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

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

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.”

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