Christian music makers note some positives in the changing industry

As the music industry gathers for its annual gala event this month, it is seeing a new business model emerging. The hosting of the 2011 Dove Awards in Atlanta on April 20—the first time the show will take place outside of Nashville in its 42-year history—mirrors a move away from longstanding approaches to distribution. 

Together with continuingly strong in-store sales, the changes are seen by many to signal opportunities for the category despite the concerns of digital sales.

While industry observers say lower music sales has forced downsizing at the major labels, the growth of the digital market has seen small labels emerging and nontraditional sources of music coming to the forefront. 

Among the indicators: A California church's two small yet thriving labels have been gaining attention; the world's largest Christian publisher is looking to expand its music distribution; and a multi-artist compilation album from a New York Times best-selling author was recently independently released. 

Ed Leonard, whose term ends this month as Gospel Music Association president and board chairman and who is Daywind Music Group's president, told Christian Retailing that "it is much easier to make and promote music inexpensively these days."

Small labels are emerging because the cost of recording is going down, added Leonard, noting that Vineyard Music recently signed a distribution arrangement with New Day. "With today's technology, anyone can record an album in their basement, garage or on their bus for that matter,"  he said. "Paired with the use of the Internet for getting information out to audiences, it's possible for a small label to do extremely well."

One good example is Jesus Culture Music and its sister label, Bethel Music—both run independently, but part of Bethel Church in Redding, Calif. Featuring worship leaders Kim Walker and Chris Quilala, Jesus Culture Music—stemming from a youth and young-adult movement that began at Bethel Church in 1999—has sold more than 100,000 albums online and at events. 

Last year, Kingsway entered into an exclusive, long-term recorded music, marketing and distribution agreement with both labels—making albums available for the first time to Christian and general market stores. Come Away—Jesus Culture's fifth release—was its first recording to be released to both physical and digital retailers, last fall.

"Having a physical presence and marketing focus at CBA retail is critically important to creating awareness of Jesus Culture to the broader Christian consumer," Kingsway Vice President North America Steve Nicolle told Christian Retailing. "I think with the major labels paring down so significantly, there is a real opportunity for smaller or independent labels."

Longtime Christian music artist and multiple Dove winner Michael Card—whose, Luke, the first of four Gospel-focused "Biblical Imagination" books, to be released this month by InterVarsity Press along with a companion CD from Discovery House Music—agreed.

The growing number of small labels is "just one of lots of signs the way the music world is changing," Card told Christian Retailing. "There are some bad things to it, but I think it's mostly good. This is the best time ever to be a consumer in terms of music. ... Bit I think it's all about the technology. The big record industry was based on CD sales, and none of them saw it coming."

Card added that there were a lot of benefits to small labels. "There's a lot more freedom to be creative," said Card, whose music is distributed by Covenant Artists, which he considers an independent label. "When there were just a few big record companies and a lot of it had to do with getting songs on the radio and selling records, that really kind of dwarfed your creativity. "

Meanwhile, Thomas Nelson is looking to expand itsmusic business after entering distribution of the category last year. The publisher released Women of Faith Worship—featuring 10 studio-recorded tracks by the Women of Faith (WoF) worship team—in 2010, the first time the Nashville-based publisher distributed music from its conference brand. 

"We understand Christian retail and … are well-qualified to help fill the void left by a diminishing music industry, especially as it relates to sales to Christian retail and independent bookstores," said Tom Knight, Nelson's senior vice president of Christian retail and ministry development group. 

Before the new recording, WoF projects were distributed by Integrity Music and more recently by Word Distribution. The music distribution extends beyond WoF as well. Knight said the publisher is "open to discussion with labels as to sales, retail marketing and distribution" of Nelson products.

Spring Arbor's expansion of music distribution in the past year—including exclusive delivery of veteran singer Steve Green's latest release—has been a help to stores and the music industry, said Skip Prichard, president and CEO of parent company Ingram Content Group.

"Christian music is not dead as a category. It is alive," he said. But "artists are struggling, with music labels that are dropping them. We want to help in any way we can." 

Elsewhere, Karen Kingsbury's Songs That Inspire Karen Kingsbury was released in November by Nashville-based multimedia company in:ciite Media. The CD features 10 songs selected by Kingsbury from Mandisa, Matthew West, Britt Nicole and Mark Schultz.

Chris Thomason, co-founder and president/CEO of in:ciite, told Christian Retailing that his company has also done music, short film and DVD projects with well-known Christian authors such as Max Lucado, Erwin McManus and Beth Moore as well as several music artists, including Jeff Deyo, Lenny LeBlanc and Travis Cottrell.

"The word 'label' is becoming less and less relevant to describe what we do," said Thomason, who has 20-plus years experience developing music and multimedia brands, including 13 years at Integrity Music. "The important distinction here is that music labels used to be in the business of grabbing shelf space, on the radio and in the record store. 

"Now, the music industry needs to realign and be in the business of finding, connecting and leading groups of people who want to follow content and connect with the other people who want to do the same," he added.

Christian music sales strong in 2010

Christian retailers fighting the continuing decline of music sales made strides in 2010, according to new sales figures. 

Greg Bays—chairman of the Christian Music Trade Association, which tracks the sales of Christian music—reported that in a year when music sales in the overall industry fell 19.4%, 2010 unit sales in Christian retail dropped by only 9.2%. At the same time, sales of Christian music in mainstream outlets were down 22.4%, while Christian retail chains only saw a 4.4% sales decline in the category. 

"Across the Christian retail market, it appears that the chains have been more consistent in increasing their store counts and their overall market share,"
Bays told Christian Retailing. 

"Retailers—including the chains and many strong independents—have succeeded when they have been aggressive in focusing on music as a significant category, which drives traffic and sales at Christian retail."

Physical CDs still account for a clear majority of the sales of Christian/gospel music, he added. Bays, senior vice president, sales and marketing for EMI CMG Distribution, noted that physical CDs made up 73.4% of sales in 2010—slightly down from 78% of overall Christian music sold in 2009.

As far as digital sales, Christian music saw a 7.6% increase compared to a 5.8% rise in the overall industry. In 2009, Christian music's digital sales grew 28.3%, Bays said. "As any new format/configuration matures, sales growth associated with that format year over year will slow down over time." 

The three top-selling Christian albums last year were Tonight by TobyMac (Forefront Records/EMI CMG), Here I Am by Marvin Sapp (Verity Records/Provident-Integrity Distribution and Awake by Skillet (Ardent Records/INO Records/Provident-Integrity). 

GMA Chairman of the Board Ed Leonard told
Christian Retailing that year-end figures indicate that "music is alive at Christian retail, and deserves to be a significant part of a Christian store's product mix."

"The consumers who frequent Christian retail are still buying CDs," he said. "As sales of CDs at mainstream retail continue to slip, there is increased opportunity for Christian retailers to take advantage by carrying a great assortment and promoting music."