Is the Single Going the Way of the 8-Track?

Is the Single Going the Way of the 8-Track?

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Are singles going the way of the eight-track? That might seem extreme, considering half-way through 1999 sales of singles have hit the 36 million mark domestically, according to SoundScan. A hefty number for sure, but it's heading south, fast.

Last year at this point, American consumers had purchased more than 50 million singles, which means despite another robust year for album sales, there's already been a 30 percent decline this year in singles business. For all of 1997, fans bought 127 million singles; come Dec. 31 this year, the industry will be lucky to have sold 80 million singles. That's a potential sales decline of more than 40 percent in just two years time.

It gets worse. According to Bob Higgins, founder and CEO of Trans World Entertainment, the largest music retail chain in America, single sales at the mall-based record stores are off fifty percent this year. Higgins is particularly concerned because less expensive singles have traditionally been the best way to get grade-school consumers into buying music. "We can't afford to lose that shopper," he says.

So what's going on, and can the single be saved?

The answer, as is often the case in the music business, comes down to profits. And music retailers and record labels are busy pointing the finger at one another over who's to blame.

Music retailers, who rely on single sales revenues, accuse record companies of refusing to release superstar single titles for fear that cheaper singles will cannibalize sales of more profitable albums. (i.e. Why spend $14 for the Sugar Ray's album 14:59 when you can buy the band's hit, "Every Morning," for just $1.99?)

The argument can cut both ways. Doug Morris for instance, chairman and CEO of the Universal Music Group, is a firm believer that singles cannibalize sales, according to people close to him. As a result, the largest record company in America tends to withhold more titles than its competitors.

On the other hand, Sony released Ricky Martin's "Livin' La Vida Loca" as a single weeks before his album hit stores and both formats sold very well. Its first week in stores, the single sold a whopping 280,000 copies, which didn't stop his Ricky Martin album from selling more than 600,000 copies in its first week. Morris and others would probably argue that a single as big as "Livin' La Vida Loca" only comes around once or twice a year, and that for lesser titles, singles can hurt album sales.

Meanwhile, record companies, which pocket more money from album sales than they do from singles, are united in accusing music retailers of aggressively encouraging "free goods." Free goods have been used by labels in recent years as a way to artificially boost single sales and chart position; in this scenario, record companies give away a title virtually for free. For example, Jennifer Lopez's "If You Had My Love" is available for just 49 cents at many major music chains to compensate for the fact the song has only climbed to No. 38 at radio. Because competition to break acts is so fierce, labels feel the need to give some singles for free to retailers, who then pocket all the profits. (Forty-nine or 99 cents may not seem like a lot, but to a company like Trans World, it added up to nearly $5 million in discounted single sales last year.) Labels may not like free goods, but in order to send some acts up the charts, they continue to ship out the discounted titles. The record companies opt for free goods voluntarily, but blame retailers for creating the discount mentality.

Fed up with that losing proposition, some labels have curtailed the shipping of singles. Try finding a single for the Backstreet Boys' "I Want It That Way," 112's "Anywhere" or Smash Mouth's "All Star." They don't exist. And with fewer selections stocked, naturally, sales have declined.

While both sides ponder the next move, Higgins is clear on who he thinks can quickly fix the singles dilemma: "Labels can and should solve it."