Singing Praises of That 1%

Due to blockbuster sales by such diverse artists as Alanis Morissette and the late Tupac Shakur, the record industry in 1996 avoided what many had been predicting would be its first downturn year in more than a decade.

But the growth--less than 1%--wasn’t enough to keep quiet the debate about the industry’s economic vitality.

Thanks to brisk Christmas week business, album sales for the year totaled 616.6 million copies--up a minuscule 300,000 from 1995, according to SoundScan, which monitors U.S. record sales.

Even though the album figures--the best single barometer of health in the industry--were flat for the second year in a row, executives were heartened that there hadn’t been a decrease in units sold in an industry that had seen album sales grow from 548 million units in 1992 to 615 million in 1994.

“I certainly would have preferred to have seen significant growth,” said Roy Lott, executive vice president and general manager of Arista Records, “but a flatness certainly doesn’t indicate and doesn’t support the [perception] of the industry being in a big slump.”

While other industry leaders echoed Lott’s remarks, an entertainment analyst for Paul Kagan Associates said that record companies have reason to be concerned.

“It’s definitely not a growth industry,” said Mike Yocco of the Carmel-based company. “There aren’t any new genres that are breaking through to drive big growth.

“It’s encouraging that sales are up slightly, but this is still a relatively mature industry and until there’s a new musical style or new hardware that can spark sales, I don’t see that figure growing much in the future.”

Executives at MTV, the influential cable channel, are among the industry figures who are concerned about pop’s state of affairs.

The channel sent shock waves through the industry recently when, believing that its listeners were tiring of alternative rock and rap, it broadened its playlist to include more mainstream pop and techno-dance music.

Despite this growing concern, SoundScan CEO Mike Shalett took a more optimistic view, saying the industry should be encouraged that album sales kept pace with last year’s totals despite increased competition from such areas as the Internet, video games and cable TV.

“With all the other things that are out there, I’d say this is pretty good,” he said. “You can say that sales are flat, or you can say they’ve maintained the same record-breaking level. Half full or half empty?”

Charles Koppelman, CEO of EMI Records Group North America, also took a bullish view.

“Everybody was predicting gloom and doom,” he said. “It might be a little gloomy, but there are still plenty of people who want to buy music.”

Nobody knows that better than Morissette, the 22-year-old Canadian rocker whose Grammy-winning “Jagged Little Pill” album sold 7.4 million copies in 1996, the highest one-year total since SoundScan started monitoring U.S. record sales in 1991. This brought total sales of the album, which was released in 1995, to 11.6 million.

Another Canadian, pop singer Celine Dion, had the year’s No. 2 album, “Falling Into You,” which sold 6.1 million copies to make it the top-selling 1996 release.

Rounding out the Top 10 album sellers: The Fugees’ “The Score,” 4.5 million; No Doubt’s late-charging “Tragic Kingdom,” 4.4 million, including 1.9 million in the last six weeks of the year; Mariah Carey’s “Daydream,” 3.1 million; Shakur’s two-disc “All Eyez on Me,” more than 3 million; Metallica’s “Load,” nearly 3 million; Toni Braxton’s “Secrets,” 2.9 million; Shania Twain’s “Woman in Me,” 2.8 million; and Oasis’ “(What’s the Story) Morning Glory?,” 2.6 million.

It’s not encouraging, however, that many of the acts counted on by the industry to lead the way commercially in 1996 fell far below expectations. Among these: Pearl Jam’s “No Code,” 1.1 million; R.E.M.’s “New Adventures in Hi-Fi,” 821,000; Sheryl Crow’s “Sheryl Crow,” 835,000; Sting’s “Mercury Falling,” 833,000; George Michael’s “Older,” 707,000; and John Mellencamp’s “Mr. Happy Go Lucky,” 467,000.

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The year’s top-selling single was Los Del Rio’s “Macarena,” which sold 3.7 million copies to easily outpace Bone Thugs-N-Harmony’s “Tha Crossroads,” which sold 2.1 million.

Overall, sales of singles were up about 20% from 1995, but Shalett and others discount singles as a factor in measuring the industry’s financial condition.

“They’re apples and oranges,” Shalett said. “Singles are a promotional item, not a profit center. Singles are supposed to help promote the development of artists and the sale of albums.”

The industry will get another index of 1996 performance in February when the Recording Industry Assn. of America issues its annual year-end appraisal, but those figures are based on units shipped and not over-the-counter sales.

“You look at the retail side and it’s easy to say the business is in trouble,” RIAA President Hillary Rosen said Friday. “Major retailers are considering or have already declared bankruptcy. It’s scary. Nonetheless, enough have managed to restructure and reorganize to hold their own.

“Obviously we want 1997 to be better, but we’re not panicked the way some have said. There’s always lots of potential when you have so much new music coming out every year.”