HMV in holding pattern for U.S., lays off 7; Retailers weigh in on Nicks, Wings campaigns

Section: Merchants & Marketing

Retail Track

WHICH WAY: HMV continues to downsize its presence in the U.S. Two weeks ago, HMV North America announced that it was letting go seven people and moving its U.S. headquarters to its 86th Street store. Recently, the company announced that it is closing another store, its Herald Square outlet in Manhattan, leaving the chain with 12 U.S. stores.

Andrew Pollock, VP at HMV in Canada, says the store was closed because the landlord, which wants to redevelop the property, made a good enough offer that HMV agreed to close before its lease was up. But when asked about whether HMV will remain committed to the U.S. market, he referred that question to chain president Peter Luckhurst, who was unavailable for comment. In the past, however, HMV executives have privately said that they were in a holding pattern in the U.S., waiting for the environment to become friendlier to music merchants.

IN THE WIND: Retail Track hears that Sony Music is about to devalue much of its classical front line, moving about 600 titles to midline and leaving about 100 titles in the front line. The move reflects the weakening sales base of classical music.

ITALIAN ALLIES: Medalist Entertainment, a joint venture of Alliance Entertainment and CAK Entertainment, continues to mine the mainstream, issuing Italian American Classics to record stores May 8. The album has been available exclusively through a direct-response TV campaign since October.

WHICH BRINGS ME to an old issue: A few retailers have called me recently to complain about the direct-marketing campaigns that were launched for the Stevie Nicks Trouble in Shangri-La album and the Paul McCartney & Wings Wingspan collection. Both were available by calling 800 numbers or ordering online before the titles hit stores. While this got the dander up of a few retailers, more merchants were annoyed by the value-adds that both direct-marketing efforts received.

In Nicks’ case, the album could be bought exclusively through MTV.com before it came out in stores, and consumers who ordered the album got to listen to it immediately, via streaming from the site. In fact, the site advertised its promotion as a new way to hear music first. In the case of the McCartney album, the TV advertisement told consumers they could order it direct and have the album delivered to their homes on street date, but when customers called up, they were given the option of getting a rush release and paying $3 more. Again, the direct-marketing channel got a premium, this time in the form of a Wings pin.

While two different chains complained about the availability before street date, most other merchants agreed with Kevin Milligan, VP of music at Wherehouse Entertainment, who said that merchants have learned that they generally are the main beneficiary of direct-marketing campaigns, regardless of the advantages given to the direct channel. In Nicks’ case, Milligan says, in effect, hats off to Reprise if they can get that kind of push from VH1, which named Nicks artist of the month. Shangri-La debuted at No. 5 on The Billboard 200 on the strength of the VH1 boost. The 109,000 units she moved gave Nicks her biggest SoundScan week ever (Between the Bullets, Billboard, May 19).

Wingspan just came in at No. 2, moving 220,000 units, and you can turn to page 76 to see Between the Bullets’ analysis of that performance. Gene Rumsey, executive VP at EMI Music Distribution (EMD), has his own take on that performance, noting that the TV campaign built up demand. Wingspan’s first-week sales total, he says, “speaks to the coordinated marketing of EMD with its customers, [TV marketing company] Castelian, label setup, and, of course, an incredible artist.”

While most merchants have learned to live with direct-sales campaigns, they were pretty unanimous in their feelings that direct-marketing vehicles already have the advantage of selling the album before street date, so why do they need exclusive value-adds to boot?

THE ENVELOPE PLEASE: Rachelle Friedman, the R in J&R Music and Computer World, will be honored by the Women in Music Foundation for her contributions to the music industry at its annual Touchstone Awards luncheon, which will be held May 21 at the Marriott Marquis hotel in New York. Friedman, who is president/co-chief executive at J&R, will be honored along with Ronnie Spector, Jean Riggins (executive VP/GM at Universal Records), and Helen Hobbs Jordan (music coach to the stars).

MAKING TRACKS: Gary Noftz, formerly a sales representative with BMG Distribution, is seeking sales or marketing opportunities in the Midwest/mid-Atlantic region. He can be reached at 412-682-2429 or fr*******@*ol.com. On the opposite coast, Richard Plummer-Raphael, who formerly was in sales at Internet start-up OneChannel.net and before that was in sales at Valley Media, is seeking opportunities. He can be reached at 916-987-6841 or al*****@**.net.

Ed Christman / Billboard (Vol. 113 Issue 21, p54. 1/2p.) / May 26, 2001