THE LEFSETZ LETTER: Christina Aguilera

I'd like to tell you that Christina Aguilera's "Back To Basics"
heralds a turnaround in the recorded music sphere, but I'd be lying.

What we've got here, with the sale of 341,988 CDs in its debut week,
is an incredible job of SET-UP! Executed flawlessly, Irving and RCA
deserve a pat on the back. For getting the word out, creating the
buzz, and selling through this number of discs. But this is a
positively old wave story. How do I know? By looking at the digital
statistics.

You'd think, with that many albums sold in the physical sphere, "Back
To Basics" would be burning up the online chart. But you would be
wrong. Christina Aguilera sold a grand total of 18,169 online
albums. Egads! What happened here?


Bob Lefsetz, Santa Monica-based industry legend, is the author of the e-mail newsletter, "The Lefsetz Letter". Famous for being beholden to no one, and speaking the truth, Lefsetz addresses the issues that are at the core of the music business: downloading, copy protection, pricing and the music itself.

His intense brilliance captivates readers from Steven Tyler to Rick Nielsen to Bryan Adams to Quincy Jones to music business honchos like Michael Rapino, Randy Phillips, Don Ienner, Cliff Burnstein, Irving Azoff and Tom Freston.

Never boring, always entertaining, Mr. Lefsetz's insights are fueled by his stint as an entertainment business attorney, majordomo of Sanctuary Music's American division and consultancies to major labels.

Bob has been a weekly contributor to CelebrityAccess and Encore since 2001, and we plan many more years of partnership with him. While we here at CelebrityAccess and Encore do not necessarily agree with all of Bob's opinions, we are proud to help share them with you.

It's about the price. A double album, "Back To Basics" was sold at
$11.88 at Wal-Mart. And also under twelve bucks at Best Buy. And
even under TEN DOLLARS in some locations. In other words, there was
a nexus between hype, availability and VALUE (i.e. two discs for the
price of one)! Yes, "Back To Basics" was an impulse item. No
different from the tabloids and candy adjacent to the grocery store
checkout stand.

How did it come to this? How did music go from being a religious
experience, acquired at the temple, the standalone store with
EVERYTHING, to becoming an afterthought, something you could just as
easily live without.

Somehow, via the endless hyping and whoring, mainstream music has
become devalued. It's not seen as a Mercedes-Benz, but more akin to
a Hyundai. It'll get you there, but it's not meant to last.

Why weren't sales commensurate online?

Well, maybe because the album cost four dollars more. Why buy the
files?

I wouldn't blame Irving here. He's not the record company, he just
represents the act. He wants to maximize revenue today. But what
makes the label think that when discs are dead, everybody will go pay
MORE online? God, shouldn't there be incentives placed in online
stores, to get people used to buying there? Shouldn't customers be
made to think they're savvy and forward-thinking, doing the right
thing? Instead of literally paying more for less?

If the online version of "Back To Basics" had been $6.99, how many
copies do you think would have been sold? In other words, if it was
SIGNIFICANTLY cheaper to buy the album online, would sales have
BALLOONED? On one hand I think yes, on another… You just don't
have the same buying impulse as you do in physical retail.

But it's not like all the rest of the new product is flying out of
physical retail… The highly hyped Trace Adkins disc? 114,706 over
the counter. These are not superstar numbers. Seems that in
contradistinction to the long tail Internet world, in brick and
mortar, it's only about the hits. Everyone's fighting for shelf
space, a deal with the big boxes, to get their discounted product in
the face of enough people to sell…oftentimes, not enough.

Wow, this train is driving so fast for the cliff it's staggering.

Indie retail will survive. That's where the hard core musos go to
buy physical discs. There's a market for vinyl, there will be
customers for these stores. But the mainstream??

With the death of Tower, and you know it's gonna close down, there's
no real way to make it work, the idea of a standalone record chain
with deep catalog will die. It will leave the public CONSCIOUSNESS!
Furthermore, it's an axiom of business that the fewer places there
are to buy your product, the less you will sell. Oh, it would be one
thing if the Tower experience was replicated in the big box, but
ain't that a laugh, with so few titles available there.

As for the big boxes themselves? They care about as much about music
as you do about your landline long distance plan. They're ITCHING to
see them go. There's no loyalty at all. Hell, just ask Verizon,
whose landline business has dropped dramatically. Sprint saw the
death of the long distance business and went wireless. MCI? Merged
with WorldCom and tanked.

We're approaching a wrenching transition. One within which physical
sales plummet and digital sales don't make up the difference. And no
one is planning for this inevitability. They're just trying to milk
the last dollars and cents from the old world.

Music is going to have to drop in price dramatically online. So
there's no incentive to steal. Or else people will continue to do
so, and the majors will become licensing houses and the new music
landscape will be invaded by indies, fighting turf wars, to build
their touring acts.

I'd say change is coming, but it's HERE!