Wary Christmas looms for music retailers

Sat Jul 11, 2009 12:05am EDT
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By Ed Christman

NEW YORK (Billboard) - Retailers expect music sales to be better during the Christmas shopping season than the rest of this year, but most anticipate a case of the holiday blues.

"Last year was such a bad Christmas for music sales that if we can't top that, then we've got a serious problem on our hands," says a purchasing executive at a retail chain who asked to remain anonymous because he isn't authorized to speak about sales projections.

The executive expects year-end sales to be up from last year, which would be the first time since 2003 that fourth-quarter U.S. recorded-music sales haven't posted a year-on-year decline.

But that's one of the more optimistic forecasts. Others say they assume that year-end recorded-music sales will slide in line with the rest of 2009, when year-to-date sales have dropped 14.5 percent from the same period last year, according to Nielsen SoundScan.

A strong release schedule could help slow the decline. High-profile releases expected this fall include albums by Jay-Z, 50 Cent, T-Pain, Leona Lewis and Shakira. But merchants and distribution executives say it's too early to assess the impact of this year's slate.

"Overall, (U.S. CD sales) are down about 20 percent this year," says Universal Music Group Distribution president/CEO Jim Urie. "It may get better due to a strong release schedule, but it won't provide a major improvement."


Most industry executives say the distressed economy, weak CD profit margins and the increasing displacement of physical music product in brick-and-mortar stores by other entertainment products will make it difficult for holiday sales to remain steady over last year, much less show an upswing.   Continued...