Tech, Autos, & Gear in Layman's Terms Since 2006

November 1, 2012 • Music Diary, News

One of Five Albums (yep, 20%) Sold Last Week Was Taylor Swift’s ‘Red’

Last year I was very vocal about calling shenanigans over the way Lady Gaga used a $0.99 ‘giveaway’ on to basically game her way to ‘selling’ over 1 million albums. It has been documented ad nauseam that the ‘record industry of old’ is dead, but that execs at the three remaining majors try to continue pushing their hand-crafted ‘stars’ and product … to ever shrinking annual sales.

This week we get the exception that proves the rule – Taylor Swift’s ‘Red’ sold ~1.21 million copies, the most in a single week since Eminem in 2002. First some background.

Every now and then there is a huge success, which makes sense. We can get a true ‘organic’ pop success such as Adele, whose sales actually ROSE as more people heard her stuff. That is because her success was built on the songs rather than the usual hype machine. Earlier this year Mumford & Sons had a 600,000 copy launch that brought in Spotify and others and was viewed as a sign that ‘windowing’ – the practice of shutting out streaming services until an album has sold most of the first-run full price copies – was dead.

But this past week we got a totally different sign – one that says that the old record industry model can still work when applied with someone the public is predisposed to like. Taylor Swift was originally a pop-country singer, someone with marketable good looks, the ability to pluck out tunes reasonable enough that the corporate songwriters to wrangle them into marketable hits, and a distinct enough (compared to the Disney songstress factory) voice that was … um, marketable.

She has sold millions of records over the past several years, and her super-model looks and constant tabloid presence (and oh-so-coincidental dating habits and subsequent ultra-tame break-up songs) have ensured that she is constantly on the minds of teens. Recently the lead single for her new album ‘Red’ was released, and ‘We Are Never Ever Getting Back Together’ was a catchy pop song – any former ties to country music have long since been set aside for the wider pop audience.

So here we are in 2012 with Taylor Swift as a well established pop star, with a new single that in spite of being incredibly simplistic and basically the same as all of her other songs, is selling loads of copies.

So Swift’s management and record company make a gamble with product positioning:
– Focus on full-priced sales through Apple’s iTunes and Target. Target stores had Taylor Swift ‘mini stores’ with loads of merchandise.
– Walgreens has full-priced albums in ‘mini stores’ with other merchandise.
– Papa John’s also sold the CD for $13 and as part of large one-topping pizza combo for $22
– There was a marketing and promotion campaign which cost more than $15 million.
– No Spotify, no Amazon MP3, no Pandora, and avoid other discounters.
– Media blitz with the inability to watch TV or listen to the radio or go to a shopping mall without being inundated by ‘Red’.

The results are clear – the album sold an amazing amount of copies. iTunes notched a record 464,000 sales, and Target similarly had record sales of 396,000.

So … marketing works, as does branding in terms of the amazing PR job that has seen Swift jumping from guy to guy, including some famed womanizers more than a decade her senior while still maintaining a squeaky-clean image that makes her popular amongst multiple demographics. And that is not to take away from Swift, who has remained

If you look back at my Lady Gaga report, you will see that the overall distribution of sales looks similar to my graph at top: one dominant player, a couple of solid sellers and then everyone else with <50,000 in sales. So the ‘huge seller’ is the anomaly, driven by numerous intangibles in addition to things we do know.

At HypeBot there is a simple question posed: “if she can sell 1 million copies in 1 week, why can’t more artists sell 100,000 or even 10,000 in a year?”

And that is the sad thing that I have talked about in the past: this sort of blockbuster event makes money for a few people, makes some splashy news, but hides the reality that 2% of music releases account for 90% of sales. Given that annual sales are shrinking, it can also be seen this way: for every Red album sold, someone is NOT buying one of the other excellent recent releases.

Another thing to think about … the marketing campaign ALONE cost $15 million so far. And since the pricing ranged from $10-$15 across different retailers, that means that at 1.21 million in sales they haven’t even covered the marketing campaign yet! Assuming that the songwriting teams cost as much as reported elsewhere, studio time and so on added up to another million, and that the net income from an album is ~$7 after packaging and shipping and iTunes overhead … and they would need to sell more than 2.5 million just to break even! And that doesn’t even count the cut going to Taylor Swift and others.

So while I congratulate Taylor Swift on her enormous success and hope that everyone who bought the record is enjoying it … I cannot help but wonder what the end game is for this sort of ‘scorched earth’ campaign …

Leave a Reply