[JPL] The Album, a Commodity in Disfavor

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Mon Mar 26 13:15:40 EDT 2007


March 26, 2007
The Album, a Commodity in Disfavor

LOS ANGELES, March 25 ‹ Now that the three young women in Candy Hill, a
glossy rap and R&B trio, have signed a record contract, they are hoping for
stardom. On the schedule: shooting a music video and visiting radio stations
to talk up their music.

But the women do not have a CD to promote. Universal/Republic Records, their
label, signed Candy Hill to record two songs, not a complete album.

³If we get two songs out, we get a shot,² said Vatana Shaw, 20, who formed
the trio four years ago, ³Only true fans are buying full albums. Most people
don¹t really do that anymore.²

To the regret of music labels everywhere, she is right: fans are buying
fewer and fewer full albums. In the shift from CDs to digital music, buyers
can now pick the individual songs they like without having to pay upward of
$10 for an album.

Last year, digital singles outsold plastic CD¹s for the first time. So far
this year, sales of digital songs have risen 54 percent, to roughly 189
million units, according to data from Nielsen SoundScan. Digital album sales
are rising at a slightly faster pace, but buyers of digital music are
purchasing singles over albums by a margin of 19 to 1.

Because of this shift in listener preferences ‹ a trend reflected everywhere
from blogs posting select MP3s to reviews of singles in Rolling Stone ‹
record labels are coming to grips with the loss of the album as their main
product and chief moneymaker.

In response, labels are re-examining everything from their marketing
practices to their contracts. One result is that offers are cropping up for
artists like Candy Hill to record only ring tones or a clutch of singles,
according to talent managers and lawyers.

At the same time, the industry is straining to shore up the album as long as
possible, in part by prodding listeners who buy one song to purchase the
rest of a collection. Apple, in consultation with several labels, has been
planning to offer iTunes users credit for songs they have already purchased
if they then choose to buy the associated album in a certain period of time,
according to people involved in the negotiations. (Under Apple¹s current
practice, customers who buy a song and then the related album effectively
pay for the song twice).

But some analysts say they doubt that such promotions can reverse the trend.

³I think the album is going to die,² said Aram Sinnreich, managing partner
at Radar Research, a media consulting firm based in Los Angeles. ³Consumers
are listening to play lists,² or mixes of single songs from an assortment of
different artists. ³Consumers who have had iPods since they were in the
single digits are going to increasingly gravitate toward artists who embrace

All this comes as the industry¹s long sales slide has been accelerating.
Sales of albums, in either disc or digital form, have dropped more than 16
percent so far this year, a slide that executives attribute to an unusually
weak release schedule and shrinking retail floor space for music. Even
though sales of individual songs ‹ sold principally through iTunes ‹ are
rising, it has not been nearly enough to compensate.

Many music executives dispute the idea that the album will disappear. In
particular, they say, fans of jazz, classical, opera and certain rock (bands
like Radiohead and Tool) will demand album-length listening experiences for
many years to come. But for other genres ‹ including some strains of pop
music, rap, R&B and much of country ‹ where sales success is seen as closely
tied to radio air play of singles, the album may be entering its twilight.

³For some genres and some artists, having an album-centric plan will be a
thing of the past,² said Jeff Kempler, chief operating officer of EMI¹s
Capitol Music Group. While the traditional album provides value to fans, he
said, ³perpetuating a business model that fixates on a particular packaged
product configuration is inimical to what the Internet enables, and it¹s
inimical to what many consumers have clearly voted for.²

Another solution being debated in the industry would transform record labels
into de facto fan clubs. Companies including the Warner Music Group and the
EMI Group have been considering a system in which fans would pay a fee,
perhaps monthly, to ³subscribe² to their favorite artists and receive a
series of recordings, videos and other products spaced over time.

Executives maintain that they must establish more lasting connections with
fans who may well lose interest if forced to wait two years or more before
their favorite artist releases new music.

A decade ago, the music industry had all but stopped selling music in
individual units. But now, four years after Apple introduced its iTunes
service ‹ selling singles for 99 cents apiece and full albums typically for
$9.99 ‹ individual songs account for roughly two-thirds of all music sales
volume in the United States. And that does not count purchases of music in
other, bite-size forms like ring tones, which have sold more than 54 million
units so far this year, according to Nielsen data.

One of the biggest reasons for the shift, analysts say, is that consumers ‹
empowered to cherry-pick ‹ are forgoing album purchases after years of
paying for complete CD¹s with too few songs they like. There are still cases
where full albums succeed ‹ the Red Hot Chili Peppers¹ double-CD ³Stadium
Arcadium,² with a weighty 28 tracks, has sold almost two million copies. But
the overall pie is shrinking.

In some ways, the current climate recalls the 1950s and to some extent, the
60s, when many popular acts sold more singles than albums. It took greatly
influential works like The Beatles¹ ³Sgt. Pepper¹s Lonely Hearts Club Band²
and the Beach Boys¹ ³Pet Sounds² to turn the album into pop music¹s medium
of choice.

But the music industry¹s cost structure is far higher than it was when Bob
Dylan picked up an electric guitar. Today¹s costs ‹ from television ads and
music videos to hefty executive salaries ‹ are still built on blockbuster

Hence the emergence of scaled-back deals with acts like Candy Hill. Labels
have signed new performers to singles deals before, typically to release
what they viewed as ephemeral or novelty hits. Now, executives at Universal
say, such arrangements will become more common for even quality acts because
the single itself is the end product.

With Candy Hill, Universal paid a relatively small advance ‹ described as
being in ³five figures² ‹ to cover recording expenses. Ms. Shaw, who formed
the group with Casha Darjean and Ociris Gomez, said the members had kept
their day jobs working at an insurance company and doing other vocal work to
be able to pay the rent at the house where they live together.

If one of their songs turns into a big hit, they hope to release a full
album, and to tap other income sources, like touring and merchandise sales.

But turning a song into a hit does not appear to be getting any easier.

Ron Shapiro, an artist manager and former president of Atlantic Records,
asked, ³What are the Las Vegas odds of constantly having a ŒBad Day?¹ ² ‹
referring to a tune by the singer Daniel Powter that sold more than two
million copies after it was used on ³American Idol.²

While music labels labor to build careers for artists that are suited for
albums, he added, ³You have to create an almost hysterical pace to find hits
to sell as digital downloads and ring tones that everybody¹s going to want.
It¹s scary.²

Copyright 2007 The New York Times Company

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