Shopping channel QVC sees music opportunities

By Ed Christman

NEW YORK (Billboard) - As CD sales shrink due to the ascension of digital, store closures and music space reductions, cable shopping channel QVC sees an opportunity and is stepping up its offering.

"We see a void in the selling of physical product," QVC director of merchandising Rich Yoegel says. "We acknowledge that the industry is not selling as much CDs as it did in years prior, but it is still selling a lot."

QVC, a subsidiary of Liberty Media, generated $7.4 billion in overall sales in 2007, with $1 billion of that coming from its Web store. The channel features select merchandise like jewelry, household appliances and other items that it can either build shows around or incorporate into its programming, which reaches 166 million households worldwide.

QVC has sold music almost since the channel's inception in 1986 and even launched a short-lived record label in the late '90s that released albums by Kenny Rogers, among others.

Although QVC has continued to sell music in recent years, "we weren't going after it," Yoegel says. But in 2007, the channel began picking up the pace, promoting seven albums with a show dedicated to each release. The shows feature artist performances and interviews broadcast live from either QVC's studios or off-site venues. Albums receiving this treatment last year included Alabama's "Songs of Inspiration," "Tony Bennett Sings the Ultimate Songbook, Vol. 1," Goo Goo Dolls' "Let Love In" and Barry Manilow's "The Greatest Songs of the Seventies."

Yoegel estimates that in the last 24 months, the company has sold 250,000 units, with QVC's online store accounting for about 20%. QVC generally likes to get bonus discs with extra songs or live video performances to justify higher pricing, with CD albums averaging between $16 and $20, plus a $3.97 shipping and handling charge.

"Our business is measured on a dollars-per-minute basis," Yoegel says. "We are looking in a prime-time show to do upwards of $10,000 a minute, about $600,000 for an hour."

Manilow's "Greatest Songs of the Sixties" and "Greatest Songs of the Seventies" albums have been QVC's biggest recent sellers, having sold 43,000 and 40,000 units, respectively, QVC says. The best sales performance overall on QVC by a recording act was that of Italian pop artist Giovanni, who sold more than 100,000 albums during a two-hour show in January 1998.

In addition to sales, other factors are considered to measure success, including whether an item creates a buzz for QVC or brings new customers aboard, which is what happened with the Goo Goo Dolls release, Yoegel says.

So far this year, QVC has broadcast only two music shows -- for Clay Aiken's "On My Way Here" and Randy Travis' "Around the Bend" -- with a third one planned for September 12 on James Taylor's "Covers."

A QVC spokeswoman says the channel strives to feature one artist per month, although "depending on artists' schedules, release dates and our own programming schedules, things often change." She adds that QVC is "working on several new deals for the fall of 2008."

Aiken's QVC appearance seems to have inspired 25,000 scans through the nontraditional nonstore Internet/mail-order/venue category, which accounted for 27% of his album's first-week sales of 94,000 units in the week ended May 11, according to Nielsen SoundScan. Year to date, it has sold 150,000 units. Meanwhile, Travis' album sold 14,000 units through the Internet/mail-order/venue category, which was 45% of the total during the debut week ended July 20 of 31,000 scans.

QVC also offers the "stop by" approach where an artist may appear on a regular show without performing, as "Dancing With the Stars" winner Julianne Hough did in April to promote her self-titled debut solo album on Mercury Nashville.

On many levels, Hough "was almost acting as a co-host, and she got to talk to fans who phoned in," with her songs played during intervals, Mercury Nashville executive VP of sales, marketing and new media Ben Kline says. "They did a nice job of promoting the album," which he says had a halo effect at brick-and-mortar. "In addition to pre-orders, it was a great way to build awareness because many people didn't know she sang." The album sold nearly 3,000 units in the nontraditional category in its debut week ending May 25 when total scans reached 67,000 units.

Some label executives say they are impressed with the QVC production. "When a show is on, you can see the sales as it's happening," through a room where calls are monitored, says one label sales executive who isn't allowed to talk publicly for his company. "You can see calls spike when they are selling diamonds and the camera zooms in. Also, if a host says something and it generates a phone sales response, the QVC merchandising staff talks to the host and cameramen through earphones instructing them to repeat that dialogue or camera angle. It is remarkably sophisticated."

Reuters/Billboard