Weekly Register: If Track Prices Rise Will Consumers Support Them?

Taylor Swift’s recent record-setting debut week sales for her new single, “We Are Never Ever Getting Back Together” has spurred discussion that tracks will  become as important or more important than albums. Billboard’s Glenn Peoples compares Swift’s singles accomplishment in TEA form against Zac Brown’s album debut (July 29; 48k units) saying, “The album isn’t dead even in my exaggerated example, but it could be a few years away from parity with top 40 track sales. Single tracks also get massive awareness online in the form of on-demand audio and video streaming.”

How likely is this parity scenario and what are some of the dynamics that will affect it? First and foremost, let’s note that overall track sales are only up a modest 6% YTD for 2012 (including Taylor’s feat). In 2010 they barely budged, gaining only 1% and in 2011 they registered a more healthy 8.5% gain according to Nielsen SoundScan. So growth has hardly been overwhelming and although we have seen that it is possible for an artist to stimulate a massive track buy-in, the very fact that Swift set records indicates it is still a very special happening not to be confused with the title, “common occurrence.”

The next area to watch is pricing. As citizens of the SoundScan era we tend to talk about units, but pricing is the underlying measure that determines profits. Album pricing seems to be falling, especially downloads due to special sales and digital store-to store competition. This effect has caused Billboard to put a $3.49 pricing floor on units counted on the album chart sold during the first four weeks of release. However, tracks have actually enjoyed a price increase, with the introduction and stabilization of the $1.29 price level, making TEA album profits more competitive with regular albums. Will labels experiment soon with $1.39 and/or $1.49 levels? I believe we will see that trial balloon fly before long. Unlike the bricks and mortar days when labels completely controlled distribution and therefore pricing, the online world has introduced a new dynamic—free. Some consumers have moved to buying tracks because of the relatively low price and ease of purchase. If prices increase will they still feel that way? Or are they likely to move to an altogether new model—access?

Access or subscription as it is sometimes called brings forth a compelling value proposition—listen to what you want, when you want and wherever you want. This model has already made strong inroads onto desktop computers and mobile smartphones. The auto dashboard is next and that march has already started. We are talking about services such as Spotify, Rhapsody and rdio. Even Pandora, which features personalized programming and although not technically an on-demand variant, still offers access and a large degree of playlist control to the listener. Many of these services are free, or extremely low cost. Ultimately, and especially if faced with rising prices, fans may ask themselves, “Why do I need to carry around these files and copy them from device to device when all the music is available without worrying about that?”

Numbers Trending Lower
A quick week-to-week comparison shows album sales continuing to erode. As regular Weekly Register readers know, that usually has to do with release schedules. In fact, there were no country debuts that could muster even 9k in sales. Josh Turner delivered a live physical only album to Cracker Barrel (No. 9; 8k) and Thomas Rhett debuted at No. 24 with sales of 3.3k. Carrie Underwood rose to the top of the chart, benefitting from an iTunes $6.99 sale price with sales of almost 28k. We often talk about the 300k benchmark for Current Country Top 75 chart and this week the chart was well below that measure, registering a tepid 264k total.

Taylor Swift maintains a firm grip on the top of country tracks list with sales of almost 253k units this week. Her amazing three-week RTD (release to date) total is 1.183 million. Also floating on—well, a “Pontoon” boat—is Little Big Town celebrating the single’s voyage to platinum status in 14 weeks. This week the vocal quartet added another 78k units to its tally. Also in the million-plus club is Hunter Hayes who is becoming a regular on the Top 5 tracks list. “Wanted” added another 65k this week. Randy Rogers Band breaks Top 20 on tracks with week 1 for “One More Sad Song.”

Keep your eyes on the upcoming releases HERE. Stay tuned every Wed. for Weekly Register and thanks for reading!

PS: Congrats to EMI/Capitol Nashville with 80% of the CMA Album Of The Year Nominations!