Jack Johnson Surfs To Digital Album Sales Mark

When Jack Johnson reached the top of The Billboard 200 last issue, his path to No. 1 marked a first for digital music sales.

More than one-quarter of the 163,000 copies of "Sing-a-Longs and Lullabies for the Film Curious George" (Brushfire) sold in the United States the week ending Feb. 12 were purchased digitally, primarily through Apple Computer's iTunes Music Store.

Johnson sold 42,000 album units as downloads, which represented 26% of total sales, according to Nielsen SoundScan. Prior to that, digital album sales had never represented even 10% of a No. 1 selling album's total business.

Hopes are high in music industry circles that big digital sales of "Curious George" are an indicator that consumers are turning to the likes of iTunes for more than just à la carte tracks.

Johnson's success comes as labels increasingly look to de-emphasize individual song sales in favor of bundled digital products, which include liner notes, videos, digital booklets, such promotions as preferred concert ticket offers—and a higher profit margin.

"We're very keen on bundling with everything we do online," says David Ellner, senior VP of operations for Universal Motown Records Group, the label that distributes Johnson's Brushfire Records imprint.

For "Curious George," the label included digital liner notes and a downloadable coloring book. It also worked with iTunes on a monthlong, pre-order promotion that Ellner says generated 12,000 orders. As an incentive for buying the album in advance, consumers received an alternate version of the track "Upside Down" ahead of the release date. Universal Motown did not offer any tracks for à la carte purchase ahead of the album's release.

Warner Music Group is also among the companies stressing bundled product sales. It reports that its album bundles are often priced 20%-30% above the average $9.99 rate for albums on digital services.

WMG reveals its focus on digital albums has been working with acts like Madonna, James Blunt and Depeche Mode. The company reports that 75% of its Madonna sales via iTunes for her album "Confessions on a Dance Floor" came from album bundle purchases.

"Consumers are showing significant demand for new creative bundles of digital album products," WMG chairman/CEO Edgar Bronfman Jr. said in a Feb. 2 conference call with analysts.

In Japan, WMG is also experimenting with bundled product sales for mobile phones—a collection that includes a track, ringtone, text message and wallpaper.

But just how quickly consumers embrace bundled offers remains to be seen.

Universal Motown executives say Johnson's download success is as much about the common demographics of his fans and iTunes users as it is an indicator about the state of the digital album business.

Other digital albums have sold more on a unit basis. Coldplay holds the mark for the largest number of digital album purchases in a single week. "X&Y" (Capitol) sold 62,000 copies the week of June 25, 2005, representing only 8.4% of the 737,000 units the album sold that week.

But as of early 2006, digital album sales continue to grow at a faster pace than digital track sales. Album downloads are selling at double the volume they did a year ago. And year-to-date digital album sales are up 150% to 3.98 million, according to Nielsen SoundScan.

In 2005, consumers purchased more than 352 million digital tracks, compared with 16.2 million digital album bundles. ••••