Why so many boxed sets? -- The success of expensive music collections have produced a quick profit for the record companies

Star Time

It’s unlikely that many in the record industry will look back on 1991 fondly: Between the cautious spending of recession-battered consumers and the reluctance of radio to take a chance on new artists, labels haven’t had much to celebrate this year; indeed, Atlantic and Mercury have greeted the Christmas season with layoffs. But one of the few bright spots has been the surprising success of lavish — and expensive — boxed sets. Many of them come in fancy packages and carry fancy prices ($50 or $60 or $70), but that hasn’t prevented boxes from Eric Clapton, Led Zeppelin, and bluesman Robert Johnson from becoming best-sellers. What makes the situation doubly nice for the record companies is that the high-ticket collections are usually cheaper to put together than albums of new material by up-and-coming artists and often produce an unusually quick profit.

Executives at EMI Records U.S.A., for example, say that an album by a current artist would have to go platinum — would have to sell a million copies, in other words — before they’d see the same profit that only 100,000 sales of their new four-CD Fats Domino set can provide. ”With a boxed set you don’t have a lot of the costs associated with a new release,” says Jim Cawley, who supervised the Domino compilation for EMI Records. ”You don’t have to pay for studio costs, a video, or tour support.”

Instead, a large chunk of the budget is spent on cleaning up the original recordings for CD release and on packaging items like artwork and liner notes. Still, producer Harry Weinger, who worked on PolyGram’s four-CD James Brown Star Time set, says that the cost for boxed sets is often so low that a record company has to sell only 10,000 to 15,000 copies to break even. By contrast, a heavily promoted mid-level pop record would have to sell something like 150,000. He estimates that Star Time has already sold more than 70,000 copies.

Indeed, the four-CD Led Zeppelin box may be Atlantic Records’ biggest money-maker since the box’s release last fall. Although Atlantic director of catalog development Yves Beauvais won’t say how much the label has made on the set, his counterpart at another record company estimates Atlantic is making somewhere between $12 and $20 profit on each copy. The box reportedly sold 750,000 copies in the U.S. alone — the equivalent, if the Fats Domino set is any indication, of 8 million copies of a new pop release — and is said to be doing just as well overseas.

Star Time
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