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In a move that surprised the record industry, Island Def Jam withheld R&B crooner Ne-Yo's massive radio hit "So Sick" from iTunes, and all other digital services, until his debut CD came out last month. The strategy -- which flies in the face of conventional wisdom that releasing a single online before an album comes out boosts sales -- seems to have paid off big: According to Nielsen SoundScan, the singer sold 301,000 copies of In My Own Words in its first week, making it the year's biggest debut. And, as a bonus, Ne-Yo moved 120,000 copies of "So Sick" online.
Ne-Yo's chart-crushing success is already changing the way labels look at the iTunes singles market. In the weeks after his debut, new songs by artists including T.I., Shakira and Rihanna were also withheld. "Everybody's going to do it because they saw that it worked," says Tina Davis, manager of hit R&B singer Chris Brown and a former Def Jam executive who signed Ne-Yo in 2004."Everybody's trying to find a new strategy."
Island Def Jam's move cuts to the heart of a music-industry debate: Do advance singles create buzz, or do they cannibalize CD sales? Brown released his hit radio single "Run It!" online more than three months before his album came out in 2005, selling more than 300,000 downloads. But when his album hit shelves, it sold just 154,000 copies in its first week -- about half of Ne-Yo's numbers. (Competitors point out that some major CD outlets sold In My Own Words for $7.98.)
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The downside of withholding hot tracks from iTunes is that many music fans who can't find the music will simply download it illegally for free. "It's so incredibly backwards it's kind of mind-boggling," says Tim Quirk, executive editor of online music store Rhapsody.com, which, like iTunes, didn't carry "So Sick." "The track is still available online. You're just not getting any compensation for it."
Island Def Jam executives did not comment for this story, but they've expressed concern about how advance single sales will reduce consumers' desire to buy whole albums, and have also said that they would consider whether or not to release singles to iTunes on a case-by-case basis. The label's pop-R&B star Rihanna, who was signed by Def Jam president Jay-Z, is following in her labelmate's footsteps by sending her Soft Cell-sampling tune "S.O.S. (Rescue Me)" exclusively to traditional radio stations before her CD comes out later this year.
Other labels are testing the strategy too. Atlantic Records artist T.I.'s "King" and Epic artist Shakira's "Hips Don't Lie" are only available as ring tones (through Sprint and Verizon, respectively). Ring tones have the advantage of being potentially more lucrative, at around $2.99 a pop, without giving the customer the entire song -- and they're incredibly popular. "On T.I.'s last album, he sold over 3 million ring tones," says Atlantic Records president Julie Greenwald. "When we sat down to discuss the strategy of rolling T.I. out, we said, 'Let's go out and talk to some cellular ring-tone partners.'
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So does Chris Brown's manager wish she had withheld the single? "It might be smart for me to do that the next time," Davis says of Brown's forthcoming album, which is scheduled for early 2007, "so I can have that impact the first week."