At Sea With MP3's, Boomers Buoy Struggling Record Industry
By CHRIS NELSON
Published: November 2, 2003
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Long-established artists like Van Morrison are popular with a generation that grew up playing vinyl albums.
Beyoncé Knowles and 50 Cent have two of the best-selling albums so far this year. Nonetheless, when Borders Books & Music recently redesigned the layouts of the music sections in its more than 420 superstores, the CD's from these and other young hit-makers were booted from prime browsing display space in favor of albums from the likes of Rod Stewart, Sting and Barbra Streisand.
The rearranging proved prescient, as the release of the latest Billboard top 200 albums chart demonstrated. While Clay Aiken, runner-up in the most recent "American Idol" contest and no hipster himself, took the top spot with his debut album, "Measure of a Man," Mr. Stewart finished second with "As Time Goes By: The Great American Songbook Vol. II."
New releases from Ms. Streisand and the Eagles also landed in the Top 10. All told, artists over the age of 40, like Bette Midler, Van Morrison, Michael McDonald and Simon and Garfunkel, held 11 of the top 50 spots in the Billboard chart. In the same week last year, 7 baby boomers finished in the Top 50.
The growing success of albums by older artists — and of singers like Norah Jones, who appeal to less cutting-edge tastes — offers some solace to an industry mired in a three-year sales slump. Record executives are desperate for any hopeful sign, even if it comes from people with more wrinkles than tattoos.
The record labels have placed most of the blame for the decline on the file-sharing networks on the Internet, and have sued or threatened to sue hundreds of people for illegally distributing free music online.
But the older audience, typically more affluent consumers who grew up buying their music on vinyl LP's, seldom uses the free file-sharing sites, according to Forrester Research. And because they account for a growing segment of the record-buying public, labels are increasingly tailoring their releases and their marketing, particularly on television, to reach them.
"Adults like music, too, and they're underserved," said Will Botwin, the president of Sony Music Entertainment's Columbia Records, which released the albums by Ms. Streisand and Ms. Midler. "And they're starting to get served."
It's not as if the historically strong youth market is melting away. The biggest-selling album of the year is expected to be the rapper 50 Cent's "Get Rich or Die Tryin'," according to Geoff Mayfield, Billboard's director of charts.
But adult buyers are increasingly making their presence known in the industry. Last year, shoppers over the age of 40, who tend to gravitate to graying artists, bought more than 35 percent of all units sold, according to the Recording Industry Association of America. Ten years ago, they accounted for 22.6 percent of all sales.
Some of the sales spurt can be attributed to a staple of the music industry: the never-ending repackaging of golden oldies. The Eagles have already released two volumes of greatest hits, not to mention a boxed set. But that did not stop Time Warner's Warner Strategic Marketing label from releasing a double CD of "The Very Best Of" on Oct. 23. The album sold 162,000 copies, and finished third in its first week on the charts.
Elvis Presley's "Elvis: 2nd to None" and "The Essential Simon & Garfunkel" also made strong showings on the chart. But shoppers are also buying albums of vintage stars recording tried-and-true songs. Mr. Stewart, a long way from his "Da Ya Think I'm Sexy" days, now croons classics like "As Time Goes By" and "Bewitched, Bothered and Bewildered" (a duet with Cher), and sold 212,000 copies of his new album in the first week. (His 2002 volume of standards leapt from 95 to 46 on this week's chart and has sold 1.8 million copies so far.) Ms. Streisand's "The Movie Album," Mr. McDonald's "Motown" and "Bette Midler Sings the Rosemary Clooney Songbook" also follow the concept.
"It is a voice matched with material where they know every song on the album, they are well-chosen, and there is a chemistry and magic that is appealing to the public," said Clive Davis, chairman of BMG's RCA Music Group, whose J Records label produced both of Mr. Stewart's collections.
Even better for the music industry, these fans actually pay for the music. "We feel like we're losing less sales to file sharing" on albums by older artists, as well as those by younger artists who appeal to baby boomers, like Ms. Jones, John Mayer and Josh Groban, Mr. Botwin, of Columbia Records, said.
"From Discs to Downloading," an August report by Josh Bernoff, principal analyst for Forrester Research, bolsters Mr. Botwin's file-sharing thesis. The report found that while one-half of consumers ages 22 and younger use file-sharing software, only one in nine people ages 23 years old and older do so.
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The recent success of some television advertising campaigns for new albums is also likely to inspire copycats. Until recently, the major labels rarely used television advertisements to drive music fans to stores, content to leave the airwaves to the direct marketing purveyors of schlocky compilations like K-Tel.
That began to change in 1999, when the Universal Music Group created UTV Records to sell compilation albums and single-artist retrospectives through television advertisements. The new label has issued compilations from Tom Petty, the Bee Gees and Kiss.
"The adult market is out there; they just have to be marketed to," said Kevin Gore, executive vice president for sales and marketing at Warner Strategic Marketing. Aggressive television advertising campaigns, like the one for the Beatles' "1" compilation in 2000, can turn what would have been a modest-selling album 10 year years ago into a chart-topper today, he said.
Warner Strategic Marketing began airing spots for the Eagles' "Very Best Of" on networks like CNN, MSNBC, MTV and VH1 a month before the album was released.
Television marketing has broadened both the types of artists labels can push, as well as the consumers they can reach.
In the past, the labels turned to radio and MTV to drive music sales, said Bruce Resnikoff, the president of Universal Music Enterprises, part of Vivendi Universal. But as radio stations narrow their playlists of songs, fewer artists can reach fans over the airwaves.
It is equally hard to get musicians, particularly older ones, on MTV. General television advertisements allow labels to reach older potential buyers, Mr. Resnikoff said. Label executives hope that when older fans see an ad for an Elton John disc on NBC's "Today" show, they will pick up the disc while shopping in Wal-Mart, Best Buy, Target, or Barnes & Noble — the stores they frequent more often than record stores.
The growing importance of older fans has led to this month's arrival of a music magazine called Tracks. Leaving the younger set to magazines like Rolling Stone, Blender and Spin, Tracks plans to cater to the musical tastes of adults over 30.
All these signs of a surge are contributing to a long-awaited feeling of optimism in the music industry. The latest Billboard chart represents the seventh week in a row that weekly sales in 2003 have bested sales in the corresponding week last year.
But any rejoicing may be premature. Even with the recent spurt, sales in 2003 are still off 6.2 percent from the comparable period in 2002. And if the record-buying habit is not passed down to a generation raised on Napster, the current troubles of the music business will seem as mild as Barry Manilow.
"It would be dangerous to say, O.K., the kids have gone away and all that's left are the adults," said Billboard's Mr. Mayfield. "That hasn't totally happened. And we ought to get scared if kids do lose interest in paying for music."
