Malcom blog

Katy Perry's chart-topper sparks new sales worries

NEW YORK (Billboard) – By most measures, Katy Perry's new album, "Teenage Dream," has been a resounding success.

The Capitol release bowed at No. 1 on the Billboard 200, thanks to first-week sales of 192,000 units in the United States, the ninth-best debut week so far this year, according to Nielsen SoundScan.

The album's first single, "California Gurls" (featuring Snoop Dogg), has scanned 3.6 million downloads, while all individual digital tracks from the album have sold a combined 5 million units, according to SoundScan. Put another way, sales of albums and track-equivalent albums (where 10 digital tracks equal an album) for "Teenage Dream" totaled 689,000, according to SoundScan.

"It's a thrilling accomplishment from our perspective," says EMI Music Services executive vice president Dominic Pandiscia, who oversees the company's North American sales operations. "The magnitude of the marketing plan is about driving overall revenue around the project, including track downloads, ringtones and video sales. Album scans is one component of it."

Yet "Teenage Dreams" fell short in one key area: It didn't meet first-week sales projections by industry insiders. And that, in turn, has sparked worries that the album's performance may affect retail orders for other superstar releases due later this year.

'WAKE-UP CALL'

Executives at other major labels say they expected Perry's sophomore album to debut with sales of anywhere from 300,000 to 700,000 units, with most figuring the album would scan about 400,000.

"I'd like to meet one industry executive last week who thought her album would do under 200,000 units, because I don't think that person exists," a senior executive at a rival major says.

"It was a wake-up call for some folks," the head of sales at another competing major says. "Some think the sky is falling. Others said, 'Wait a minute, she's a singles artist.' And still others said EMI should have put out the album six weeks ago and it would have sold more."

According to sources, EMI shipped 1 million units of the album before its U.S. release date of August 24, which indicates that big-box retail chains like Walmart, Target and Best Buy were expecting the album to post robust first-week sales, as was Starbucks, which featured the title in its stores.

It would also be roughly in line with the typical industry practice of shipping about twice as much product as anticipated first-week sales for a major album release. But prerelease shipments of "Teenage Dream" turned out to be about seven times debut-week sales.

Competing major-label executives say it wasn't EMI's fault that the album didn't meet sales expectations. "EMI did a tremendous job in setting up that record," one executive says.

Perry shot to pop stardom with her 2008 debut album, "One of the Boys" (Capitol), and a penchant for provocative lyrics and music videos.

IN THE LONG TERM

Carl Mello, head of purchasing for retail chain Newbury Comics, says he expects that "Teenage Dream" will sell well through the end of the year and be one of the holiday season's top titles. But he notes that the album's first-week sales "aren't as big as you would think for somebody who has become so omnipresent."

While anticipation for Taylor Swift's forthcoming album, "Speak Now" (Big Machine), had sparked debate over whether superstar artists will ever be capable of generating debut-week sales of 1 million units, "Teenage Dream" has shifted the conversation to whether labels should even consider shippi 1 million units before street date.

"I don't know how you ship a million units now," a major-label head of sales says. "Even if I was asked to ship a million units, you just can't do it anymore."

Some label executives say expectations were too high, noting that most female pop artists commonly sell a lot of track downloads but don't enjoy big debut-week album sales. "When I saw how Perry was doing, I was shocked," a senior sales executive at a competing major distribution company says. "But then I remembered that Fergie's 'The Dutchess' only did about 160,000 units in her first week in September (2006) and it took until December until the fans started buying her like an album artist."

EMI's marketing push for "Teenage Dream" and Perry's appealing stage persona will no doubt score high-profile TV appearances for her this fall, which should help boost sales of the album. "Mark my words: I will bet you 'Teenage Dream' will sell more than ("One of the Boys")," another senior label sales executive says. "'Teenage Dream' will be one of those 'at the end of the day' records."

(Editing by Sheri Linden at Reuters)