Is Subscription Streaming Making Fourth-Quarter Blockbuster Albums Obsolete?
Last Oct. 27, Taylor Swift released what the country-crossover star called her "first documented pop album," 1989. By year's end, it had already sold 3.7 million copies, according to Nielsen Music. Swift's blockbuster, not available on Spotify, might be among the last of its kind: big pop albums issued in the fall to take advantage of the holiday shopping season.
Whether on vinyl, cassette or CD, albums historically have made cheap, convenient stocking-stuffers, as families swarmed shopping malls and big-box retailers. So labels -- and executives trying to make their annual numbers -- have come to rely on a bounty of fourth-quarter releases. (This fall's offerings range from albums by 5 Seconds of Summer to Justin Bieber.) With the rise of digital downloads, the post-Thanksgiving sales boost often stretched into the next year. "Folks would get iPods over Christmas, and we always saw a jump in digital [sales] in January," says Russ Crupnick, managing director at research firm MusicWatch.
Streaming services threaten recorded music's traditional schedule. Full access to Spotify, Apple Music and their ilk requires a paid monthly subscription, whereas album and song downloads are a la carte. As consumers gradually move away from buying a particular album and toward paying $10 a month into the record business as a whole, industry observers and executives see less imperative behind an October street date.
"You need not release your big titles at Christmas in the access world," says Republic Records founder/president Avery Lipman, referring to the subscription-streaming future. "If anything, you may not want to release your biggest titles there. Advertising rates are more expensive, generally, during that time of year. You may want to spread it around."
The portion of albums sold during the October-to-December period already has been drifting downward. From 1999 to 2007, the fourth quarter averaged 33.1 percent of annual sales, ranging from as high as 35.1 percent in 2003 to a low of 32.1 percent in 2004, according to Nielsen Music data. Since 2008 (the year Spotify launched), fourth-quarter sales have averaged 31 percent, bottoming at 29.1 percent in 2013. "Giving the gift of a CD isn't what it used to be," says Crupnick. "To me, it increasingly makes sense to fill up more of the calendar to get attention for releases."
This drop is only a couple of percentage points. And Swift's 1989 contributed to an increase in the fourth quarter's share of sales to 31.6 percent in 2014. But those numbers could be a blip after the dramatic changes to come. Streaming only keeps growing: On-demand streams have risen each quarter during at least the last two-and-a-half years, from 25.5 billion in first-quarter 2013 to 75.8 billion in second-quarter 2015, according to Nielsen.
"The generation under 40 is used to paying for things monthly, like Netflix, for under 20 bucks," says Joe Conyers III, vp technology at Downtown Music Publishing Group and GM of Songtrust. "The older generation is going to learn that in the next 24 months as well."
The fourth quarter always was more important for the industry than for consumers, says Mark Cunningham, a manager with Red Light Management. "People just want to listen to music," he explains. "It doesn't really matter to them when it comes out."
This article was originally published in the Sept. 5 issue of Billboard.