Thursday November 27, 2014
Gut reaction and an unswerving conviction that you are right may be an admirable trait in an A&R man, but it fails to cut the mustard in the more pragmatic commercial business of music retailing.
That's the key to ERA's objections to the major record company-sponsored plan to enforce a worldwide Friday release date from next Summer.
Our view is that the numbers simply don't add up.
When news first leaked of the plan to adopt a Global Release Day a couple of months ago, retailers and digital services were intrigued.
With national release days currently spread through the week, it is certainly the case that this encourages short-term piracy. Pirate networks on theworldwideweb are by definition global so standardising on a single day seemed like a smart opportunistic move which could potentially help sales.
Full marks, major record companies.
But our enthusiasm soon waned when we heard that the chosen day was Friday. The objections focused on the impact on sales and the impact on costs.
On sales, the UK's current release day, Monday, provides a real boost at an otherwise quiet time of the week. In fact Monday is currently second only to Saturday for sales. Inevitably it generates not just sales of new releases, but impulse buys too. Moving to Friday would not only kill this Monday sales boost, it would likely lose those add-on sales, raising questions over whether many stores would bother opening on Mondays at all.
On costs, the picture was even bleaker. An early week release date gives time for restocking ahead of the weekend rush. Move to a Friday and retailers could be faced with an unappealing choice between being out of stock or paying expensive surcharges for weekend delivery.
On the basis that we anticipated that retailers arguing for the status quo would simply be dismissed as traditionalists, we decided to commission research to determine precisely what the costs - and any potential sales uplift - resulting from a switch to Friday might be. We polled our members both physical and digital. We modelled sales effects over every retailer type. We even commissioned consumer research to check the preference of music fans and of those who expressed a preference, most opted for Monday. (To be fair, a BPI survey showed music fans backing Friday, but in both cases the vast majority of consumers had no preference at all)
On costs, our research was clear: taking additional staff and delivery costs into account, a switch to Friday would need to generate a minimum of £8m in additional retail sales a year just for retailers to break even ie in a market which is clearly falling we would need an increase of £8m just to stand still (and that's without the additional costs to the record companies themselves which would inevitably be passed on to retail).
On sales the evidence is inevitably more speculative. IFPI commissioned research suggested a move to Friday would result in an overall increase in UK recorded music sales of around 4%. Sounds good, but that is equivalent to week one sales of every new release over the course of the year increasing by a third. It would be lovely if it were true, but it does not seem likely.
Intriguingly the IFPI numbers suggested that 95% of the benefit of switching to a Global Release Day would still be achieved on a Monday compared with a Friday.
For us it's a no brainer: if we can capture 95% of the benefit with none of the costs, why would anyone even consider a Friday? Adding risk and cost for a minimal benefit just doesn't make sense.
And that's why we have taken the position we have. It's not based on "gut feel" or "conviction" - just plain hard fact.
If there is to be a Global Release Day, an early week release really does make more sense. The fact that US retailers are prepared to abandon their time-honored Tuesday release date for Monday only serves to reinforce the point.
Retailers have no problem conceding that on matters creative, on matters A&R, record companies are far more qualified to make the call. But when it comes to what's best for retail, what's best for the consumer and what's best ultimately for sales, we really do know our stuff.