Translation: cable television spurs a record-industry rebound
Stray Cats, Men at Work, and Adam Ant are hardly familiar names to most people over 30. Yet they are among the leaders in the revival of pop music. After a four-year slump, sales of records and tapes have begun heading up again. Says David Geffen, head of Geffen Records, one of the most successful firms: "This is going to be a good season. Things are finally starting to turn around."
The industry built on hits currently has two monster successes: Thriller by Michael Jackson, the No. 1 album for 13 weeks with more than 5 million copies sold, and Flashdance, the sound track from the hit movie, which sold 1.5 million copies in its first month in the racks. The industry has high hopes for two new sound-track albums: the Star Wars sequel Return of the Jedi, scheduled to be released this week, and Staying Alive, the Bee Gees' follow-up to Saturday Night Fever, due out in June. Record executives are also excited about a new form of danceable electronic rock known as New Music. Latest hit: She Blinded Me with Science by Thomas Dolby.
The record industry has gone from boom to blah. In 1978, estimated retail sales reached $4.13 billion with hit albums like Grease leading the way. Then the tune changed. Rising prices, fewer hits, disco, limited radio-station play, home taping, competition from video games—all were blamed for driving down music sales. Last year, sales totaled $3.59 billion, a four-year decline of 13%.
The recording industry, which had previously spent lavishly on high living and frills, has been drastically cutting back. The chairman of Warner Communications' Elektra/Asylum label was moved aside in January, and the subsidiary's headquarters was transferred from Los Angeles to New York City to cut expenses. The CBS/Records Group, which together with Warner commands 45% of the market, closed down a record-and tape-manufacturing plant in Terre Haute, Ind., and has laid off some 1,500 employees. Says Group President Walter Yetnikoff: "It used to be that if any artist said, 'I want a billboard on Sunset Strip,' we'd say, Fine.' But not any more.
While it is too early to label the recovery a sure thing, a number of trends are running in the industry's favor. With the recession winding down, consumer spending is picking up. Records now come in more economical sizes. Twelve-inch "dance singles" that feature extended versions of hit songs sell for as little as $3.49, and mini-albums that carry half as many songs as regular albums sell for about $4.49, instead of $6.29 to $7.99. At the same time, the appeal of coin-operated video games seems to be wearing off. Arcades that compete with the record industry for the spending money of 13-to 19-year-olds saw revenues fall 10% last year, and game business is expected to be off an additional 20% this year.
The most important new source of support for records is unexpectedly coming from television. MTV (Music Television), a cable channel owned by Warner Communications and American Express, has become one of the biggest hits on cable television, beaming out rock music 24 hours a day, seven days a week. MTV, which was being boomed into 9 million cable-equipped homes last December, should reach 13 million households by the end of May.