conscious, there are packages like Rhino Entertainment’s “ZZ Top: The Complete Studio Albums 1970-1990” — a box of 10 CDs that sells for $39.98.

Most of these packages are aimed at “the 45- to 65-year-old dude who may have some money in his pocket,” according to Carl Mello, director of purchasing at the 28-store Newbury Comics chain based in Brighton, Mass. Dan Pelson, CEO of Sony Music Entertainment’s direct-to-consumer Generator unit, said his division aims to pique the interest those consumers who live in “fan caves” and consider new CD sets to be musthave items.

Labels are experimenting with multiple options for newly buffed up catalog titles. For instance, Concord/Hear Music’s May reissue of the 1976 Paul McCartney & Wings live album “Wings Over America” was made available in two-CD and three-CD renderings, as well as a numbered, limited edition deluxe box (priced at $138.99) containing a DVD of the live performance and four supplementary books.

Top catalog execs all say that the radical changes in the marketplace have forced them to work their product in more focused ways, and to take their message straight to consumers through direct-marketing and online pitches.

“While the number of retail opportunities has shrunk for physical product, our ability to target specific consumers — music fans out there at different levels of interest and commitment — has improved dramatically,” said Adam Block, president of Sony Music Entertainment’s Legacy Recordings division.

At Warner Music Group’s Rhino, which dramatically rolled back its release schedule in the wake of deep staff cutbacks in recent years, there is a fresh emphasis on top-end physical product. Rhino president-CEO Kevin Gore notes that the company has learned some lessons as a result of its association with the Grateful Dead, whose product Rhino markets exclusively.

“That’s a very responsive and engaged audience,” says Gore. “Since we did the Grateful Dead deal five or six years ago, we’ve taken that audience, nurtured it, engaged it more.”

Targeting a well-heeled sector among Deadheads via Web marketing and social media, Rhino has seen great success with a number of expensive limited-edition releases from the band. A 7,200-copy run of the 60-CD “Europe ’72” and a 9,000-copy edition of the 18-disc “Spring 1990,” priced at $450 and $200 respectively, both sold out.

But the company is mining a market for more economical releases, too. Gore also oversees Warner Music Group’s global catalog initiatives, and discovered that reasonably priced complete album sets were performing well overseas. Rhino has imported the concept to the U.S.: The ZZ Top complete album set followed similar collections by acts like Joni Mitchell and Chicago, priced at $45 and $49.98 respectively.

There’s no question that sales even for physical product are driven by online transactions rather than by retail outlets. Newbury Comics’ Mello says the most expensive titles are a particularly difficult sell for retailers. “You can have really healthy sales in the first couple of weeks,” he says . But boy, do those things dry up.”

Universal Music Group got involved in the direct-to-consumer business more than a decade ago, when it established Hip-O Select as a Web-based outlet for limited edition catalog titles (along the lines of Rhino’s dormant Handmade imprint).

Bruce Resnikoff, president-CEO of UMG’s Universal Music Enterprises, says Hip-O Select was set up as a direct-retail operation to reach a small group of consumers who were looking beyond what was available at traditional retail outlets. As the demand for online music purchases grew, he continues, “the concept of our Select business got broader and became not just a way to sell some product, but a way to market broader depths of our catalog.”

Recently, Select has been increasingly focused on marketing o erings from the Motown brand, the subject of a current hit Broadway jukebox musical.

But Resnikoff notes that UMG’s catalog business won’t succeed if it addresses only the top-end consumer. The key, he says, is in offering different levels to a release. “You’ll see three, four, five different versions of a package that have different amounts of material that was unavailable before, because we’re constantly trying to create a new experience.” For example, the 2011 re-release of the Rolling Stones’ 1978 album “Some Girls” featured iterations ranging from a two-CD “deluxe edition” to a box set version priced at more than $100.

Three years ago, Sony — which has remained the most aggressive of all the majors in terms of releasing high-end physical catalog items — undertook a radical strategy to address such consumers with the creation of Pop Market, a membership-based website that offers daily, limited-time discounts on a variety of titles.

Throughout its existence, Pop Market has promoted such Legacy releases as its “Complete Albums Collections,” multidisc box sets devoted to Sony acts with voluminous back catalogs, including such high-ticket items as last year’s 63-disc Johnny Cash set. In a nod to Sony’s skill at reaching music buffs, Pop Market now sells product from all the major labels.

“When we launched it, there were excellent results, and we realized that to really build this as a business, it made sense to add as much product as possible,” said Generator CEO Pelson, who oversees Pop Market. “We’ve doubled year over year, every single year since we’ve launched.”

Pelson notes that while the Pop Market operation addresses a diverse consumer base in terms of genre, there is a commonality that drives the high-end catalog buyer.

“The core fan has extended beyond classic rock,” he says. “We’ll do very well with Miles Davis, with classical artists like Yo-Yo Ma, with OutKast, Bob Marley. In a lot of cases, it’s the same buyers who have broad tastes that are looking for the same kind of experience when they purchase music. When you walk into their homes, they’re fan caves of stuff.”

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