Company Town : Out of Tune?

After three years of dramatic growth, the $12-billion domestic music market hit a wall in May. Despite earlier industry projections of double-digit growth, sales have remained flat this year, with consumers buying only 454.5 million albums since Jan. 1.

EXPLAINING THE SLOWDOWN

* Retailers blamed tepid sales on a dearth of commercial blockblusters during the first three quarters. They cite poor album showings by both aging icons such as Rod Stewart and Bon Jovi as well as new acts such as Red Hot Chili Peppers, Lenny Kravitz, Candlebox, Blind Melon and the Spin Doctors.

* Retail chains also blamed sales declines on cut-throat competition from discount houses such as Best Buy and Circuit City, which sell compact discs below cost in hopes of luring consumers into their stores to buy electronic goods and other products.

* In addition, analysts attributed declines in album sales over the past six months to the fact that music fans are spending money on other forms of entertainment. Computer hardware sales are up, as is demand for software and enrollment for interative on-line services. Demand is soaring for CD-ROM video games, such as Sony’s $300 PlayStation, which has sold 300,000 units since its release in August. Finally, some analysts are blaming increasing movie attendance.

THE HITS

“Jagged Little Pill” by Alanis Morissette has sold 2.3 million copies in the United States since its June release.

“Cracked Rear Mirror” by Hootie & the Blowfish has sold more than 5.3 million copies in the United States since Jan. 1, making it the best-selling album of the year.

THE DUDS

After 19 weeks, Bon Jovi’s new “These Days” ranks No. 163 and has sold only 465,000 copies domestically, though it is booming internationally.

After the smash success of Green Day’s debut album, the follow-up, “Insomniac,” has already slipped out of the Top 10, selling only 400,000 units.

SOUND TRENDS

Shipments of compact discs, cassettes and records. Dollar value, in billions:

CDs

1994: $8.5

Cassettes

1994: $3.0

LPs

1994: $0.2

Source: Recording Industry Assn. of America. Researched by JENNIFER OLDHAM / Los Angeles Times