The future of music retail is ... ice cream?
Taylor Swift is recession proof, having spent four straight weeks near the top of the U.S. pop charts. Unfortunately, the rest of the industry isn't so lucky.
In pop music, the end of the year is a time for Grammy nominations and top-10 lists. Of late, it's also a time to delve into some downbeat sales numbers. This holiday season looks, expectedly, bleak. And it's not just sales of "Chinese Democracy" that are disappointing.
In Billboard's year-end issue, Ed Christman writes that album sales in early December were off more than 20% from the same period last year. Worse, those figures were up from the end of November, when holiday sales were down about 17% from the comparable week last year.
To cause even more alarm, online sales, which Billboard ropes under the umbrella of "nontraditional" outlets -- a category that also includes coffee shops and concert venues -- are not growing at the pace they once were. They're increasing, yes, but they're slowing. This holiday season, nontraditional sales were up about 9%. They were increasing at a faster pace last year, when nontraditional retailers were up 15%.
The result? Retailers will be bringing in fewer CDs. In their place, expect everything from DVDs to BluRays to toys to ice cream.
Ice cream? That's right, as Christman notes that Sacramento-based Dimples Records is now devoting floor space to the dairy-based dessert. "I can make a 50% margin on ice cream, while on CDs I can lose two bucks," the magazine quotes Dimples' co-owner Dilyn Radakovitz as saying.
Christman's column gets even bleaker, and the issue, which is only available online to subscribers, is worth picking up, offering a quick and readable overview of the current state of the business. But the end result is a retail landscape that will sell nothing but the top-selling artists, and, well, that's it. Earlier this year, it was reported that despite the massive success Wal-Mart scored with its AC/DC exclusive, the retailer would likely be cutting back floor space for CDs.
When stores on the level of a Wal-Mart or a Best Buy stock less music, it doesn't necessarily mean a boon for iTunes and Amazon. Indeed, it eventually trickles down. Labels rely more on the superstar artists that warrant the shelf-space at supermarkets, and smaller artists no longer get the retail exposure that helps boost their sales from 10,000 copies to 100,000 copies, making it harder for retailers to bring in more developing acts.
But that's where digital comes in, no? Maybe. Ringtone sales are dropping, writes the magazine, and major artists such as AC/DC and Kid Rock are even questioning whether or not it makes sense to be on iTunes. In the near term, we appear to be looking at a retail landscape that showcases only the biggest of artists, and top-selling indie acts, which this year was Vampire Weekend.
Maybe a couple scoops of strawberry ice cream doesn't sound so bad right now.
--Todd Martens
Photo: Vampire Weekend. Credit: XL Recordings
