Mon, Feb 06, 2006 - Page 13 News List

Rising' up again

Music fans are busy buying singles off the Internet. Some in the music industry are worried that the boom in catalog sales constitutes a drain on the old CD market


Axel Rose, lead singer for the band Guns N' Roses.


More than 20 years after the rock band Survivor scored a hit with Eye of the Tiger, the song is rising up the charts again, notching brisk sales as a single online. Since the song became available on services like iTunes about a year and a half ago, it has sold more than 275,000 copies.

It is hardly alone. While current radio hits still dominate the digital music charts, classics like Lynyrd Skynyrd's Sweet Home Alabama, Queen's We Will Rock You and the Eagles' Hotel California are regularly ranking among the 200 best-selling tracks on the Internet, a sign of their staying power even in the accelerated culture of modern pop music. Resurgent novelties like Vanilla Ice's Ice Ice Baby are racking up big sales, too.

Their popularity indicates that fans are flocking to online services like iTunes at least in part to pluck out celebrated oldies, not to mention the occasional 1990s alternative memento (Oasis' Wonderwall has sold more than 251,000 copies so far) or 1980s strip-club staple (Def Leppard's Pour Some Sugar on Me has surpassed 216,000). All of this comes at a time when fans enjoy a wealth of new choices in how to buy and listen to music.

But the popularity of such songs raises a troubling issue for the music business, which relies in part on the huge profits generated by greatest-hits collections, perennially selling classic albums and the continual repackaging of old material. The question: What if fans who might have paid for a full album of "the very best" of an established act instead choose to pay substantially less and simply buy the very, very best song?

As recording formats have evolved over the decades, the industry has profited from the marketing of previously released music, as fans replaced their vinyl LP collections with compact discs of the same albums, for example. Since the older classics are compa-ratively inexpensive to reproduce and market, they typically carry higher profit margins than music from new acts. But the migration of music from shiny plastic discs to online services has disrupted the industry's cycle of replacement, and record labels are only In the more utopian view of the shift, the breadth of songs avail-able online and the ease of purchasing them will prompt more consumers to buy more music than ever. With the unlim-ited "shelf space," record companies will be able to market everything in their archives at minimal expense, breathing new life into obscure or out-of-print material and generating new profits.

But critics warn that the industry may be in for a long wait, and significant financial hardship, before realizing that dream -- particularly as sales of CDs decline.

Album sales have dropped for four of the last five years, and while sales of digital singles are booming, that has not yet been enough to offset the drop. Music companies sold more than 350 million singles last year, a jump of 150 percent over the previous year's total. Sales of full digital albums increased even more, rising more than 190 percent to 16.2 million.

Sales of older releases, known in the music business as catalog, account for a huge share of the industry's fledgling online business. Executives at the major record companies say catalog material makes up somewhere between half and two-thirds of their sales of digital singles. (Catalog accounted for about 37 percent of CD sales last year, according to Nielsen SoundScan.)

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