While Cyber Monday managed to create a stir in most of the retail world, the music industry is waiting for the last week of December and the first week of January for its digital music bonanza. That's when stores like iTunes realize sales from all of the iPods and iTunes gift cards sold during the holiday selling season will finally kick in -- after they have been presented as gifts on Christmas Day.
Music industry executives say that digital sales on Cyber Monday were nothing out of the ordinary, except for CD sales through online stores. Wholesalers like Alliance Entertainment and Super D -- which provide fulfillment services for online CD and DVD sellers -- say they experienced a pick-up in sales over the weekend, especially on Thanksgiving Day (Nov. 26).
While the online retail industry has made a big push in establishing Cyber Monday, Alliance Entertainment president Alan Tuchman says that every year CD sales are stronger on Thanksgiving Day than on Cyber Monday. Last week, he predicted that would be the case again this year, but he couldn't be reached for follow-up on Dec. 1.
While the rest of the retail world experience Cyber Monday on the Monday after Black Friday, the music industry’s peak cyber period is the week after Christmas, when millions redeem digital gift cards and fill newly gifted iPods.
Meanwhile, major label distribution executives say that digital sales since Black Friday have not been anything special, even though Amazon came to the party with an array of Cyber Monday deals. iTunes, however, did not offer any Cyber Monday specials, according to press reports, even though its parent offered deals on accessories, phones and iPods. And Wal-Mart extended the Cyber Monday concept to Cyber Week, but it did not include any music in that promotion, according to the deals listed on its site.
On the other hand, Amazon, Wal-mart and iTunes run special sales practically every day and iTunes apparently decided not to break ranks from its typical branding of promotional sales.
It’s not surprising that music is not featured in promotional campaigns designed to drive digital traffic on Cyber Monday, because in addition to the fact that downloads don't sell like CDs during the selling season leading up to Christmas, music in general had its lowest profile ever since the big box circulars began driving music sales in the mid-’90s.
Target's circular just mentioned that it would have 60 CDs at $6.50, with only three minis (i.e., miniature album covers); Best Buy featured four mini-covers; and Wal-Mart only featured one mini that of Miley Cyrus’ "Time Of Our Lives" EP, which was on sale for $5, marked down from $8. That title is an exclusive to Wal-Mart as part of the overall deal in which Wal-Mart is selling the artist's clothing line. So the mini was included in a strip in the circular that featured the artist to promote Cyrus day at the chain's stores. On Saturday, Wal-Mart showed exclusive footage from her tour and put her clothing line on sale, as well as the CD.
As for why retailers don’t promote digital downloads heavily for Black Friday and digital Monday, the head of distribution at one major says he doesn't have his analysis staff track those sales daily at this point, because sales of the format is nothing extraordinary at this point in the holiday selling season. "But come Dec. 26, my staff and I will be pouring over those spreadsheets for hours daily for the next few weeks," he said.
Last year in the week following Christmas, digital track sales rose to 47.7 million, up 126% from the 21.1 million sold in the prior week. Moreover, that total represented 12.9% from the 42.3 million scanned during the corresponding last week of 2007. And last January, digital track sales were up 20.6% to 138.8 million from the previous January when sales for the first month of 2007 totaled 115.1 million.
In contrast so far this year, album sales are down 13.5% to 309.8 million units for the year-to-date period ended Nov. 22, from the 357.8 million units generated during the corresponding period in the prior year. For those same time periods respectively, CD sales are down 19.6% to 240.2 million units, from the 298.9 million units generated in the prior period. On the other hand, digital track sales are up 10% to 1.35 billion year-to-date versus the 1.3 billion scanned in the same time frame of the prior year.
Another distribution executive at yet another major interviewed for this story says that according to his company, analysis of sales results, digital album sales on Cyber Monday were heavier than they were during the holiday weekend, while the track configuration sold better on Sunday than it did on Cyber Monday. But Thanksgiving Day and Black Friday were the lowest digital tracks sales days of the week. All in all, he says, "the growth of track sales over prior Thanksgiving week 2008 was not remarkable."
A senior distribution executive at another major says the only thing that happened interesting digitally is that Susan Boyle's "I Dreamed A Dream," which is projected to have scanned 650,000 units, may have sold about 7% of those units digitally.
Meanwhile, one of the distribution executives tempered Billboard's report that while some chains may have reported single digit declines in music sales over the holiday weekend, one of the three big box chains -- Wal-Mart, Target or Best Buy, he didn't specify -- suffered a 35% decline in music sales for the weekend, which is very alarming, he says.