Kid's Stuff

Suddenly-and without warning-the music business is experiencing a baby boom.

Children's music dominates The Billboard 200 this week, with kids-oriented albums-the "High School Musical" soundtrack, "Kidz Bop 9" and "Sing-a-Longs & Lullabies for the Film Curious George"-grabbing the chart's top three slots.

But this is not a one-week phenomenon.

Children's music sales are up 58% year-to-date compared with 2005, according to Nielsen SoundScan data. That vastly outpaces the overall album market, which is down 2.1% this year.

Consumers have already purchased more than 1.9 million children's albums this year versus 1.2 million at this point in 2005. And the 2006 figure does not include the "Curious George" title, which counts as a soundtrack and is not in the Top Kid Audio numbers.

The boom appears to be driven by several factors, starting with a number of compelling releases for the underserved elementary-school and tween markets.

But the kids' market is also enjoying a windfall of post-holiday digital business, with downloads accounting for substantial sales on the biggest hits. Kids' titles are also benefiting from strong media tie-ins and creative retail alliances.

"There is a big audience of kids that are too old for Baby Einstein, but their parents aren't comfortable with them listening to 50 Cent," says Cliff Chenfeld, co-owner of Razor & Tie, home of the successful "Kidz Bop" franchise. "There hasn't been a lot of effort to create and market things for that gap between the toddler and adolescent. We continue to see that the market is interested and needs products."

The biggest hit filling the gap is the TV movie title "High School Musical" (Walt Disney), which has scanned 404,000 units since its Jan. 10 debut. It jumps six places this week on The Billboard 200 to a new peak at No. 1.

The album features songs performed by the movie's actors-including leads Zac Efron and Vanessa Anne Hudgens-and helps retell the story of two teens who meet at a karaoke contest. "High School Musical" originally aired Jan. 20 on the Disney Channel and has had multiple re-airings.

Also strong is Jack Johnson's "Curious George" project from Brushfire/UMRG. The album debuted at No. 1 on The Billboard 200 in the Feb. 25 issue and has sold 369,000 units. In addition to attracting Johnson's audience, the album appeals to a post-toddler crowd and fans of the Universal Pictures film, which opened Feb. 10.

Razor & Tie is well-represented in the kids' market with its "Kidz Bop" series-geared toward children ages 5-12-and strong-selling releases by the popular Laurie Berkner Band, whose new CD/DVD is being marketed in conjunction with Starbucks.

"Kidz Bop 9," released Feb. 21, sold a franchise record 98,000 units in its first week; it debuts at No. 2 on The Billboard 200 this issue-also a new high for the series. Each "Kidz Bop" CD features well-known pop hits performed by children and adults in a singalong style. The full franchise, which includes 12 separate albums, has sold close to 5.8 million units since its introduction in 2001.

Digital downloading has been especially important for "Curious George" and "High School Musical." Album downloads account for 20% of sales for "George" and 15% for "Musical." Disney has been particularly aggressive, building its advance campaign for the soundtrack around online elements.

"Prior to the holidays, we didn't try to drive the digital business much at all. But we knew going into the holidays last year that the paradigm would shift with millions of people buying iPods and the cost of the players going down," says Damon Whiteside, VP of marketing for Walt Disney Records. "Digital downloading has now revolutionized the kids business. It's the start of a whole new world."

Whiteside says that before the airing of "High School Musical," a promotion that ran in tween magazines including Teen People gave consumers a code to download the soundtrack's "Breaking Free" for free on the Disney Channel's Web site.

After the movie aired, demand for a commercial version of the song boomed, and it jumped from No. 86 to No. 4 on The Billboard Hot 100 due to digital downloads. It was the biggest one-week jump on the chart. The track was also No. 1 on iTunes for three weeks.

The full album dominated iTunes the week after the film first aired, becoming the No. 1 most-downloaded album and accounting for six of the site's top 10 most-downloaded tracks.

"Clearly kids have iPods and MP3 players, and they obviously know how to download," Whiteside says. "We've become obsessed with digital now."

Digital elements are playing an increasing role in all of Disney's upcoming children's projects.

Prior to the March 24 premiere of Disney's new TV series "Hannah Montana," for example, a music video featuring the main character will be available exclusively on iTunes. The label will launch a major digital initiative surrounding the series' soundtrack debut this summer.

Digital downloads accounted for 26% of first-week sales for the "Curious George" project. It had the second-best opening sales week in iTunes' history, behind only Coldplay's "X&Y" (Billboard, March 4).

Digital album sales had never reached 10% of a No. 1-selling album's total business prior to the "Curious George" release.

"We're not entirely sure who is buying online, though it's probably a combination of parents and kids," says Monte Lipman, president of Universal Republic. "We anticipated that this would do well digitally because the music comes from an organic place. Jack says that this was a gift to his son. But this wasn't about attracting the 8-year-old; it was about focusing on parents who want to turn their kids on to good music and about fans of Jack's other studio projects."

While digital sales are encouraging, children's music still makes a strong case for the CD.

"Though the music business is having a hard time on the physical side, there's an audience of consumers that like to buy finished products for their children," Chenfeld says. "They are looking for the whole album experience and don't just want to buy a single."

Increasingly, nontraditional outlets such as coffee, grocery and lifestyle chains are garnering significant portions of overall kid sales.

The "Curious George" project is stocked in grocery chain Whole Foods Markets as part of its "Feed Your Soul" music campaign and has become a top seller for the chain, according to Universal.

"Whole Foods is a perfect account for Jack," says Kim Garner, Universal senior VP of marketing and artist development. "It's mostly known for organic and healthy foods, and Jack fans are part of that whole culture. It's a way to get appropriate music to places where people are doing things in their everyday lives."

The chain's Doug Wallace describes the project as "a very successful and powerful extension of our brand."

Meanwhile, Starbucks is having its own success with the Laurie Berkner CD/DVD, "We Are . . . The Laurie Berkner Band" (Razor & Tie/Two Tomatoes Records/Starbucks Hear Music). The title debuted at No. 1 on Billboard's Top Music Videos chart largely due to its availability at the coffee chain, which was responsible for more than 80% of first-week sales.

"This was a very compelling opportunity because Laurie Berkner delights children and parents alike," Starbucks Entertainment president Ken Lombard says. "This is not a specific move on our part to market to children. We spend a tremendous amount of time trying to locate just the right music and entertainment options that will interest our customers."

Berkner-a singer/songwriter who has built a loyal following among kids and parents-was attracted to working with Starbucks because she "assumed the album will seem much more available when it's in every Starbucks versus having to make the trip to a more traditional brick-and-mortar store to pick it up. A lot of people are going to Starbucks anyway, and it's a destination for many parents to go with their kids."

Such special promotions aside, mass merchants are still the primary places where kids' audio gets purchased, accounting for 74% of sales year-to-date.

"That's where children's music gets the best positioning," says Emily Wittman, VP of Nick Records. "Nontraditional chains like groceries and pharmacies and downloading make impacts overall, but the products with strong branding do great at the Wal-Marts and Kmarts."

That is because labels take advantage of cross-marketing opportunities at every level they can.

For example, Nickelodeon's Nick Records, which has a distribution agreement with Sony BMG, can cross-promote its music projects using its TV networks, Web site and print publication. According to the company, Nick sells an average of 12,000 CDs per week, and total album sales in the last 18 months exceeded 1.2 million units.

Its biggest sellers of late include "Dora the Explorer: Dance Fiesta!," which features Nick Jr. cartoon character Dora singing Latin favorites with such acts as Santana and Los Lonely Boys. The title, which was promoted across all Nick properties, has sold 108,000 copies since its October release, according to Nielsen SoundScan.

Similarly, "High School Musical" was promoted throughout Disney's media outlets.

Universal attributes much of the "Curious George" soundtrack's success to its sister studio's film marketing campaign. The project has done especially well at Wal-Mart, where it had a larger percentage of sales than previous Jack Johnson releases.

According to Garner, Universal will continue its campaign for the soundtrack this summer, in conjunction with the children's music tour Jamarama Live!, and into the fall, when the "Curious George" DVD will be released. (The Laurie Berkner Band is another Jamarama performer.)

Without its own media outlets, Razor & Tie leans heavily on direct response prior to a CD's release as a key element of its marketing strategy for the genre.

"Kids are responding just as much or better than before to these ads," Chenfeld says. "The ads help build the brand and build demand before a product is even available at retail."