Beyonce and Target's '4' Plan: Exec Explains Strategy, Store Shortage (Exclusive)

beyonce with john butcher - target release 2011
Parkwood Pictures/Target Corporation

Target's vice president of entertainment John Butcher talks about the retailer's commitment to music, its partnership with the pop superstar and why some stores can't keep her album on the shelves.

Beyonce is the latest music superstar to team up with Target for an exclusive deluxe edition of her new album. 4, which was released on June 28 and comes with six extra tracks (three new songs and three remixes), 17 minutes of club remixes of the record’s first single “(Girls) Run The World” and bonus video content, including a director’s cut of the “Girls” video, follows similar promotions for artists like Ricky Martin, Allison Krauss and America’s Got Talent winner Jackie Evancho. The retailer’s partnership with Taylor Swift helped the country singer lock in a first week sale of over 1 million units of her 2010 album Speak Now

With Beyonce, Target projects another quantifiable out-the-gate success (total first week sales of 4 are expected to come in around 300,000). Partly as a result of that consumer demand, the retailer is having a hard time keeping its shelves stocked with ample copies of 4, and those that did make it to Target guests’ hands (as the company refers to their customers) came with another hiccup: the exclusive video was not quite ready for primetime. Fans were instead greeted with a message stating that the video was still being “finalized” and that they should try to access it again on Friday, according to the Los Angeles Times.

THR spoke to Target’s vice president of entertainment John Butcher about partnering with Beyonce, who appeared at the retailer's Harlem store on Thursday to celebrate its one-year-anniversary. The executive, whose iPod runs the gamut from Paul Simon and James Taylor to AC/DC and Alice Cooper, also explained why, in a shrinking market, music remains a priority for the 1,755-store chain.

The Hollywood Reporter: What is Target’s philosophy on music?

John Butcher: Music has been a part of Target's DNA for as long as we've been a brand. It’s a core piece of who we are and our commitment to music has not waned at all over the last few years. If you look at the total retail landscape, there's probably no one supporting the music industry more that Target and I'm proud to be a part of it. 

THR: So far, 2011 has seen a slight uptick in music sales, but that follows years of double digit declines. Why still put so much effort into a business that seems to be shrinking?

Butcher: Because our guests really care about it and that's at the heart of everything that Target does. For us, a lot of people out there still want to buy physical CDs. They want to own [the music], they care a lot about ownership of their favorite artists and they expect us to be relevant in this industry. If you look at our TV campaigns and how our image has been built over the last 20 years, music has been a big piece of it.

THR: When did talks begin in earnest with Beyonce’s camp about partnering for the release of 4?

Butcher: A few months ago. In some cases, talks begin years in advance, but this one came together relatively quickly comparatively… It's all a matter of when the key aspects of the album start to come into play -- is there going to be additional content, and how is the content? Is the music good? Once we have a full line of sight to all the assets on the table, it's easier for everybody -- the artist, manager, distributor, label and retailer -- to get together and talk about what that partnership looks like. 

THR: So in a way, Target has an A&R role in deciding whether these extra tracks are good enough for an exclusive?

Butcher: With someone like Beyonce, it's kind of a no-brainer. We know she makes great music and that if she has extra content, we want it. When we heard Beyoncé say that she saved some of her favorite tracks for the deluxe album, we knew there was something special there… Plus, her message of empowerment is something that really resonates with our guests.

THR: There have been reports of a shortage of discs in certain stores. What’s the story?

Butcher: Honestly, day one sales were fantastic for us, especially on the deluxe edition. Beyoncé fans came out in droves on Tuesday and sales have been very strong so we're reacting. Sony has been a great partner with us and they're getting us more product as fast as they possibly can.

THR: What does that tell you about potential first week sales?

Butcher: Her deluxe to national album percentage was higher than expected and higher than it has been in the past, so people are coming out to buy the deluxe which has been wonderful to see… We'll release sales data at the end of the week, but so far, the week has shaken out to be good. Our day 1 market share is in line with where we were hoping it would be and sales are off to a great start. We'll be meeting or exceeding our forecast for Beyoncé and she's doing better than she's done with her other albums for us. With the way it’s tracking, we couldn’t be happier.

THR: How about the bonus video content which wasn’t ready by release date. Any idea when customers will be able to successfully access it?

Butcher: Beyonce’s team is still finalizing aspects of the content, and they just didn't want to be released until it was perfect. It’s on its way and coming soon… We could have forced something through that wasn't right -- it was our prerogative to do so -- but we didn't want to do it. We certainly don't want to disappoint our guests, we believe they'd rather have the right content and wait a couple days than get something that wasn't going to be very special. We're confident that everybody will be happy in the end.

THR: This brings up a dilemma that’s unique to physical product -- what if a label wanted to push back its release date to give itself more time to finetune content or even work another single. Do you have flexibility in terms of an on sale date?

Butcher: The short answer is yes, we usually do, it just depends on when we find out. We like to think of ourselves as a big retailer that acts small so we make sure that we have that personal contact with the team and with the artist that's the only way we can really guarantee that we're going to be able to deliver the artist's objectives. As long as that notice happens within a sufficient amount of time, at least five to six weeks in advance, then we can probably react. 

THR: And if the music itself isn’t reacting or a single isn’t an instant smash, what is your commitment to that record?

Butcher: We'll go to the ends of the earth for an artist that partners with us. If it's not hot out of the gate, we'll find ways to help drive the sales, whether that means that we need to support it via additional circular advertising and our Sunday ad, then we'll do that. If it means that we have to help with their marketing [efforts], we can do that, too. I think that's a reason why these partnerships are so attractive for artists.

THR: There was a slight rise in music retail sales since January, to what do you attribute the bump?

Butcher: I think it all comes back to content in one way or another. If you look at some of the surprises of the year, like how strong Adele’s album has been, people want to own it. It's been very difficult -- all entertainment content is down and it's hard to know where the bottom is going to be. I get asked all the time, "What will happen ten years from now? Are we still going to have a CD section?” Because obviously as a mass retailer, we have to plan years in advance how our space is going to look. We're one of the only retailers that's not planning any significant space reduction in our entertainment world in the near future, [or] at least the next couple of years, and I think the reason that I feel so comfortable not reducing space right now is that there are so many unknowns and there are so many great artists still releasing great music that our guests want to buy on CD. 

THR: What did the Taylor Swift experience teach you?

Butcher: A lot. Taylor was huge. First of all, it was on the heels of five straight years of double-digit decline in CD sales. And when that album launched with exclusive deluxe content only available at [our stores], it ended up being the No. 1 CD in Target history for launch week. We knew it was going to be big, but it shocked us that it broke a years-old record. That’s what it did for us, and what it did for Taylor was helped push it to a million units on week one and she also performed very well nationally and at iTunes. So we didn't steal share or hurt her in any way. We think that when you partner with someone like Target on a release like that, all boats rise. That's really what that taught us -- it reinforces our belief in the concept of investing in music and these artists.

THR: What does the picture look like for DVDs?

Butcher: DVDs are actually holding their own right now. Blu-Ray continues to be the growth format and pick up steam, which is great. DVD sales certainly have been soft the first half of this year, not just at Target but also in the industry. There's been a dearth of new releases relative to last year and we're comping big titles like Avatar, which broke all-time box office records. We're in a bit of a unique time for movies right now, which we expect to reverse the back half of the year because there are some great movies coming out. From a Target standpoint, later this year, you’ll see us reset our floor plan and actually devote additional space to our DVD and kids offerings.

THR: As a music fan who’s seen all sorts of formats and innovations come and go, do you feel like the music business has taken consumers for a ride?

Butcher: No. I bought music in record stores in Indianapolis when it was all cassettes and I remember when the compact disc came out and having to go out and re-buy my collection because it sounded so much better on CD. Personally speaking, I just felt like technology continued to improve and music sounded better with each advancement. Even today, music sounds best on a CD, but with digital, I now have thousands of CDs that can fit in my pocket. We're all in it to consume music and I'm sure there will be more changes in the future that will impact the way we listen again. That's advancement at work.