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Why Music Retail Is Having a Blue Christmas

Growth in streaming activity for holiday music may be cannibalizing album sales — leading some to question whether labels will begin paring back their physical offerings.

Is this finally the year that Christmas music streaming is cannibalizing holiday music sales? The raw numbers appear to suggest that’s the case, and some music industry execs have taken notice.

Since 2017, seasonal music album sales — physical formats and digital downloads — have dropped 61.8% to 1.44 million copies (so far) in 2022, as of Dec. 8. That’s down from 4.1 million copies in 2017, even though album sales are essentially at the same level of 90.55 million copies this year versus 91.64 million back then, according to Luminate data up to Dec. 8.


What’s more, seasonal music has held steady during that time, at 6.41 million album consumption units so far in 2022 versus 6.24 million album consumption units in the comparable 49-week year-to-date period of 2017, with an overall annual average coming to 6.3 million album consumption units during that five-year period. But within that, as you might expect, streaming has more than doubled, from 3.2 billion in overall holiday song streams, as of the 49th week of 2017, to 6.68 billion holiday song streams so far this year.

“This might be the year that streaming is impacting Christmas sales,” says one major label executive.

But while music wholesalers concede that the genre is not having the greatest holiday season in terms of sales, they counter there’s another reason this year’s numbers are sluggish. They argue 2022 is missing a key ingredient that in the past has proved to be a big catalyst for the overall genre during the holidays: a big, new Christmas album that drives traffic and fuels sales across the entire genre.

“While a lot of the new albums are doing fine and have done a decent volume, not one of them has been a breakaway hit,” says Alliance Entertainment senior vp of purchasing and marketing Laura Provenzano. In years past, big holiday music albums came from the likes of Josh Groban and his Noel album, which scanned 3.7 million album copies in its debut year of 2007 and now totals 6.32 million album consumption units in the U.S.; Michael Buble‘s Christmas, which scanned 2.45 million copies in its release year of 2011 and a total of 4.5 million album consumption units to date; or, going back further, Kenny G‘s Miracle, the Holiday Album, which scanned nearly 3 million copies in its 1994 debut. Those albums really stoked the genre’s sales numbers in the years they were released.

Besides lacking a big album this year, music merchandisers say the complexion of physical sales has changed, with more titles coming out in the expensive vinyl format while budget-priced CDs’ role in driving holiday sales has faced diminished floor space in discount department stores. So while merchants are realizing more revenue-per-copy thanks to vinyl’s popularity, they’re also seeing a drop in CD unit sales because of a squeeze on budget floor space.

“Some key retailers have pared back their presence in the budget business; there are fewer $5 bins on the sales floor nowadays,” offers Provenzano. Meanwhile, as more holiday albums come out on vinyl, “now that a lot of holiday music has a higher price point, it is no longer as much of an impulse item,”  Provenzano adds.

For example, as of week 49 of 2017, physical holiday and seasonal album sales totaled 2.987 million copies, with 100,000 courtesy of the vinyl format. As of the 49th week of this year, total physical sales were 1.142 million, of which 637,000 were in the CD format and 503,000 vinyl, according to Luminate.

Music is generally considered impervious to economic downturns, but that doesn’t mean all genres are immune to the threat of recession, especially after the COVID-19 pandemic changed everything, music merchandisers say. While vinyl has been growing in leaps and bounds, when it comes to holiday music, shoppers are much more price sensitive these days, agrees All Media Supply music buyer Joe Pica

Music retailers and wholesalers say that even if turns out to be a softer year for holiday music, many perennial Christmas titles are still selling consistently, if not as much as they once were; and that some of the new albums are doing pretty well too. The new releases they point to are Lindsey Stirling‘s Snow Waltz, which so far this year has generated 37,000 units — 25,000 physical copies — since its October release; and her 2017 collection Warmer In the Winter, which has generated 25,000 album consumption units so far this year and 455,000 units — 176,000 physical — since its release. Other new releases include the Bocelli’s A Family Christmas at 66,000 album consumption units — including nearly 52,000 physical copies — since its October release; and the Backstreet Boys‘ A Very Backstreet Christmas, which has so far accumulated 57,000 album consumption units, of which 38,000 are physical copies.

If only, music merchandisers lament, there was that one big album emerging from the pack. In fact, merchandisers were hoping the Backstreet Boys album would fill that role since it was initially going to be paired with a Dec. 14 special on ABC. But that show was pulled due to allegations that singer Nick Carter raped a 17-year-old girl during a 2001 tour — an accusation which he has denied. That news initially broke on Dec. 8.

A look at daily sales for that title for the last two weeks shows that the album is still selling at about the same pace, ranging from 1,100 to 1,400 copies daily through Dec. 12, with the exception of a 7,000 album consumption unit bump on Dec. 5. But even though its sales and streaming activity appears to be holding despite the allegations, the album is unlikely to enjoy a windfall in incremental sales that the holiday TV special would have delivered had it aired.

Besides new releases, other Christmas albums issued over the last few years — including Dolly Parton‘s A Holly Dolly Christmas — are also still generating healthy activity. Kelly Clarkson‘s When Christmas Comes Around has generated nearly 51,000 album consumption units, of which 15,000 copies are in physical formats, amounting to 106,000 units overall since its release in Oct. 2021; while Carrie Underwood‘s My Gift has garnered 46,000 album consumption units so far this year, of which 17,000 are physical, and 628,000 album units since its 2020 bow. 

Meanwhile, Pentatonix has built up a strong holiday brand through six seasonal albums, which so far this year have garnered 251,000 album consumption units including 28,000 units from its latest effort, Holidays Around the World. However, only 10% — or 25,000 units — are physical copies. Trans-Siberian Orchestra is another holiday music brand still putting respectable numbers up on the board, as its four genre albums this year have collectively achieved 111,000 units in album consumption activity, of which nearly 28,000 are physical copies.

But even with that showing from current artists like Underwood, Clarkson and Pentatonix, plus legacy artists like Trans-Siberian Orchestra, Ingram Entertainment’s head of sales and marketing Steve Harkins wonders if we are seeing a changing of the guard in the holiday genre. For instance, the holiday seasonal album chart for the week ended Dec. 8 shows that albums from Christmas perennials from the last 50 years, like Bing Crosby, Nat King Cole, Frank Sinatra, Dean Martin, Andy Williams, Elvis Presley, Johnny Mathis and Burl Ives, collectively have only four albums in the top 25 of the Dec. 8 chart; and another six albums in the second half, from Nos. 26 to No. 50.

“We have always relied on the old staples, but now we are seeing more contemporary artists moving up into the top spots on the holiday charts; it could be a generational transition,” says Harkins. “Some of the crooners are being replaced. We are selling less units from them, although they do still sell steadily.”

Others disagree with that assessment, saying that while the old guard may not sell as well as they used to, they still do well, according to Provenzano. Or as All Media’s Pina puts it, “Are the kids today buying Bing? I find that hard to believe. But we still sell plenty of Alabama‘s Christmas album and other [perennial] holiday sellers keep plodding along.”

While the rise of newer holiday music may be true so far this year for the seasonal album chart, it’s not so for the overall holiday/seasonal song streaming chart. Of the top 25 in that chart, only three songs — Ariana Grande‘s “Santa Tell Me” at No. 6, Pentatonix‘s “Hallellujah” at No. 17 and Sia‘s “Snowman” at No. 20 — are from the last 10 years. That’s down from the prior year, when four songs within a 10-year release window made the Top 25 year-to-date holiday songs in the period ending Dec. 2, 2021. In fact, this year only 22 songs in that chart’s top 100 have been released in the last 10 years, and overall, only 34 of the top 100 holiday season songs were released in the current century. As for new holiday tunes released this year, only four songs made the top 100 holiday season songs as of Dec. 9, with Lizzo‘s “Someday At Christmas” showing the most activity at No. 55.

Some holiday classics remain strong sellers year in and year out, and some even grow stronger every year. Alliance’s Provenzano wonders how many copies of the Vince Guaraldi Trio‘s A Charlie Brown Christmas the industry can sell every year. Since 2017, that title has grown every year, from 76,000 album consumption units to nearly 191,000 units as of the 49th week of each subsequent year. This year represents its strongest frame yet, with the album up slightly from 189,000 last year, which was better than 2020 (164,000), 2019 (134,000) and 2018 (88,000).

But other traditional big holiday sellers, like the Mannheim Steamroller albums — consisting of nine studio and four compilation or live albums dating back to the late 1980s that have collectively amassed 23 platinum awards from the RIAA — have slowed down considerably. This year, that catalog has generated about 75,000 album consumption units so far, and of that only a little more than 3,000 were physical sales.

Still, the labels haven’t given up on their perennial sellers. They’ve begun boosting sales of various titles by refurbishing those albums, in some cases adding bonus tracks like the eight extras on Holly Dolly Christmas; or issuing the albums in different colored vinyl like with the Vince Guaraldi Trio classic. Up in Brighton, Mass., Newbury Comics buyer Larry Mansdorf says the latter LP is the chain’s No. 3 selling album — overall, not just seasonal — thanks to the chain carrying the album in green-swirl vinyl.

Still, unless holiday season album sales rebound, the major labels might begin to pare back their offering, says one label executive working in catalog. As it is currently, about 2,300 holiday Christmas titles are still in print, including about 400 that are also available in the vinyl format, wholesalers say.

“This may be the year we look at our Christmas title range and see what’s worth keeping in physical print,” the label executive says.