Digital Nation: Online Music Sales Ring Jingle Bells

Predictions of a strong holiday shopping season on Internet are proving true for record sellers.

(This is another in a continuing series of reports about music on the Internet.)

Staff Writer Chris Nelson reports:

Every year, all hell breaks loose on the day after Thanksgiving, when

shops are packed with holiday gift buyers, cash registers are ching-chinging

at every turn, and harried sales clerks try not to drown in the bustle

of it all.

But where's the excitement in the online world? Do dot-com CEOs hover

over their computer monitors, tracking each order that comes in?

Not at music retailer CDNow. This year the company waited until the

Thanksgiving weekend was over to examine holiday orders. Their excitement

began when statistics showed 1999 sales and traffic had tripled over the

same weekend last year, spokesperson Marlo Zoda said.

But on Dec. 2, when the company hit a high-water mark of 1 million page

views in a single day (repeated on Dec. 4), they let the electronic

high-fives fly.

"We sent out an e-mail to the entire company to let everybody know about

this incredible milestone," Zoda said.

The folks at CDNow are far from the only Internet retailers with dollar

signs in their eyes this year. Almost 20 percent of shoppers planned to

do some holiday shopping on the Web, according to a recent Wall Street

Journal poll.

United Parcel Service predicted that Wednesday (Dec. 22) would be its

biggest air delivery day ever, with 4.3 million packages shipped.

Some of those packages likely will be CDs and other music goodies sent

from online giant Amazon.com. Amazon.com's orders over the Thanksgiving

weekend were up 2.5 times over last year, according to Greg Hart, the

company's product manager for music.

That's not to say Internet sales are taking over the shopping season.

Online buying will account for only 3 percent of holiday shopping this

year, according to the Wall Street Journal.

But that's up from last year's one percent. And it's only expected to get

bigger, as more people get access to the Net and try shopping there.

"It's going to be a long time before Internet sales level out," said

analyst Ken Cassar of Jupiter Communications' digital commerce group.

A number of factors make music an ideal venue for first-time online shopping.

CDs are relatively inexpensive, and there's no difference between the Beck

disc you buy at the mall and the one you buy on the Net.

Also, you can listen to songs online before you buy, and you can easily

check out reviews of potential gifts.

And, as with any product, online music shoppers can avoid the crowds at

the local mall. Anonymity also offers an incentive, according to Zoda.

"Maybe you don't want to buy a John Tesh album from a kid with a mohawk,"

she said. "Maybe you're embarrassed."

While CDs make up the bulk of current online music purchases, other music

products are expected to gain steam in the years ahead. Amazon.com's

suppliers couldn't keep portable MP3 players in stock for this holiday

season, Hart said. (Neither Amazon.com nor CDNow would release specific

sales figures.)

Custom compact discs also are expected to grow in popularity. This year,

a make-your-own Beastie Boys compilation became one of the best-selling

custom discs in musicmaker.com's history, according to company representative

Bill Crowley.

CDNow's custom Christmas disc offer allows listeners to choose holiday

tracks from artists ranging from crooner Bing Crosby to soul man Al Green

to surf-rockers the Ventures. For one week in late November and early

December it was the store's most popular holiday album, Zoda said,

out-selling Jewel's new Joy: A Holiday Collection, which includes

the folk singer's renditions of such classics as "O Holy Night" (RealAudio excerpt).

* * *

Country rockers Wilco have released new, live-in-the-studio video

clips for four songs at CDNow. The segments, offered in streaming Windows

Media format, also include interview footage and will be available through

mid-January, according to a press release. Wilco are the first band to

take part in CDNow's new "WebSessions" promotion, which will include

additional bands in the months ahead. ...

New videos from Red Hot Chili Peppers ("Around the World"), Missy

"Misdemeanor" Elliott ("Hot Boyz") and Kid Rock ("Only God

Knows Why") are featured on the recently launched PreviewTunes.com site.

Part of Time Warner's new Entertaindom.com family of websites, PreviewTunes

includes dozens of streaming Windows Media audio and video clips from

R.E.M., Metallica, Madonna, Sugar Ray, LL

Cool J, Barenaked Ladies and others. ...

Clothing designer Tommy Hilfiger launched his new Tommy.com page last week

with a focus on music as much as fashion. The site includes the Tommy

Radio Internet station, testimonials about Tommy gear from musicians such

as Jewel, and interview and video clips from Bush and

Lil' Cease. The site doesn't sell Hilfiger's clothes, but it

"provides us with another avenue for communicating [our] lifestyle vision,"

the designer said in a release. ...

RuffLife, the new label from Ruffhouse (Fugees, Kris Kross)

Records founder Chris Schwartz, will be distributed via download by the Atomic Pop Internet label. RuffLife's first release will be the Night Life EP by hip-hoppers the Outsidaz. The first cut from the set, "Don't Look Now," already is available in RealAudio on the Atomic Pop website (www.atomicpop.com). Atomic Pop is best known for releasing Public Enemy's most recent album, There's

a Poison Goin' On ... ...

Online MP3-storage site myplay (www.myplay.com) is offering a holiday

promotion that allows users to send friends musical e-mail greetings.

Listeners can choose to send groups of songs compiled by musicians such

as Willie Nelson, Ben Folds and Kid Rock, or create

their own playlist of tracks stored in their myplay accounts. For every

greeting sent, myplay donates $1 to the City of Hope cancer research

center. ...

The MP3 website Riffage.com said last week it had raised $21 million from

new investors. Among the heavy hitters putting cash in Riffage are BMG

Entertainment (Santana, Foo Fighters, Whitney Houston)

and America Online. Riffage is one of several sites offering downloads

from mostly unknown artists.