Michael Jackson sales surge expected to last months

By Ed Christman and Antony Bruno

NEW YORK/DENVER (Billboard) - In the days following Michael Jackson's June 25 death, fans flocked to record stores and digital music outlets to purchase one last memory. And merchants say they expect the Jackson sales surge to last for weeks -- maybe even months.

"With the around-the-clock coverage and questions about his death, this story will keep going, with every development giving it a new bit of life," says Kerry Fly, vice president of purchasing and marketing at wholesaler Eurpac.

Jackson's solo album sales in the United States skyrocketed from 10,000 copies in the week before his death to 422,000 in the week ended June 28, according to Nielsen SoundScan.

During the same period, U.S. track downloads surged from about 48,000 copies to 2.6 million. The week of his death, the best-selling track was "Thriller" at 167,000 copies, and the top-selling album was "Number Ones" at 108,000.

In the United Kingdom, Jackson held 11 of the top 200 album positions and 43 of the top 200 singles based on sales monitored by the Official Charts Co. for the week ended June 27. Despite the inclusion of only two full days of sales after Jackson's death, "Number Ones" topped the OCC album chart after selling 46,400 physical copies and 10,000 downloads. "Thriller" also reached the top 10 for album at No. 7, with combined physical and digital sales of 14,900.

Among Jackson's best-selling albums in the United States during the week ended June 28, the split was sharp between physical and digital retailers, which appeared to relate to the availability of titles at physical retailers. Anticipation of a Sony price cut on catalog titles appeared to prompt U.S. retailers to stock popular greatest-hits collections like "Number Ones" instead of studio albums like "Thriller" or less popular compilations like "The Essential Michael Jackson."

From the day of Jackson's death until the following Tuesday (June 30), U.S. retailers of physical CDs had ordered about 3 million of his Sony Music Entertainment albums, while international orders hovered around 5 million copies, sources say. Although Sony had to scramble to meet demand, it got high marks for getting Jackson product to stores June 29, after most retailers had sold out of the artist's inventory during the weekend.

Universal Music Group, which owns the Motown label, caught a break when it experienced a smaller run on the Jackson 5 catalog: It had already shipped plenty of product as part of its Motown 50th-anniversary promotions.

"By dumb luck, we weren't completely caught off guard," says Universal Music Group Distribution president/CEO Jim Urie. He notes that the company also shipped the rest of its Jackson 5 inventory and had U.S. orders for 300,000 album copies as of June 30, which will be back-ordered until July 6.

ALLOCATING LIMITED SUPPLIES

Sony wasn't as lucky. The supply of solo Jackson CDs in the U.S. market was relatively low at the time of his death because 13 of his albums were part of the major's previously announced move to reduce prices on 8,000 catalog titles. The price cuts, which kicked in June 29, lowered the wholesale cost of the standard version of "Thriller" and "Off the Wall" from $9 and $7.81, respectively, to $6.40 and $5.40.

With the price change imminent, retailers had been waiting to reorder product at the new price. But when Jackson died, those pricing considerations went out the window.

"On Friday morning, I got out of bed and went straight to my computer to order Jackson product," says Dedry Jones, owner of indie retailer the Music Experience in Chicago. "I didn't care about old price/new price. People aren't asking price on Jackson. They are just buying it."

Faced with massive demand, Sony decided to ration product rather than try to fulfill entire orders, according to retail sources. So the entire account base received enough product to get through June 29, with new shipments arriving the next day.

"Sony is rationing Jackson product, but they did right by us," says Carl Mello, head of purchasing for New England-based retailer Newbury Comics. "Of course, they didn't ship us what we ordered, but they got us in more than I expected. The rest of our order will come in during the week."