A week ago I could have told you two things: first that Lady Gaga’s ‘Born This Way’ would debut in the #1 spot, and second that the Amazon ‘giveaway’ would push an awful lot of copies.
What is the source of my mystical powers? The fact that even I, as a non-pop music person, knew the release date and other pertinent details long before the launch. I cannot imagine that anyone with any regular exposure to commercial TV or radio or the internet who didn’t know about this. How over-the-top was the promotion?
From an article at MTV News:
no album in recent memory has been promoted to the degree that Born This Way has. You could hear it on FarmVille, in a Google Chrome commercial or through a special version of Tap Tap Revenge. You could buy it for 99 cents on Amazon.com, pick it up with a non-fat double latte at Starbucks (which also hosted an online Gaga-themed scavenger hunt) or get it at Best Buy with the purchase of a mobile phone and a two-year service contract.
That’s to say nothing of the more than 20,000 “non-traditional” retailers that also stocked it … noted musical hotspots like CVS Pharmacies, Whole Foods and Walgreens.
In other words, not only are they pushing the album as ‘music’, but also as a pack-in incentive for other products and an impulse buy like a candy bar. We could debate that this reflects the cultural devaluation of music as an art form … but why bother as the artist herself was leading the charge pushing the album as more of a ‘stance’ than an actual musical statement for the last several months.
So it is unsurprising to see that Born This Way was the #1 album … by A LOT! It is only the fourth album in the last 6 years to break a million copies sold – and I think that figure alone tells us quite a bit about the rationale behind all of the promotions.
Let me be blunt – this was all a numbers game: the label wanted to get a super-high sales number. Look at the following graph to see just how it stacked out. The chart calls out Mumford & Sons at #10 selling 25,000 copies, but we also know that Adele’s 21 was #2 with about 150,000 sold.
It is also interesting how the ‘sales’ distribution broke down – of the 1.1 million copies ~60% (662,000) were digital and ~40% were physical copies. Of the digital sales, more than 440,000 were sold through Amazon – meaning that more than 40% of sales went through Amazon! That would be an astounding figure but for one thing:
Amazon was giving it away.
But wait, it wasn’t free! That’s technically correct, but it has been a decade since Steve Jobs stated – and then backed up with data – that the $0.99 threshold is a level at which people can buy without thought or guilt. We have seen it with songs and with apps … so imagine the impact on albums!
Of course Amazon entered into this knowing full well what they were doing, as according to CNET:
Using the promotion as a way to drum up business for its cloud services, Amazon actually lost money on the deal as it still had to pay Universal Music Group the full wholesale price for each copy of the album.
When I say that this was a ‘numbers game’, I am not talking about money but about the number of transactions they could amass in the first week. I have no idea how the negotiations with Amazon went, or Best Buy, or anyone else who was eating the full price to use Lady Gaga as a promotional tool … but it is already clear that her label will spend way too much money to prop her up as the most amazing mega-star ever.
I don’t mean this as a discredit to Gaga and what she has accomplished through loads of hard work, but once Universal decided she was the horse they were going to ride to keep their fat paychecks coming, it was like the dumb kid who got into an Ivy League school because his parents donated a new building. How do I know this? After her last mega-tour that supposedly made $200 million, Lady Gaga was $3 million in the hole. It was a mega-event, but with so much money spent on all of the glitter and flash, someone lost sight of the fact that these tours are supposed to be the main source of profits!
A while ago I looked at how much an artist made on each album sale, which basically says that of the average $10 selling price, the artist makes just under $1 (at best) while the label nets just over $6, leaving $3 for Apple/Amazon/whomever.
Based on those numbers, and assuming that similar to Amazon everyone paid the full $7 to Universal, Lady Gaga herself made ~$1 million this week, and Universal pulled in ~$6 million. In reality, Universal likely spent well in excess of $5 million in promotions, and Lady Gaga herself likely is leveraged for some amount. That means that in spite of pushing hard, this wasn’t a huge money maker – it was all flash and no substance as the saying goes.
Looking at the list of all records selling more than 1 million copies in a week, we get a feel of the actual money involved. The closest sales numbers to Lady Gaga is 1998′s Live Garth by Garth Brooks which sold 1,085,000. It also represents a business model from the ‘golden era’ when nearly all sales were full album and on physical media. So I decided to compare how much gross income was generated with that record compared to Lady Gaga … and the results are sobering!
A record that sold ~2% fewer copies made 60% more money!
Here are who I think are the winners and losers based on this week:
- Lady Gaga – hey, she still made loads of cash, furthered her image and success.
- The ‘good old days’ protection units at record labels – they can say ‘see, the right record with an artist controlled by us can still sell millions’.
- Record executives – this sort of news will help prop up the image that ‘all is well’. And keep up their salaries.
- Every other pop artist releasing records – in any medium, when all attention is on a single artist/game/whatever, everyone else suffers.
- Adele - I call her out because her record has already sold more than 2 million copies based on one single, and loads of great word of mouth … oh, and she can sing. She represents the sort of thing that record companies like to see happen about once every few years, but also is a threat to their way of life.
- Consumers - did you buy the record? I know I did – and for $1, it really doesn’t matter that we listened to it once as a family and decided it was mostly crap, and it is already off my iPod and my wife and older son never added it to theirs. Problem is – everyone who did the ‘$1 impulse grab’ counted as much as those who paid $12 – 15 on iTunes or at Walmart. And by doing so, we told record companies ‘we want more of this’.
- Progressive minded folks at record labels – this sort of ‘victory’ for those opposing change will set them back significantly.
of every album that managed to sell more than 1 million copies in its first week:
January, 1993: The Bodyguard: Original Soundtrack Album, 1,016,000.
December, 1998: Garth Brooks, Live Garth. 1,085,000.
June, 1999: Backstreet Boys, Millennium, 1,134,000
April, 2000: *NSYNC, No Strings Attached, 2,416,000
June, 2000: Britney Spears, Oops!… I Did It Again, 1,319,000
June 2000: Eminem, The Marshal Mathers LP, 1,760,000
November, 2000: Limp Bizkit, Chocolate Starfish & the Hot Dog Flavored Water, 1,055,000
December 2000: Backstreet Boys, Black & Blue, 1,591,000
January, 2001: Beatles, 1, 1,259,000
August, 2001: *NSYNC, Celebrity, 1,880,000
June, 2002: Eminem, The Eminem Show, 1,322,000
February 2004: Norah Jones, Feels Like Home, 1,022,000
April 2004: Usher, Confessions, 1,096,000
March, 2005: 50 Cent, The Massacre, 1,141,00
June 2008: Lil Wayne, Tha Carter III, 1,006,000,
November, 2010: Taylor Swift, Speak Now, 1,047,000
May, 2011: Lady Gaga, Born This Way, 1,108,000
So what do you think about all of this? Chime in with comments!