Creative marketing aids troubled soundtrack market

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In a year that had theatergoers tapping their toes to such music-filled movies as New Line's "Hairspray," Fox Searchlight's "Once," Picturehouse's "La Vie en Rose," the Weinstein Co.'s "I'm Not There," DreamWorks/Paramount's "Sweeney Todd," Sony's "Walk Hard: The Dewey Cox Story" and others, few patrons used their feet to run to their favorite brick-and-mortar or digital retailer to purchase the accompanying soundtracks.

For the first time since 2004, no theatrical soundtrack surpassed the million milestone in sales. "Hairspray" was the top seller at 803,000, according to Nielsen SoundScan.

The exception, of course, remains releases from Disney's wildly successful "High School Musical" and "Hannah Montana" television franchises. Just as "High School Musical" topped sales of all soundtrack albums released in 2006, "High School Musical 2" landed at No. 1 for 2007, with sales surpassing 2 million copies. However, it's worth noting that that figure is a million less than the first "High School Musical" sold in its debut year.

It's easy to see why Fox Music president Robert Kraft declares "soundtracks are now simply about tie-ins to primarily tween and kids' movies."

Despite the slide in sales (and continuing drop in overall CD sales), studio executives remain committed to releasing most scores and soundtracks and are encouraged by new ways to reach fans through creative packaging, digital-only releases and smart dealmaking.

"Everyone is experimenting with every possible option," says Kraft.

"The soundtrack business is such a weird story because you can't put it in the same box that it used to be in, and people are trying to do that," adds Lia Vollack, president of worldwide music for Sony and Columbia. "I'm not pessimistic about putting out records. They just can't cost very much. Good music in films is more important than ever, and labels are more excited than ever about getting their music used in films as a way for exposure."

Movie soundtracks remain caught in the crosshairs of a precipitously declining record business. "The soundtrack sales are dependent upon how the music industry solves their problems," says Randy Spendlove, Paramount's president of music. "But more and more people are going to movies, and kids love film and love music and even love film music."

And when a movie connects with the masses, a soundtrack can still sell. "Hairspray," which has grossed around $120 million domestically, is nearing the platinum mark for its soundtrack, and for a studio that runs its own record division -- as New Line does -- the sales can add up in a meaningful way. "Relative to what we can make in films, it can look like a drop in the bucket, but in terms of being in the record business, if you spend your money wisely, soundtracks can absolutely be a revenue source," says Paul Broucek, New Line's president of music.

Despite grossing less than $25 million so far domestically, the soundtrack for Sony's "Across the Universe" has sold more than 300,000 units in two different releases.

The key remains music that is both integral to the project and appeals to a passionate audience. "Do people want to relive the emotional beat of the movie?" asks Spendlove. Even if they do, the movie still has to register a big enough boxoffice to lead to significant soundtrack sales. For example, the soundtrack to critically lauded "Once" has sold only 192,000 copies.

Marry a musical with market saturation and the results are still invigorating. Mitchell Leib, president of music and soundtracks for Walt Disney Studios, cites stats that 80% of 8- to 14-year-olds saw "HSM2." And, he adds, despite all the digital excitement, 85% of the soundtracks sold for "HSM2" were CDs, not digital downloads.

Leib believes theatrical soundtrack sales will rise again as purchasing releases becomes easier. With traditional retailers falling by the wayside, and big-box outlets devoting little shelf space to soundtracks (and music in general), he feels that technology will bring about a resurgence. "The day is not far off where the theaters are hot spots. Can you imagine how many units of "Hairspray" would have sold if your Bluetooth cell phone or BlackBerry could have been prompted to purchase the soundtrack?" he asks. "When that spontaneity of point-of-purchase can occur in the soundtrack business, you'll see the next big boom."

In the meantime, commonly used technology is leading the charge. Studios are flirting more and more with digital-only releases. Disney has jumped into the fray wholeheartedly, releasing a number of online-only scores. The low cost, compared with pressing a physical CD, allowed Disney to keep the rights instead of farming out the project to an outside label. For example, "With Miramax -- some of those are very prestigious projects -- we didn't want to give those rights away. Doing something digitally gave us a chance," Leib says. "We also have the opportunity to go from digital to physical." However, he adds, no digital-only title has sold enough to warrant a physical release.

Paramount released Michael Brook's score for "Into the Wild" digitally, reserving the physical release for Eddie Vedder's soundtrack (which is also available digitally). "We're finding a lot of score junkies that know it's almost easier for them to go download a score than try to find it in a store," Spendlove says.

One switch that helped save scores from possible release extinction was the American Federation of Musicians' flexibility on reuse fees for orchestras. For example, before the recent change, it could cost as much as $100,000 in payments to union members to put out a score that featured a domestic 100-piece orchestra. But the AFM's reuse requirements now allow sales of up to 10,000 digital copies and 15,000 physical copies before the reuse fees kick in.

Not all studios are abandoning physical releases. Vollack is loath to give up the physical CD, especially when it comes to scores. "I don't think scores should only be downloadable. The collectors who go buy every single score: they're audiophiles. They like the quality of a physical CD."

But digital technology is improving. New Line plans to introduce a high-end line of scores in the first quarter of 2008. Through newlinerecords.com, it will offer its high-end scores as AIF files, a much higher-quality digital format than the current MP3 standard. At $1.99, the price will be higher than the usual 99 cents per track.

"The first release will probably be 'The Golden Compass,'" says New Line executive vp music Jason Linn. "Eventually we'll put all our stuff on there. We've had some great scores come out, but we've never had an effective way of putting them out on the high end digitally." He adds this will not take the place of standard digital or physical releases.

Even though they remain bullish on soundtracks, few studio execs believe they will ever see the return of the days of multiplatinum sales. This is in part because major labels, who were the traditional partner with the studios for soundtracks (if not scores), are concentrating on breaking artists signed to their rosters, so they are no longer focused on soundtracks in any meaningful way unless the label has a direct tie to the studio.

"No longer do you have the infrastructure at a record company that is doing things to promote the sale of a soundtrack album," says Kathy Nelson, Universal's president of film music. "The only way it sells is if the movie is successful. It's not (like) a band that goes on the road."

Warner Music Group's first-look deal with New Line, a holdover from the days when the companies were corporate cousins, is at its tail end and seldom enforced. All but two of New Line's soundtracks/scores in 2007 came out on its own New Line Records label, none through WMG.

Vollack stresses that Sony/Columbia's relationship with Sony BMG's Sony Music labels remains tremendously strong, citing how the two companies have worked hand in hand on the Columbia soundtrack for "Walk Hard," as they will for 2008's "21." "We are really working well with Sony Music. They've been great partners for us," she says, even though the studio and record company do not have a formalized first-look deal.

Universal Music Group still has a first pass on soundtracks/scores for Universal's films and does release a number of them, such as "American Gangster," but Nelson says she's turning more to newer indie labels dedicated to film music, like Lakeshore and Treadstone, as well as the old standbys Milan and Varese Sarabande. "I'm not asking for advances; gone are the days of thinking you're going to get any money," she says. "I'm just asking someone to put it out."

While Disney releases most of its soundtracks through its own labels, when appropriate, it does partner with an outside record company. As it did with Jive for "Step Up" in 2006, it will pair with Atlantic for Touchstone's urban-oriented "Step Up 2 the Streets" next year. The movie and soundtrack will feature tracks from such current Atlantic hitmakers as Flo Rida and T-Pain. "I'm paying 100% of the music video costs," Leib says, adding that the label did not provide Touchstone with an advance; instead, the studio gets a higher-than-usual royalty rate. "I'm looking for the label to rent me their marketing and promotion staff during this window."

Releasing a compilation soundtrack, such as the one for "Step Up 2," is becoming rarer in this world of increasing digital downloads of individual songs. Fox's Kraft has officially declared RIP to compilations, whereas other studio executives still have limited faith in them.

"I'm working on a film that could potentially have Prince, Michael Jackson, Aretha Franklin -- tremendous artists -- throughout the film. Some of it is new and some of it is licensed," says Kraft. "There will be no soundtrack. A decade ago, there would have been three labels lined up to put out cool music, now we don't even ask."

If the complete soundtrack is not commercially released, studios try to find a home for some of the music. For example, Fox did not release a soundtrack for "Waitress," but did release "The Pie Song" on iTunes. Similarly, Sony released Pearl Jam's cover of the Who's "Love, Reign O'er Me" through iTunes instead of releasing a full soundtrack for "Reign Over Me."

"One thing I'm happy about is the era of just throwing a bunch of songs in a movie or a soundtrack is over," says Nelson "That stopped happening because music is expensive and our budgets are being challenged, and you have to be more resourceful. When a Van Halen asks for a million dollars for a song in the movie, you move on."

For music executives at studios, the bottom line isn't measured in dollars and cents. Besides, compared to what a blockbuster makes for a studio, money from soundtracks has always been small change, even when they were selling through the roof. "I would prefer to measure: Is music getting better in movies? Are the soundtracks good, whether they sell or not?" Nelson says. But, she adds, "I will never think soundtracks are going away, I just think they'll find another way to present themselves to the public."
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