TREND WATCHING:
THE iTUNES BOYCOTT

Have iTunes holdouts benefited from boycotting the #1 music retailer, and is the idea of not making potential hit singles available at iTunes becoming a trend? These are some of the questions asked—and answered—by the Wall Street Journal’s Ethan Smith and Nick Wingfield in an analysis published this morning and headlined “More Artists Steer Clear of iTunes.”

While the iTunes Store has sold north of 5 billion song downloads since it started five years ago, a growing number of labels say selling singles on iTunes in some cases is crimping overall music sales, Smith and Wingfield point out. The evidence for this hypothesis is persuasive.

Kid Rock's Rock 'n Roll Jesus, which was kept off iTunes' virtual shelves, has sold 1.7 million copies in the U.S. since its release last year, with sales increases in 19 of the past 22 weeks. That data inspired Atlantic Records to pull Estelle’s album from the store, four months after it went on sale there, just as one of the tracks entered the iTunes Top 10.

Certain label execs, managers and artists have long complained about Steve Jobs’ policy prevents them from selling an album only, on both fiscal and aesthetic grounds.

"In so many ways it's turned our business back into a singles business," Vector’s Ken Levitan, who manages Kid Rock, told the WSJ, calling iTunes "part of the death knell of the music business."

Levitan argued that if the album had been sold according to iTunes policy, many of its sales to date would instead have shown up as 99-cent downloads of the single "All Summer Long."

More supportive examples supplied in the piece: Katy Perry has sold 2.2 million downloads of "I Kissed a Girl" in the U.S., nearly 10 times the 282k units he album has sold. M.I.A. has sold 888k downloads of her surprise hit "Paper Planes," compared with 272k on the album Kala.

"Check some of these artists that have hit singles, versus their album sales," Levitan added. "Then compare it to what Kid Rock is doing."

Mega-manager Irving Azoff told the reporters that a few years ago he presented the Eagles with a financial analysis showing that their royalties to date from iTunes sales were far lower than anyone expected. Glenn Frey did some back-of-the-envelope math of his own. "His comment was that it amounted to 39 minutes onstage in Kansas City," Azoff joked.

Though he didn't disclose the royalty figure, Azoff’s implication was that the band had received less than $500k from its iTunes sales at that point. While band's iTunes income has increased since then, Azoff said, "I'm underwhelmed by the number of sales I see on iTunes for the classic bands."

AC/DC, one of the biggest-name holdouts, sold an estimated 2.7 million CDs world-wide last year, up from 2.55 million in 2003. The band has consistently sold more than 1 million CDs annually in the U.S. alone. Since the beginning of 2006, only fellow holdouts The Beatles have sold more catalog albums in the U.S. Among the six best-selling catalog artists during that period, the act that sold the most individual songs digitally—the Rolling Stones—sold the fewest albums, digital or physical.

Former Yahoo Music exec David Goldberg opined that a widespread shunning of iTunes is unlikely unless a number of acts on the level of Coldplay and U2 were to join the boycott. Even then, Goldberg believes many artists would be hurt by such a move.

"On certain albums, you can justify it, but you're also going to push people to the illegal stuff," he said.