On Music Row: Is country music an economic indicator?

Monday, July 7, 2008 at 2:11am
Carrie Underwood

The first half of 2008 is now officially in our rearview mirror and country music album sales, which started slipping in 2007, remain under duress — down 16.6 percent YTD and showing more hurt than the total industry which is down a less severe 11 percent.

But why should country be performing poorly compared to sales overall?

“We’ve been looking for answers since the middle of last year when it became clear that country format sales were off,” says Johnny Rose, VP Marketing & Sales at Show Dog Nashville. “People were saying it must be digital convergence, peer-to-peer or we’re in a transitionary period, but I just didn’t see how.

“There are only a couple of country songs among the top 20 selling iTunes titles for 2007, so it didn’t make sense that we were feeling this strong impact from digital convergence when most of our marketplace wasn’t involved in that part of the business,” he said. “So I started looking at other things like radio, release schedules, etc., but there weren’t any drastic differences. That left only one answer—the economy.”

Country sales were indicating—before most people realized it—that the economy was worsening, Rose added.

“Our consumers make up a large percentage of the economy, they are private business owners and workers for small and large companies,” he said.

Country music buyers, he said, are dealing everyday with economic factors like soaring gas prices, a mortgage crisis and inflation.

“Country is being hurt a little bit more by what we are seeing in the market right now than mainstream music sales,” agrees Tom Banks, Sony BMG’s vice president of finance. “Our customer base tends to be a bit more rural and the economic impact means that discretionary dollars are taken away by high energy prices and inflation.”

Banks doubts that downloading among country consumers has reached critical mass, but points to other activities which may be hurting sales.

“Most of our folks are still in that 35-45 year range and while they may be catching up on the Internet, when it comes to the country consumer, it’s more about ripping. The CD pass along—taking it to the office and letting 20 people put it on their iPod. From an educational standpoint many people still don’t understand that is theft. We need to do a better job educating people to make better choices,” said Banks.

Rose worries that the industry isn’t embracing change.

“The industry used to wait for a new format or delivery system to rescue us,” says Rose, “but in some ways this issue is beyond our control. There are not a lot of ways out of this economic spiral until things change. We all have to analyze every dollar we spend to reach our consumer. Right now the marketplace has a big hole in its pocketbook.

“In past times when the economy turned tough, country music was something that seemed able to sustain because it was inexpensive, and helped consumers take their mind off of their woes. But today the consumer must weigh purchasing decisions against lots of competitive products—video games, DVDs, concert tickets, clothing, food, milk and more!”

He says that now is the time to become as aggressive as possible.

“When we look at our product’s pricing and value compared to those competitive products—we can’t stick our heads in the sand,” Rose said.

Banks rhetorically asked how the industry can restore people’s faith in music and make them want to assign a value to it?

“By bringing more hits to the format and building a stronger connection with the fans [is how]. It’s about building bigger stars and getting the word out that music does have a value, it is not free,” Banks said. “There’s always been one truth in the music business: People will pay for a hit, buy the single, the ringtone, the album and everything else when they have a relationship with the artist.

“Our biggest task as an entertainment company is to connect the artists we believe in with the consumer that doesn’t know them yet. There’s more channels to build that relationship than ever before, but we have to restore people’s belief that music has a value and it is not just about ad-supported Web sites.”

Note: Country digital album sales as a percentage of total country album sales have jumped from 4.9 percent at the end of 2007 to 7.2 percent YTD 2008, which shows growth, but all genre digital album sales are over 15 percent of total album sales.

This data supports the idea that downloading is less popular among country fans than for music in general. Also, the country digital album numbers are not evenly divided among all the format’s artists. A small handful of acts such as Taylor Swift, Carrie Underwood, and Rascal Flatts account for a disproportional share of country digital album sales.

Filed under: City Business
Tagged:
By: KelliePicklerFan on 12/31/69 at 7:00

The author is right in that I have less money to buy that wonderful album. I now have to spend that $20 or less to put gas in my car just to get to work and that doesn't even make the tank full. I used to spend that money on albums all the time!I AM dedicated to my favorite artists and don't download just to support them. We get close to our artists and wouldn't dare to cheat them.