Sales Wrap Gaga Style

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Lady Gaga leaves the industry wide eyed, open mouthed and smiling as she deftly scoops first week sales of Born this Way totaling 1.108 million. In the process her album becomes the 17th to break the one-million-in-one-week mark since the start of the SoundScan era in 1991. Nashvillians will recall that No. 16 on that list was Taylor Swift who splashed onto the scoreboard with 1.05 million units last year. Gaga also stormed the digital singles chart with four tracks selling over 30k each. Her song “Edge Of Glory” downloaded 164k for the week.
There’s also news on the country chart, but before we shift gears let’s note a few things. First an amazing 60% of the Gaga album sales were in digital form, about 660k units. Of those, unconfirmed reports estimate about 450k were sold at Amazon for 99¢, without which the album would never have broken the one million barrier. The bargain sale price meant that Amazon took a loss on the sales—not the record label—but one can certainly debate what this gambit will do to the price/value of music in the consumer’s mind, going forward??
A Paisley Design
Brad Paisley took top country positioning this week as his new album This Is Country Music rides atop the Current Country sales chart with first week totals of about 153k. Compilation debuts from Idol’s Scotty McCreery (No. 3; 23k) and Lauren Alaina (No. 9; 10.5k) also landed inside the country Top 10. On the country tracks chart McCreery and Alaina ruled the top two spots with “I Love You This Big” downloading over 170k units and “Like My Mother Does” churning over 120k.
Debuts from Warner’s Frankie Ballard (No. 33; 2,700) and Show Dog’s Carter’s Chord (No. 48; 1,700) also entered the chart. (Even with Top 75 country sales up 71% this week vs. last week (475k total) it only took 716 units to earn a spot on the list.)
The Big Picture—Albums
All genre album sales YTD are now up .4%. Not a huge uptick, but how long has it been since we were able to report any uptick in this category? Country album sales YTD remain in negative territory, -5.3%, but they have been improving of late.
The Big Picture—Tracks
Track sales are showing 10% YTD gains as we complete the first five months of 2011 with sales of about 536 million. Country track sales account for about 57 million or 10.6% of that track sales total.
Coming Soon
Upcoming country album projects can be found here. Potential future standouts with respect to sales include Ronnie Dunn (June 7), Blake Shelton (July 12) and Chris Young (July 12).
A Penny For Your Thoughts?
What about pricing albums for 99¢? What does that mean for this industry going forward? Comment below.
 

Amazon's Gaga Loss Leader Losses

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Fans and music industry observers were taken aback last week by Amazon.com’s offering of the new Lady Gaga album for a mere 99¢. On Monday (5/23), the stultifying crowd of traffic severely compromised the Amazon servers. So to prove it could, “ramp up” to meet any demand, the online retail giant offered the mega-sale again on Thursday. According to various reports including Billboard.biz and Inquisitr.com, Amazon sold approximately 440,000 Gaga units mostly all of which were at the sale priced price point.
According to Billboard, Amazon’s losses from the industry-rattling sale totaled about $3.2 million. For inquisitive readers, the math is spelled out below, but as important as the losses incurred are the benefits. Did Amazon benefit?
Unlike the popular economics joke—lose a little on each sale and make it up in volume—perhaps there were some pluses to be added to the Amazon ledger. The idea of a “loss leader” is nothing new for retailers. Increased traffic often means additional purchases besides the sale item. Also Amazon has its new Cloud Player service to promote. Buying a digital album increased the free storage substantially, so the Gaga consumers were also lured to become part of  the Music Beta. With added cloud competition arriving already from Google and expected to arrive soon from Apple, Amazon leaders may have felt this loss was a fair exchange for customer acquisition and awareness of its new service. And speaking of Apple, Amazon would like nothing more than to steal a few large bites from the Cupertino company’s iTunes market share.
The Math (unofficial): Interscope/Universal collects $8.39 per unit from retailers. Amazon sold the product for 99¢, leaving a loss of $7.40 per unit. Sales of 440,000 X $7.40 per unit equals a loss of $3.256 million. This number can be trimmed a bit to account for full price units and deluxe version sales. Billboard projects the album will sell overall, 1.15 million units. (iTunes reportedly shifted an estimated 200k units at full price.)
 

Eye On Idol (5/26/11)

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I can hardly believe my own eyes. What a shocker. One of the most unbelievable upsets in American Idol hist—okay, who am I kidding?
And so it came to pass that 17-year-old Scotty McCreery was named the second-youngest American Idol (following Jordin Sparks) in history last night (5/25). Scotty was the odds-on favorite for some time, and while I’m not exactly surprised at the results I have to give the guy kudos. He stayed his remarkably consistent musical course and let his aw-shucks charm capture the hearts of the voting population.
Even following the announcement of his win, he quickly and wisely chose his words: “I’ve got to thank the Lord first… he got me here.” If we can get him to start adding the phrase “country radio” in there somewhere, he’ll be all set for the CMA Awards.
Scotty was also quick to praise runner-up Lauren Alaina, as the two met nearly a year ago during the audition rounds. “Me and her have been together since day one and we are going to stay together.” Aww, you guys!
Results aside, it was an exciting finale event worthy of an exciting season. Finalist James Durbin took the stage with metal icons Judas Priest in a rousing medley of “Living After Midnight” and “Breakin’ The Law.” Durbin prowled the stage beside leather clad Priest frontman Rob Halford, living out many a metal fan’s ultimate fantasy. Many viewers–myself included–probably couldn’t help but wonder what a Scotty/James finale would have looked like after seeing this.
Then every big pop star for miles showed up. Lady Gaga performed “The Edge of Glory” on the literal edge of a gigantic rock formation stage prop. Beyonce performed two times–once with the Top 13 females and once solo on her new single “1 + 1.” Bono and The Edge performed with one of the Spider-Man Broadway musical cast members. Even Tony Bennett and a very tan Tom Jones dropped by, adding a touch of class to the proceedings. Judge J.Lo joined hubby Marc Antony and Sheila E. on a sizzling version of “Aguanile.” Judge Steven Tyler reaffirmed his rock god status by howling the Aerosmith classic “Dream On.”
At the beginning of Season 10, I questioned Idol’s relevance in the marketplace and ability to deliver a compelling program. I’m pleased to say I was entirely wrong. Judges Randy Jackson, Jennifer Lopez and Steven Tyler had great chemistry together, there were a couple of surprise eliminations mid-season, and I could even watch the results shows without putting my finger on the fast forward button.
Way to go, Idol. You’ve definitely earned my vote.

Eye On Idol (5/25/11)

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American Idol viewers got a taste of things to come last night (5/24) as finalists Scotty McCreery and Lauren Alaina previewed their would-be first singles.
Scotty was first to sing with a tune called “I Love You This Big,” which was written by rapper/producer Lil Ronnie (Ronnie Jackson) with Brett James and songwriter/producer Ester Dean.
The live performance was not one of Scotty’s best, but thematically and stylistically it’s a good song choice. The lyrics are fitting for a young man with big dreams and a big heart. The chorus goes: “I love you this big/Eyes have never seen this big/No one’s ever dreamed this big/And I’ll spend the rest of my life/Explaining what words cannot describe but I’ll try/I love you this big.” The studio recording has an easy, worn-in George Strait feel to it, which allows Scotty to prove to the naysayers he has plenty vocal range.
Lauren closed out the show with “Like My Mother Does,” which was co-written by Nathan Chapman, Liz Rose, and Nicole Williams.
If Scotty’s was a good song choice, Lauren’s was doggone near perfect. Avid Idol watchers know that Lauren’s mother has been there every step of the way this season, all the way back to the audition round. Nearly every episode of the Final 13, Idol producers have cut to a shot of Mom in the audience tearfully cheering Lauren on to victory. The lyrics credit Mom for her strength: “She’s a rock, she is grace/She’s an angel, she’s my heart and soul/She does it all.”
Adding to the high drama, Lauren was dealing with some serious vocal cord strain before the show even started. But she toughed it out for a winning performance, making sure to hug her mother mid-song and melting my icy heart in the process. Curiously, this same song was previously released as a single by Atlantic artist Jesse Lee in 2010 but never dented the charts. Former Idol finalist Kristy Lee Cook also recorded the song for her 2008 album Why Wait.
Both songs are already available for purchase on iTunes, and Play MPE has serviced them both to radio. America crowns its newest Idol tonight (5/25) at 7 pm CT on Fox. Whatever the outcome, it looks like good news for Nashville.

Entertainment Audience Fragmentation Spurs Decline In Perceived Value

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Results from the 5th annual Value, Engagement and Trust in the Era of Social Entertainment Survey.


Public Relations firm Edelman, with offices in 53 cities and over 3,700 employees worldwide, has released findings from its fifth annual Value, Engagement and Trust in the Era of Social Entertainment survey. Results from the 2011 study show that compared with 2010, consumers believe they are getting 68% less value from entertainment sources in all areas and that only 17% feel that entertainment sources provide “very good” or “excellent” value. Interestingly, consumers rank social networking sites as a form of entertainment and its value has remained largely constant with 31% in the U.K. and 37% in the U.S. giving them “very good” or “excellent” value. Trust in the entertainment industry has fallen by 9% in the U.K .and 11% in the U.S.
“A lower perception of value in the entertainment industry represents the commoditized nature of today’s entertainment,” said Gail Becker, president of Edelman’s Western U.S. Region. “With so many forms of entertainment, consumers are spreading their attention across multiple platforms—leading to a decline in perceived value in any one format. Given the ongoing debate about revenue models and what we see from this year’s study findings, entertainment companies have a real opportunity to regain trust by articulating a stronger value proposition to their consumers and by offering the opportunity to engage with them through multiple platforms.”
The study also shows that consumers are spending more time with digital devices. Fifty-nine percent of people in the U.K. and 53% in the U.S. spent more time on their laptops in the last year, and 49% of people in the U.K. and 52% in the U.S. spent more time on their mobile phones. More than half of all respondents would like to use a computer to access entertainment content, and 30% lead by the youth market, would like to be able to access that content on their mobile phones.
Overwhelmingly, consumers (84% in the U.K. and 88% in the U.S.) feel negatively about the move from free to paid entertainment services. Pay walls created by entertainment sources for previously free services are being met with feelings of frustration and distrust by users. Some cite the lack of improvement in quality of service, while others state they would suspect a profit motive driven by greed. According to the study content providers can try to overcome feelings of pay wall distrust by delivering value in other ways. Respondents consider visual and sound quality important (87% in the U.K. and 85% in the U.S.) in making their entertainment purchasing decisions, and nearly half (47% in the U.K., 48% in the U.S.) consider the number of devices with which they can access the entertainment.
The Value, Engagement and Trust in the Era of Social Entertainment Survey is an annual online survey among 18- to 54-year-old consumers in the U.K. and U.S. and was conducted between February 22 and February 28, 2011. The sample comprised 1,017 respondents, 500 from the U.K. and 517 from the U.S. For the fifth year running, the Value, Engagement and Trust in the Era of Social Entertainment Survey explores consumer attitudes toward the entertainment industry in the U.K. and U.S. It examines consumer perceptions and behaviors as they relate to consumption habits, purchase recommendations, file downloading and sharing.
 

Gaga's Fans Put Their Paws Up For New Album

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Lady Gaga’s fans (affectionately known as “Little Monsters”) attacked Amazon on Monday when the retail giant offered one-day-only full downloads of her new album Born This Way for 99 cents. The resulting surge in traffic and purchases choked Amazon’s servers, leaving many customers unable to download or stream the album.
At 99 cents, Amazon’s download was $11 cheaper than the equivalent iTunes download. The loss-leading move could be viewed as a way for Amazon to bolster its Cloud Drive and Player service, as Apple prepares to launch its own cloud music service. Amazon users get 5 GB cloud storage by default; purchasing the album grants them a full 20 GB.
Despite the price difference, iTunes users still purchased enough downloads of Born This Way to push it to the No. 1 spot ahead of Adele’s 21. There is also a bonus track digital edition of the album available for $15.99.
Other retailers also went Gaga with clever promotional deals. Best Buy gave away copies of Born This Way for free, provided that the customer purchased one of three smartphones with a two-year service plan. Visitors to Starbucks.com could stream the entire album for free, and download single “The Edge Of Glory” for keeps.
The hype over Born This Way also raises questions about first week sales figures. Easily one of the most anticipated releases of the summer, Billboard estimated its first week sales would fall in the 450k-750k range. Following the flurry of promotional deals, however, that number could shift upward.

Serletic Snags $10.8 Million For Music Platform

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Music Mastermind was founded in 2007 by Matt Serletic, former Virgin Records Chairman/CEO and the GRAMMY Award‐winning hit maker behind Matchbox Twenty, Gloriana, Carlos Santana, and others; and Bo Bazylevsky, a top Wall Street bond trader, senior hedge fund portfolio manager, and the former Global Head of Emerging Markets Corporate Trading at J.P. Morgan.
The independent entertainment and technology company today announced it has closed $10.8 million in Series B funding. Liberty Global and Intel Capitol  contributed $6.8 million and angel investers participated with an additional $4 million.
Music Mastermind is the developer of SoundBetter, the audio processing suite at the core of its upcoming consumer‐focused platform. This groundbreaking technology eliminates the traditional effort required to make music, breaking down barriers to creativity and allowing anyone to instantly create, publish, and distribute their own music. “At Liberty Global, we understand that digital technology is uniting people around the world and that music is a common thread among us,” said Bruce Dines, VP of Liberty Global Ventures. “We believe Music Mastermind’s cutting‐edge technologies will connect the international community in a completely new way.”
“We’re at the forefront of the next evolution of music entertainment,” said Matt Serletic who also heads Emblem Records. “It’s time to break down the barriers that prevent people from expressing themselves musically.”
The company raised its first round of funding in February 2010 with nearly $5 million from angel investors.

Industry Ink Monday 5/23

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Digital Music News is reporting that RIAA President Cary Sherman made a salary of over $3.1 million in 2009, working 50 hours a week. RIAA CEO and Director Mitch Bainwol reportedly made $1.62 million the same year. The RIAA is paying $16.2 million in salaries, other compensation, and benefits in total.
• • • •
Lady Gaga’s highly-anticipated Born This Way is out today and retail giant Amazon is offering a digital download of the full album for a market-low of $.99 today only. The predictably high demand has already caused slow wait times for Amazon mp3 users.
• • • •
Miranda Lambert will get the documentary treatment when VH1 airs Behind The Music: Miranda Lambert July 13, at 9 pm CT. The special follows Miranda’s rise to stardom, from playing East Texas dives at 18 to winning a Grammy Award for “The House That Built Me.” Guest commentators include Blake Shelton, Miranda’s parents Rick and Bev, Tracy Gershon, Joe Galante, Loretta Lynn, Sheryl Crow, Kenny Chesney and Hillary Scott.
• • • •
RPM writer and fiddler Nathan Stoops has been playing music recently with American Idol finalist Lauren Alaina, and has now been tapped to play the show’s finale Wednesday, May 25. Stoops is a member of the country group Scarletta, which also includes RPM writers Aubrey Collins and Benji Harris. The group is co-managed by MTM’s Rusty Harmon and RPM’s Scott Siman.

Scarletta: Benji Harris, Aubrey Collins, and Nathan Stoops

Eye On Idol (5/20/11)

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And then there were two.
Following last night’s (5/19) exit of Haley Reinhart from American Idol, only country contestants Scotty McCreery and Lauren Alaina remain. That’s right, an all country finale, which has never happened in the show’s 11 seasons.
No matter who wins, this is great news for Nashville. We get not just one, but two, Idol voter-approved talents to mold into the next future stars. But as is the case with any new artist, there will be some important hurdles. Below is an examination of those hurdles and an Idol finale scorecard.
First off, let’s talk talent. Detractors have criticized Scotty for not being a great singer or perhaps sounding too much like Josh Turner. Sure he may not be the rangiest vocalist out there, and he may have sung “Your Man” one too many times in the early rounds, but I haven’t heard him hit too many sour notes so far. He seems to know his limitations and wisely stays close to his sweet spot. Lauren, on the other hand, is a naturally gifted singer with a gorgeous tone and extraordinary range. She gets the win in this category.

Haley Reinhart


There’s also an aspect of preparedness to consider. Scotty has a definite lead in this category, showing a confidence onstage and in front of the camera that belies his 17 years. He also has a keen ability to adapt and make instinctively appropriate choices for the moment, like choosing Alan Jackson’s “Where Were You” on the Wednesday following Osama Bin Laden’s death.
By comparison, Lauren’s song choices seem completely slapdash. For example, her own song choice for Wednesday’s (5/18) highly critical Top 3 show was Faith Hill’s cute-but-forgettable “Wild One.” Hardly a slam dunk. And I’m still not exactly clear how she sees herself as an artist… is she more Miranda or Martina or something completely different? Issues her label will have to confront.
Country radio is still an important piece of the puzzle, and Scotty in particular may face some challenges there. If Phyllis Stark’s recent article for Radio-Info is any indication, many country PDs and MDs aren’t going to be signing up for the Scotty fan club anytime soon. The response to Lauren was less hostile, provided that she comes with some A-plus material.
Hopefully, some of these folks in country radio will come to their senses and realize that both artists are young and still developing their skills. They should also pause to consider just how many of their listeners (and potential new ones) have been calling to vote for these kids (95 million total votes this week, fyi). And I won’t want to presume to speak for the labels here, but I imagine great care will be taken to ensure Scotty is not just a Josh Turner soundalike. His performances and choices suggest a wide range of ability and taste and it shouldn’t be a problem for him to bury that criticism.
Lastly, there’s a certain all-important X factor. Scotty has this in droves. He’s the all-American kid that helps your grandmother cross the street and rescues helpless kittens out of trees. Seriously, how can you compete with something that symbolic? To her credit, Lauren possesses a likeable southern girl charm but she’s no match for Scotty in this area.
Yes, both contestants have some checks in their columns. Both are distinct talents with their own set of pluses and minuses. But for my money, nothing short of the supposed Rapture tomorrow is going to stop Scotty from being crowned the next American Idol.

Cloud Battle Will Rain On Consumers

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[UPDATE: When this article was published on May 19, only EMI Music and Warner had finalized licensing deals with Apple for its cloud service. Now CNET is reporting that Sony Music has also struck a deal with Apple, making Universal the lone holdout.]
Apple has reportedly signed a licensing deal with EMI Music for a cloud-based music service, and is close to finalizing deals with Universal Music Group and Sony Music.
Warner Music Group reached an agreement with Apple last month, and having EMI on board will bring the tech giant one step closer to offering a full-featured cloud music service. At present, available cloud options from Google and Amazon are unlicensed.
Once deals from Sony and Universal are finalized, Apple will be in a position to offer a service with more bells and whistles than its rivals. With Apple’s Worldwide Developers Conference on the horizon for June 6, the company might finally be ready to unveil the long-awaited service.
It remains unclear, however, which new options and features will be part of the Apple cloud experience. One possibility is the ability to scan a user’s iTunes library and match tracks with existing master copies in the cloud, thereby eliminating the need to upload gigabytes of files. Apple could also charge a subscription fee for cloud usage.
The stripped-down Amazon cloud interface could stand some improvement. Aside from a clunky file uploading process, it’s essentially just a hard drive with some navigational features to help track down the album, artist or song desired. Furthermore, the service offers no clear way to find any track-specific information like number of plays or year released. On the upside, users can apparently download the files to any computer and new mp3 purchases from Amazon are automatically sent to the cloud.
But there’s also also a strange disconnect between the Cloud Player and Amazon’s massive retail arm. One of the things that has always made Amazon such a vital and exciting place to shop is its discovery and recommendation engine. If a user rates, say, the latest Miranda Lambert album AND an old Talking Heads record, then Amazon makes all kinds of recommendations based on the purchasing habits of other users who own similar things. None of that appears to be happening in the cloud.
This is one area where the iTunes cloud service will likely triumph over its competitors. As an organizing tool, iTunes is without peer. Presumably Apple will inject its cloud product with a similar logic for grouping and sorting music in myriad ways. If it can also include an engaging recommendation tool that will encourage users to explore and discover, Apple will have the edge.
The major labels are rumored to be pulling for Apple to win the cloud battle. If a fully-licensed Apple cloud takes a huge chunk of the digital music marketplace, then Amazon and Google will be forced to secure licenses for their services to stay relevant.