FILE-SHARING SUCKS, BUT WHERE ARE THE HITS?

While fingers continue to point to 9/11 and its aftermath as contributing to the slump, most see it as exacerbating an already problematic situation. After all, other forms of home entertainment, including video games and DVD movies, are having banner years and have even seen business pick up post-9/11. There’s no doubt that the terrorist attacks have affected everyone profoundly, but when it comes to the record business, there’s a handful of pre-existing conditions, including peer-to-peer downloading, commercial piracy and consumer CD burning, that many execs are diagnosing as disease processes at work on an already-unhealthy business.

At almost two years’ distance from the ’99 dot-com gold rush, for example, observers are grumbling that, far from the digital-distribution windfall everybody expected, the damage wrought on the biz by the online music "revolution" far outweighs any benefits Internet marketing and research have provided thus far. With millions in time and resources sunk into developing a workable digital music plan and nothing to show for it but declining sales, the uphill battle to combat the sharing phenomenon unleashed by Napster looks more uphill every day.

Another major challenge facing the business is the shortage of real hits to drive sales. While having hits on albums is the biggest problem, the equation is complicated by radio and promotion departments’ frequent path-of-least-resistance approach when it comes to identifying and playing records that will impact sales.

Observers note that while Britney Spears’ Britney debuted at #1 on sales of 760k, it fell short of her last album’s debut by over 500k, at least in part because it lacks a smash. The same goes for Garth Brooks, whose Scarecrow comes in at #1 this week on 472k, over 600k light of ‘97’s Double Live—again, no smash...not yet, anyway.

On the other side of this coin are albums with hits that are beating expectations—think Enrique ("Hero"), Shakira ("Whenever, Wherever"), Enya, ("Only Time"), Nickelback ("How You Remind Me") and Usher ("U Got It Bad"). And pundits are punditing that Creed, who are currently tearing up radio with "My Sacrifice," are set to have an enormous debut week (hitsdailydouble.com, 11/21).

Everything else may be changing, but the hits still sell albums.