Country’s Shrinking Middle Class

The quote of the week belongs to Sony CEO Howard Stringer, who when asked about the success of Twitter and other social networking sites replied, “A lot of people are doing very well at making very little money. It’s not a club I’m looking to join.”

The joke may be on the Sony CEO because, know it or not, he’s a card carrying member of the country [music] club which can certainly be described these days as “making very little [much less] money.” Sales are down, margins crunched, marketing costs up, labels continue to buy their way up the radio charts and retail shelf space evaporates while most players do the same ole, same ole shuffle. Most troubling is the format’s lack of an artist middle class.

It’s easy to point to the superstar crowd—Swift, Underwood, Flatts, Sugarland, Paisley, Urban, Chesney, Strait, McGraw, Keith and maybe a few others we’ve mistakenly omitted, but what about the up and comers? Where is country’s middle class? A quick look at the Top 10 selling country albums this year names the following; Swift, Hannah Montana, Rascal Flatts, Zac Brown Brand, Keith Urban, Darius Rucker, Jason Aldean, Sugarland, Swift and Underwood. Only two of those CDs have broken the million mark this year; only three have passed the 500k goalposts, which is the start of profitability for many labels.

So yes, based upon RTD sales (release to date over 500k), we can point to a few middle class candidates, such as ZBB, Darius and Aldean named above plus toss in a pinch of Lady Antebellum and some Jamey Johnson for seasoning. That still leaves precious few to fill the spots at the top. And we invite readers to answer this one for themselves: How many of the superstars named above passed their career zeniths long ago? [Answer: lots.]

Google CEO Eric Schmidt, who, like Stringer was attending an ultra-exclusive media mogul gathering in Sun Valley, Idaho called the faltering economy “the new normal,” advising companies to “figure out how to be happy and get our lives together in this new configuration.”

One overdue prescription for country’s “new configuration” might be to get smarter about radio promotion. Entire Nashville business models are built upon the promise of airplay, factoring zero for sales risk. Few if any other business industry would accept such a deal. Sure radio exposure remains an important part of the success mix, but how many records have we seen in recent months that paid and paid to enter the Top 10 mainstream airplay charts only to reap coal in their Christmas SoundScan stockings? Marketers can judge early on if a song is going to move the sales needle using data from a myriad of available sources. Isn’t it time to get more aggressive about indexing the correlation between airplay and sales and stop the tail from wagging the dog?