[JPL] Bleak Friday begins holiday season for music retailers

Jazz Promo Services jazzpromo at earthlink.net
Sat Dec 1 18:05:02 EST 2007


Bleak Friday begins holiday season for music retailers
By Ed Christman
Sat Dec 1, 12:33 AM ET
DDisappointing sales performance during Thanksgiving weekend has merchants
feeling pessimistic about music's prospects for the holiday selling season
and worried about what will happen to CD sales in the new year.

Merchants reported a comparable-store music sales decline ranging from 15
percent to 25 percent for the weekend that begins with Black Friday,
although they said robust movie and videogame sales helped soften the blow.

Nielsen SoundScan data backs up those merchants' reports. Album sales
totaled 13.9 million during the week ended November 25, an 18 percent
decline from the 17 million sold last year during the Thanksgiving weekend.

Merchants cited the lack of hit releases as the main reason for the decline.
"If the labels had put out a new hit CD for the week, sales might not be
down so much," Newbury Comics head of purchasing Carl Mello said. "You have
to put something out to get people to buy music."

Mello wasn't the only merchant feeling frustrated by the release schedule.

"I can't remember a Thanksgiving that didn't have any superstar releases on
the Tuesday before," Value Music president Rob Perkins said.


At the 25-unit, Brighton, Mass.-based Newbury Comics, CEO Mike Dreese
reported that "our biggest new release during Thanksgiving was OneRepublic
("Dreaming Out Loud"), which sold 489 units." But during Thanksgiving week
2006 at Newbury, he said, seven new titles -- by Jay-Z, the Beatles,
Killswitch Engage, Tom Waits, Brand New, U2 and Snoop Dogg -- exceeded that

Even the Latin market suffered from a lack of releases, said Ritmo Latino
president David Massry, who called the holiday weekend "very disappointing."

Not everyone had a bad holiday, however. Label executives said Best Buy,
Circuit City, Target and Wal-Mart had strong music sales -- at least on
Black Friday, if not for the whole weekend. Wal-Mart's combined sales for
top hit titles were up nearly 50 percent, sources said, but that apparently
was largely due to its Eagles exclusive and Garth Brooks' "Ultimate Hits."
Wal-Mart is traditionally the No. 1 seller of Brooks titles, even when it's
not carrying a Brooks exclusive.

Online merchants also enjoyed a Thanksgiving bonanza, according to Alan
Tuchman, CEO of Alliance Entertainment Corp., the largest music fulfillment
wholesaler for online stores. "Our overall online business was up
significantly during the weekend, beginning Thanksgiving day," he said. "We
were up about 15 percent."

By store type, album sales at chains (including merchants like Trans World,
Best Buy and Barnes & Noble) were down 40 percent, indies were down 22.6
percent, and mass merchants were down 6 percent. However, nontraditional
outlets were up 17.7 percent.

A lot of attention goes to the post-holiday "Cyber Monday," but Tuchman said
Thanksgiving Day itself was huge. "When people didn't have broadband at home
there might have been a Cyber Monday," he said. "But nowadays people are at
home on their PCs and laptops looking at the Black Friday advertising deals
and buying away."


The biggest-selling title at most traditional music stores was Josh Groban's
"Noel," which scanned 405,000 units last week, according to Nielsen
SoundScan. The No. 2 title was Alicia Keys' "As I Am," which scanned

This year, however, only 11 titles topped the 100,000 mark, compared with 19
titles last year. Overall the top 20 of the Billboard 200 produced nearly
2.9 million units, a 23.8 percent decline from the 3.8 million units that
albums in the top 20 scanned in the same week last year.

Regardless of new releases, hit albums were scarce and couldn't stand up to
other entertainment software products.

"The holiday weekend may sound like a sales disaster, but that is only if
you are worried about music," Newbury Comics' Dreese said.

Other product lines helped make up for some of the music shortfall, as
merchants reported that overall comparable-store declines ranged from 4
percent to 10 percent.

At the 10-unit Exclusive Co. in Oshkosh, Wis., for example, general manager
Stephanie Huff reported that DVDs were up 216 percent Thanksgiving week. TV
shows drove the DVD surge, she added.

Such videogames as "Guitar Hero" and game platforms also pushed traffic into
stores. In fact, Nintendo's Wii system is already out of stock at most
stores, and it looks as though skimpy product allocations will keep
customers roaming from store to store to find the item.

Value Music's Perkins said the calendar could help retailers this year.
"There are 32 days between Christmas and Thanksgiving," he said. "That extra
day is humongous and will give us a positive impact at the end."

But another merchant said the weak music performance so far leaves him
worried about next year. "It ain't looking good," he said.


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