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In the Streaming Age, Does Music’s Q4 Matter Anymore?

Record labels once backloaded their schedule with superstar releases targeting the holidays. Christmas 2018 paints a different picture.

The fourth quarter — the music business’s traditional cash-in period coinciding with the holiday season — is well under way. But while in the past, record labels backloaded their schedule with superstar releases targeting Black Friday and beyond, Christmas 2018 paints a different picture.

A look at the albums coming out between now and December shows some anticipated releases — Interscope’s “A Star Is Born” soundtrack, the latest from Twenty One Pilots, Alessia Cara, Lil Wayne and Elle King. Grammy nominations, which will be announced Dec. 5, could boost chart position for albums released earlier in the year. Otherwise, were it not for posthumous collections from the likes of Prince and Tom Petty and some premium items aimed at baby boomers, one might think Santa was boycotting music-gifting entirely.

“Forty percent of our business [used to be] done between Thanksgiving and Christmas,” says Republic Records chairman/CEO Monte Lipman. His roster includes such heavyweights as Drake, whose most recent album “Scorpion” was released June 29; Ariana Grande, who released “Sweetener” Aug. 17; and Nicki Minaj, who dropped “Queen” Aug. 10. “This year, the majority of our business was between April and September,” he adds. “Consumer behavior has changed.” Seems today’s Q4 is January and August, one could reason.

Jim Urie, the onetime head of Universal Music Group Distribution, now a special adviser to the board and a minority owner of Concord Music Group, says streaming began to disrupt the seasonal music business the instant it became an option. “Q4 has been losing share since Apple introduced iTunes in 2001,” he explains.

Per Nielsen Music, about a quarter of the top 20 albums of the previous two decades, including Shania Twain’s “Come On Over,” The Beatles’ “Beatles 1,” and Linkin Park’s “Hybrid Theory,” as well as the “Bodyguard” and “Titanic” soundtracks, were released in October and November.

The advent of streaming, and the simultaneous cratering of the brick-and-mortar record retail business, has turned the music industry into more of a 12-months-a-year enterprise. Big box retailer Best Buy stopped carrying CDs, albums and DVDs this summer (though, ironically, vinyl still remains), leaving only Walmart and Target to still carry physical product.

In a curious twist, vinyl has proven to be among the more robust sectors to emerge in the past decade (even Walmart is in the process of adding LPs to its inventory for the holiday season) and that’s thanks to elaborate (read: collectible) packaging as well as a variety of configurations and price points. For instance, Rhino’s forthcoming Grateful Dead set, “Pacific Northwest ’73-’74: The Complete Recordings,” is available as a 19-disc physical box set ($189.98), a 19-disc download ($149.99), a three-CD “best of the box” ($24.98) and a digital download “best of” ($14.99). Multiple pricing schemes also exist for Reprise’s Tom Petty collection “An American Treasure.” Look for other important boomer reissues, like UMe’s the Beatles’ “White Album” and the latest edition of Sony’s Bob Dylan bootleg series, to hit in the holiday season.

“Q4 has been losing share since Apple introduced iTunes in 2001.”
Jim Urie

According to Mark Pinkus, a label
veteran of more than 25 years and president of Rhino Entertainment, Warner Music Group’s U.S. catalog division, the holidays are still a time to sell. “This sure feels like a typical fourth quarter for us,” he says. “Our ability to put out big, beautiful, well-curated box sets still has a marketplace. Physical is not a declining business for Rhino.”

Pinkus points to a wide array of physical offerings featuring both vinyl and CDs from the likes of Led Zeppelin, Fleetwood Mac, Lindsey Buckingham and the Eagles as well as deluxe 40th-anniversary editions of the Doors’ “Waiting for the Sun” and the Ramones’ “Road to Ruin.” There’s even a new Monkees Christmas album featuring songs written by Weezer’s Rivers Cuomo and XTC’s Andy Partridge.

For new original releases, the immediacy of streaming has made long-range planning or even traditional marketing unnecessary, particularly if an artist is big enough. And digital distributors don’t seem to market specifically for the holidays. “The consumer wants everything now,” says one old-school music sales exec. “We’re no longer selling a product but an experience, an emotion.”

Amy Dietz, exec VP and general manager at Ingrooves, suggests, “There should be a streaming equivalent to [the 1980’s campaign] Give the Gift of Music.”

Pinkus, however, says Rhino’s digital partners have been attentive. “We’re in daily contact with our reps at Spotify, Apple, Pandora and YouTube,” he insists. “Amazon Unlimited is a huge partner for us. Every day someone is asking Alexa to play Led Zeppelin. They have a great team over there — creative music people. They listen when we come to them with our market research.”

Yet Urie notes another reason that music buying is no longer seasonal. “The boost in sales these days comes from kids getting new devices and filling them with apps,” he says, adding that an Apple gift card earns retailers almost 10% for each one racked and sold. “The industry,” he says, “has to take a long, hard look at what the holidays mean, and how it releases records.”

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