Pop Articles - Coldplay
Coldplay album's success proves a
point and iPod's dominance
Los Angeles Business Journal, July 4, 2005 by Hilary
Potkewitz
When British alternative rock band Coldplay released the
album "X&Y" exclusively on iTunes, with
two extra songs not available anywhere else, the great
clatter heard around the world was the sound of records
being broken.
The first single, "Speed of Sound," is the best-selling
song on Apple Computer Inc.'s iTunes Music Store--not
a surprise, given that digital downloading has been all
about singles, which make up more than 98 percent of all
digital sales.
What was surprising, even stunning, was the album sales.
In the first week of its June release, "X&Y"
sold 64,000 albums through iTunes, eclipsing the 37,000
sales during the first week of U2's heavily promoted "How
to Dismantle an Atomic Bomb."
"When we launched U2, you knew that was a big number.
Now you see bands like Coldplay come in and double that,"
said Steve Berman, head of marketing and sales for Interscope,
U2's record label.
With "X&Y" iTunes proved that the digital
medium can sell albums, not just singles--a watershed
for the still-fledgling online music model. For artists
and record labels that have been trying to figure out
how to continue selling albums in the digital age, Coldplay
showed that it could be done.
At least it could be done on iTunes. The Coldplay success
provides more evidence of Apple's dominance over online
competitors like Los Angeles-based Napster Inc., Yahoo
Inc. or RealNetworks Inc. "ITunes has done a tremendous
job," said Berman, who also heads up sales and marketing
for the Geffen and A&M labels, all part of Universal
Music Group. "I'm sure these other partners we have
in digital music will continue to grow and figure out
their business."
Marketing strategy
Coldplay's strategy is a case study on how online marketing
has advanced in just a matter of months. Where the U2
release late last year relied on iTunes exclusivity and
a televised iPod commercial featuring the band, Coldplay's
label, EMI Music, made sure to assault consumers from
all fronts--using a wider set of marketing partners than
just Apple.
A deal with Cingular Wireless LLC had a song clip from
"Speed of Sound" available as a ring tone a
week before it was heard on radio. Two weeks before the
album's June 7 release, the band appeared on "Saturday
Night Live," and Apple ran an iTunes commercial featuring
the band's new video and offering the album for pre-order
on iTunes.
Yahoo Music posted an online version of the video on its
Web site that week, but could not sell the album. MTV
Networks' Web site, MTV.com, streamed the album exclusively
for the week prior to its release, but it was not downloadable.
The day of the release, AOL Music had an exclusive stream
of a Coldplay concert, again available for listening,
not purchase.
But when it came time to purchase the album, all roads
led to iTunes, though EMI is careful not to play favorites
in talking about the campaign. "We had lots of different
initiatives with Coldplay and lots of our digital partners,"
said Jeanne Meyer, senior vice president with EMI Music,
a unit of EMI Group Pie. "To suggest there was just
one is a misnomer."
Apple's Web site is still the only place to download the
album with the two bonus tracks, although the regular
album became available through all services after its
release date.
"I don't think top acts are going to go with smaller
companies on an exclusive," said Frederick Moran,
media analyst with the Stanford Group. "Players with
clout like Apple iTunes can attempt to corner proprietary
content."
But why would AOL Music want to be part of a marketing
effort that ultimately sends customers somewhere else?
Because it got a live concert, which was viewed more than
700,000 times the first week, according to EMI. As for
Yahoo, Coldplay was the number one rock video title during
its debut week.
Napster has done some exclusive releases. Last year the
Dave Matthews Band made Napster the only digital music
service to sell its catalog, snubbing iTunes. But the
music was also available for download from the band's
own Web site. Tom Petty also signed an exclusive deal
to sell some albums digitally, although he did not launch
any new records with Napster.
"The one thing that works against Napster is that
they're losing money, and there will be less availability,
less desire to do that exclusivity unless it's another
huge marketing campaign," Moran said.
Napster spokeswoman Dana Harris declined to discuss plans
for competing for artists' releases. She said the company
has focused instead on providing extras like interviews
with artists and live performances for "true fans
of the band."
Yahoo Music executives also declined comment.
The music industry, however, can hear the silence--and
perhaps the frustration. Cameron Strang, chief executive
of Indie record label New West Records, admits that New
West provides iTunes with the most exclusive opportunities
because it's the biggest retailer. "It's just the
size," he said. "Apple's made a huge investment
and they've done a good job."
While Strang said "the competition is getting stronger
every day," he conceded that L.A.-based New West's
next two exclusive releases--heavy metal icon Alice Cooper
and Memphis funk artist Delbert McClinton--will be on
iTunes.
For Moran, Coldplay's "X&Y" success did
not necessarily prove that albums will live on. He sees
iTunes' two-week head start as nothing more than an advanced-sales
tactic used regularly in the traditional retail world.
"In order to get people to download the entire album,
you have to offer them big incentives," he said,
like the bonus tracks.
Yet while digital downloads only account for 8 percent
of the Coldplay album's first week of sales, some music
executives see it as leap in digital music's evolution.
Universal's Berman described how the promotional machine
used to work: "Put out a hit record, get it up on
the radio, on video, get the band on tour, and sprinkle
a little magic along the way." That model has been
turned around, and it has music executives looking at
their computers first.
"Eighteen million people are hitting (social Web
site) MySpace. Thirty million are living on (Yahoo's)
Launch.com. AOL Music is getting millions of people in
front of music, and iTunes is selling millions of downloads
per week" he said. "We have to retrain ourselves
completely."
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