Deep Dive

Christmas Bonus: Inside the High-Margin Business of Streaming-Focused Holiday Compilations

Enya
Enya Courtesy Photo

In a world where Alexa fields 10,000 requests a minute to play holiday music in the United States alone, labels are creating seasonal playlists that are formatted like albums, with bar codes and titles that take advantage of voice-activation tech

Russ Crupnick, managing partner at industry analysis firm MusicWatch, remembers the days when listening to Mariah Carey's 1994 Merry Christmas album meant "driving to Sam Goody" to pick up a copy. Twenty-five years later, “Technology has automated Christmas,” he says. “While you’re making dinner or with the family, you just say, ‘Hey, Alexa, play Christmas songs,’ and you’re covered.”

Since Dec. 1, Alexa has been asked to play holiday music over 10,000 times per minute in the United States, according to a representative for Amazon Music. And as streaming and voice-activation technology enable listeners to take an increasingly laid-back approach to the season, labels are eyeing an emerging, low-stakes source of revenue: streaming-focused, label-generated holiday compilation albums.

Essentially, labels are packaging previously released Christmas songs from the vault and servicing these collections to digital service providers (DSPs) as if they were albums. These compilations do not come with a physical counterpart, and while digital downloads are available, the vast majority of listening comes in the form of streams.

For example, Universal Music Group released Best Christmas Songs 2019 in November, which includes Justin Bieber’s “Mistletoe” and The Pussycat Dolls’ “Santa Baby," and Christmas Sing-Along Songs, featuring Stevie Wonder and The Jackson 5. Sony Music Entertainment’s offerings include Santa’s Happy Hour, also released in November, with Dean Martin’s rendition of “Silver Bells” and several Mariah Carey classics; and Family Christmas Singalong, a 57-song collection that runs the gamut from The Ronettes' "Sleigh Ride" to John Denver's "Christmas for Cowboys."

These compilations may look like playlists, but they are treated by the label groups as album releases replete with a universal product code. That way, the collections automatically show up in streaming services’ new-release sections, reach the eyes of programmers and curators, and for single-artist releases such as Enya's Christmas Secrets — which Warner Music Group's Rhino label released in early December — show up at the top of that act's page. An artist-curated playlist, with the same track listing, wouldn’t be as visible.

There’s a reason you don’t see these on albums charts: Billboard and Nielsen Music attribute consumption toward compilations differently than traditional artist albums, and most compilations are only allowed to chart based on album sales.

These compilations are also distinguished by their simple, even generic easy-to-search titles (like Best Christmas Songs 2019). The assumption is that most people are more likely to search for “holiday" or "Christmas" music in general than to seek out a specific release and then click the first option that comes up. Looking at the top 100 holiday albums across all streaming platforms, the vast majority are slight variations on “Christmas Hits” or “Classic Holiday Songs,” and most are credited to "various artists."

Tailoring a compilation to take advantage of voice-activation also means there’s little need for a marketing plan. “If you think back to the time of CDs, if an artist put out a Christmas album, you had to get it in stores, so maybe you had them do an appearance on Oprah,” says Crupnick. “Now, you could put together this compilation and let the technology do the [marketing] work for you."

Solo artists with enough holiday songs in their catalogs can also release streaming-focused compilations of their own. Enya's Christmas Secrets is a prime example: On Dec. 6, the collection of her previously released holiday singles dropped on streaming platforms with virtually no promotion from her label, Rhino (through Warner Music U.K.) and no physical counterpart.

“We did some analysis on Enya’s catalog, and her streaming was fantastic, particularly in the U.S.,” says Kevin Gore, Warner Music Group’s president of global catalog, recorded music and arts music. “We came to an agreement to make it easier for the consumer to find [her] Christmas songs. We absolutely identified an opportunity.”

This doesn’t mean that labels are giving up on traditional holiday albums. Some have made holiday music their specialty, like Carey, Michael Bublé and Pentatonix, who are the most-requested artists on Amazon during the holidays. And Idina Menzel and Lea Michele are among the acts who released holiday LPs this year to streaming platforms as well as in digital download and physical formats.

But given how easy the streaming-only compilations are to release and essentially leave on auto-pilot, Crupnick says the potential upside is very attractive. “That's not to say that if you’ve got a major A-list artist, a Christmas album doesn’t make sense,” he clarifies. “On the other hand, why make that kind of investment when you know you’re going to get streams [from a compilation]?"

Additional reporting by Glenn Peoples.

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