Despite efforts by record executives to stanch declining CD sales by releasing a cavalcade of big-name artists during the critical Christmas shopping season, early sales figures show an already struggling industry may now be in even worse shape.
In the five weeks since mid-November, when the record labels began their biggest holiday blitz in recent memory, compact disc sales were down 12.9 percent compared to the period last year, according to data from Nielsen SoundScan, which tracks music sales.
That poor performance comes even as new CDs from artists like Shania Twain, Mariah Carey, Jay-Z and Paul McCartney have sold well, and has pushed overall sales for the year down further. Through the week ended Dec. 15, the record industry is off 10.8 percent, compared to a year earlier. On Nov. 10, the music business' tally for the year had been down 10.5 percent from last year, according to Nielsen SoundScan.
Unless there is a crush of last-minute shoppers and bargain-hunters in the week after Christmas, the industry's flood-the-market strategy will have failed, music business analysts say.
"Given the level of star power that's out there, the sales are disappointing," said Michael Nathanson, an analyst at Sanford C. Bernstein. "It's a worrying thing. It doesn't bode well for next year. I can't imagine a line-up like this for next Christmas. It just says that next year is going to be bad."
Industry executives blame the decline on Internet file-sharing and counterfeiting, while consumers complain of a lack of exciting new talent and uninspired music from older artists. Further, a weak economy has forced people to become choosier about how they spend their money and some have decided to spend it on video games and DVDs, music industry analysts say.
Holiday sales have always been important to the music industry -- with more than 30 percent of the industry's sales coming in the fourth quarter -- and the decline in sales during the season last year prompted executives to be particularly aggressive this year.
But the holiday onslaught appears to have helped only two of the big five record labels increase their overall market share. The Universal Music Group, a subsidiary of Vivendi Universal, has bolstered its already commanding lead and improved its overall market share. During the five-week period ended Dec. 15, its market share rose to 31.2 percent from 28.4 percent for the week ended Nov. 10, according to Nielsen SoundScan. And BMG, a unit of Bertelsmann, increased its share to 17.2 percent from 14.6 percent on Nov. 10.
The news is not so good for the other three major labels. The market share of Sony Music Entertainment, a division of the Sony Corp, has fallen to 15 percent from 15.7 percent. Warner Music Group, part of AOL Time Warner, has dropped to 14.2 percent from 15.9 percent. And the market share of EMI Recorded Music, part of the EMI Group, has fallen to 7.2 percent from 8.6 percent on Nov. 10.
Despite the glut of music, some artists have prospered. Twain, the pop country singer, has been one of the biggest successes this season, selling 7.7 million copies of her album, "Up," since its release on Nov. 12. Jay-Z's "The Blueprint2: The Gift and the Curse," on Universal's Roc-A-Fella/Def Jam label, has sold 1.1 million copies between Nov. 12 and Dec. 15. And record buyers have snapped up 462,000 copies of McCartney's double CD, "Back in the US -- Live 2002," on EMI's Capitol records since Nov. 26.
On the diva front, Carey, on Universal's Island Def Jam label, and Whitney Houston, who records for BMG's Arista label, are also doing decently. Without significant radio play Carey's album, "Charmbracelet," sold 240,000 copies during its first week -- her second biggest debut -- and Houston's comeback album, "Just Whitney," sold 207,000 copies in its debut week.
The Recording Industry Association of America has increased the number of investigators looking for illegal vendors involved in music piracy activity, said Hilary B. Rosen, its chief executive.
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