BigShinyThing

A couple of years ago, we pointed out that newspaper covermounts were shaping up as a huge threat to the music (and video) industry hegemonies (our word of the week, kiddies). Look and learn, children: today we read that Prince has done a deal to give away his new album with a future issue of the Mail on Sunday.

Coming as this does the same week that beleaguered retailer HMV announced a 73 percent drop in profits, the industry has responded in the only way it knows how, when faced with a challenge from the ‘talent’: with kicking, biting and scratching. The chairman of the Entertainment Retailers Association, Paul Quirk, is quoted in The Guardian:

It would be an insult to all those record stores who have supported Prince throughout his career [...] It would be yet another example of the damaging covermount culture which is destroying any perception of value around recorded music.

[...] The Artist Formerly Known as Prince should know that with behaviour like this he will soon be the Artist Formerly Available in Record Stores. And I say that to all the other artists who may be tempted to dally with the Mail on Sunday.

Ooo, get her. Like, after his long fight with the labels, here at the start of the 21st century, the Purple God really cares whether his music is on shelves, as long as his fans can buy it (and of course turn up to his gigs at The O2 later this year).

The Wall Street Journal reports on how free covermounted CDs and DVDs are eating into music industry sales.
The Sun tabloid sells about 3.2 million copies a day – a figure which can be boosted by as much as 500,000 copies by including a free CD. According to The Guardian broadsheet, two of the five biggest-selling days for the paper were those with free CDs. The three other top-selling days were big news events: Tony Blair’s election as prime minister in 1997, the death of Princess Diana the same year and 9/11.

UK newspapers have used the strategy for years but the practice has become noticeably more pronounced recently as circulation continues to decline. It is extremely expensive: a CD can cost The Sun £600,000 for disc manufacturering, song rights and packaging. And then there’s the advertising costs. Marc Sands, marketing director of The Guardian, concedes

It is very expensive. But if you get the right sort of CD, people will stay with the paper.

It has also yet to stem circulation declines. The Sun‘s circulation has fallen 8% in the past five years, while sales of the Evening Standard, London’s daily paper, are down 21% during the same time, according to the Audit Bureau of Circulation. Both papers had given away CDs during this period.

Instead music retailers are feeling the impact: sales of compilation CDs, the most popular type of newspaper giveaway, were 7% lower in the first quarter iof 2005 compared with the year before and are now at their lowest level since industry tracking began in 1998. In an average week, six million CDs and one million DVDs are included free with a newspaper. British retailers sell, on average, about four million CDs a week and five million DVDs.

Not surprisingly, the retailers are making moves to halt the trend. Last October, EMI Group Plc agreed to stop licensing songs to newspapers. Sony BMG has also stopped. According to Tony Wadsworth, chairman and chief exectutive of EMI:

We realised the newspapers were getting far more value from our music than we and our artists were.

British record company Sanctuary PLC has also decided not to license songs to newspapers after existing contracts expire this year. The company owns the rights to 150,000 songs and last year allowed the Observer newspaper to give away a CD of the Libertines — one of the most talked about acts at the time. It plans to limit newspaper licensing agreements to little-known acts. “We are only really looking for opportunities that enhance the profile of new, developing artists,” said John Reed, Sanctuary’s manager of special markets.

Oddly though, there is evidence that the promotions can actually help retailers. When the Mail on Sunday, with a circulation of 2.3 million, included a DVD of “The Fourth Protocol,” a 1987 spy thriller starring Michael Caine and Pierce Brosnan, the Music Lovers shop in Norfolk, East England, didn’t bother to stock the DVD. “I thought there would be thousands out there and there would be no point trying to sell it,” said owner Roger Webster, although “someone came in and ordered it because their friend had got a free copy and it sparked their interest.”