Frukt Report
By: Eamonn Forde

PHYSICAL SALES ARE STILL STUMBLING AND CREATIVE PACKAGING IS BEING USED TO STEM THE DECLINE. CAN INNOVATION AND THE CHART RULES EVER BE COMPATIBLE BEDFELLOWS?

At the start of October, the Official Charts Company (OCC) in the UK declared that Beck’s latest album (The Information) would not be chart eligible. As part of the packaging, the CD came with a set of stickers that allowed fans to customise the sleeve; the stickers were seen as a gift and, therefore, made the release chart-ineligible. Billboard quickly jumped on the announcement and declared the album package was chart-eligible in the US, thereby exposing a lack of consensus between the different chart regulators around the world.

“The labels and retailers, in conjunction with us, set the parameters on what can be included in any packaging,” explains Omar Maskatiya, charts director of the OCC. “For singles and albums, the most you can put in – in terms of bits of paper – are four postcards or a poster. The issue of stickers, patches and badges always comes up when the chart rules are reviewed. So this ‘no stickers’ rule isn’t new; it’s been around for years.”

Do chart rules restrict innovation at a time when digital album bundles (only making up 3% of total albums sales in the UK) aren’t making up for the shortfall in physical sales? Besides, how important is packaging really? While albums are released with lots of extra content (DVDs, access to locked content online etc), is it this, or the sleeves they come wrapped in, that are the real attraction for consumers? “Research suggests it’s the additional content that really appeals to the fans,” says Terry Felgate, MD of EMI. “There are certain artists that are known for their packaging and Sigur Rós are a perfect example. Across all their albums, packaging has been integral. While research suggests that it’s the content, but there are some acts that step outside of that and their packaging is key to what they are about.”

“I don’t believe that the rules stump creativity,” suggests Maskatiya. “The last thing that we want to do is prevent sales from happening. We take our lead from the labels and retailers in regards to what they want to do. If they want to move into more innovative packaging, that could quite easily become part of the chart rules moving forward.” In many cases, it is the artists themselves that are driving the packaging creative. As Felgate notes: “Even though artists are aware of the importance of digital, many of them really care about how their physical releases are presented. You need to find something that is in keeping with the artist and that particular album. The starting point is not, ‘Let’s make something that’s never been done before’ or, ‘Let’s make something for the sake of it’. There needs to be a reason; and that reason needs to be tied into the artist and the music.”

While up to 20% of shipped physical albums will come in ornate limited-edition packaging (such as the Badly Drawn Boy ‘passport’ cover for Born In The UK), there is still some concern about how sales of digital album bundles can be pushed. In the US, digital bundles make up around 7% of total album sales and Maskatiya is confident the UK will follow suit and hit a double-figure share by the end of next year. He adds that the OCC needs to be able to respond to market changes to make this possible. “The chart rules need to keep in step with innovations in the digital market. As labels step up their offerings in terms of bundles to make them more attractive and increase sales, we just need to ensure that the chart rules move in tandem with those developments.”

Digital sales are growing at a staggering rate but it’s still not enough to compensate for physical’s shortfall. The oft-termed ‘digital revolution’ might be pushing more discovery of new music, but it’s on a track-by-track basis which undermines the albums-based contracts that tie artists to labels. Let’s not forget, it’s on albums where artists and labels make their money and pay off the staggering marketing costs (video, promotion, manufacturing, distribution) that singles (with a minimal – or even a minus – margin) drink up. Albums have a considerably longer shelf life than singles and the use of innovative packaging can help propel sales in the first few weeks (appealing simultaneously to dedicated fans and ‘floating voters’). The ‘Long Tail effect’, however, is in its natural environment in digital; the tricks of the physical world to push sales need, however, to be translated across to downloads to ensure that album bundles are bought rather than a slim handful of individual tracks. Getting the artwork along with all the tracks just doesn’t cut it any more. Offering exclusives (extra tracks, videos, price incentives, priority booking for gig tickets etc) that are only part of digital bundles is one way to go. Now is the time to address this or face diminishing returns as cherry-picking cuts through digital album sales like a plague of locusts.

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