Tesco’s Coronation Street album is just the latest embarrassing flop for the retailer, so why is it persevering with its entertainment exclusives, asks Suzy Bashford

On paper, Tesco's exclusive Coronation Street compilation album looked a sure-fire hit.

The soap has 11 million regular viewers, is a good fit with the chain's customer demographic and the album launched in time for Corrie's much-publicised 50th anniversary last month. The perfect stocking filler surely?

Well, er, no. The album failed to break into the top 100 chart on release and only limped into 26th position during the anniversary week not a disaster in itself, but coming hot on the heels of another poorly received Tesco exclusive, the debut album from Nadine Coyle, not to mention the risible Jackie Collins' Paris Connections DVD, not exactly a ringing endorsement.

So why has the exclusivity deal suddenly become such a big deal? And given the high ratio of flops to hits, is it a game the likes of Tesco should really be playing?

While high-street retailers have dabbled in exclusive entertainment for years, for the multiples it is a relatively recent phenomenon, one that has gathered pace dramatically over the past year. It's not hard to see why. Exclusivity offers them the chance not only to get one over their grocery rivals but also to grab the low-hanging fruit from the clutches of a dying high street entertainment market.

With Zavvi and Woolworths gone, this has already been pretty much reduced to one major player, HMV, as sales have migrated online. Thanks to their buying power, the big four, however, have no such trouble competing with online retailers on price and by offering consumers something their virtual rivals can't, what better way to stand out from the crowd?

There's also the tantalising prospect of lots of PR and media hype, and if the launch is successful, additional footfall, sales and brand loyalty. Or that's the idea.

Unfortunately, it's all too easy to back the wrong horse as Tesco has found. Asda, on the other hand, seems to have enjoyed more hits than misses and the explanation probably lies in its very different approach to exclusivity.

It tends to stick to tried-and-tested acts such as Chris de Burgh, exclusive extras such as the JLS DVD to celebrate the band's first album launch in 2009 and last year's McFly DVD Behind the Noise (on the making of album Above the Noise) and exclusive deluxe editions and artwork.

Tesco, however, has adopted a more ambitious but higher risk approach of backing compilation CDs, first-time solo acts and films. It has even taken on the role of record label, film company or publisher itself hardly its core areas of expertise.

Tesco's UK commercial and trading director Richard Brasher concedes it is "still learning how to do it" and that some promotions have "clearly gone better than others". However, he also contends that the retailer is providing a valuable service. "We've been giving the industry the support to produce products they would not have produced otherwise," he argues.

The question is: do consumers actually want these products? The jury is still out when it comes to a good chunk of Tesco's offering to date, which is something of a surprise given that the driving force behind the company's exclusivity deals is director of entertainment Rob Salter.

Salter worked in the States on similar deals for Walmart before jumping ship and crossing the pond to Tesco. Indeed, it was during his stint as Group Vice President Walmart & Global Sourcing in the mid-noughties that the US retailer scored two of its biggest hits with Garth Brooks and the Eagles, whose best days looked behind them before Walmart stepped in.

"These were both very established acts that had taken a break from recording and were not signed with a major label at that time," says Fergal Gara, Asda's director of entertainment. "Both projects delivered way beyond expectations and rocked the industry because no record company was involved. So people started asking questions like: is this the future?"

Walmart certainly thought so. It hit pay dirt again in 2008 with a collaboration with Sony on the ACDC album release Black Ice, and with a three-disc CD and DVD package Revelation from another US rock band, Journey. But Asda will no doubt be relieved that, three years later, Salter is finding it tougher to deliver the goods in the UK for Tesco. That isn't to say that everything has been a failure.

The retailer had modest hits with Faithless and Simply Red, and has done well with a number of children's DVDs. Merry Madagascar, for instance, has been a phenomenal hit, selling 1.2 million units last year. Similarly, its Halloween launch of Monsters vs Aliens: Mutant Pumpkins from Outer Space sold 600,000 copies, making it top DVD in the UK for three weeks.

Tesco insists the model works and Brasher says he is as perplexed as anyone as to why Nadine Coyle's CD didn't prove a similar success. "I think people have been a bit harsh," he says. One reason put forth by Tesco for the CD's poor outing is that it was difficult to get radio air play for any of the tracks, even the eponymous single (which wasn't part of the exclusive deal). The retailer was clearly taken aback and various conspiracy theories are circulating that rival record labels used their formidable PR machines to sabotage the launch. Music Week editor Paul Williams, however, rubbishes such claims.

"It had hardly any air play support simply because radio stations didn't think it was very good," he says bluntly. "It would have had absolutely nothing to do with the fact there was an exclusive deal in Tesco. There's huge competition every week in terms of releases trying to get on play­lists. Just because somebody in Girls Aloud brings out a single, that doesn't mean it will get on to radio. If radio execs decided it was a great track, they'd be shooting themselves in the foot by not playing it."

The retailer was on even shakier ground with its Corrie album, he adds, pointing out that the compilation market is notoriously hard to crack. Again, the Corrie album's failure was nothing to do with it being a Tesco exclusive, he argues. "You just can't assume that because it involves the most successful programme in the history of British TV that the 15 million people who watch it will buy the album. They're very different propositions."

Music aficionados agree that there is a general perception from those outside the industry that, as Williams says, any idiot can release an album. But record companies have years of experience and, in Coyle's case, this experience would have told them to rework the album, says Williams. "Reworking albums, even of established artists, happens quite often. In this case, there was no record company, so nobody questioned it," he says.

Others believe that a grocery store is simply the wrong environment for exclusive deals. "I can see why it works in an entertainment store but it's a lot more difficult in grocery," says Shoppercentric MD Danielle Pinnington. "We were interviewing customers in-store and I came across a band doing a launch there. It was actually quite disruptive for shoppers."

There is also the question of brand fit, says David Poole, MD of agency Life. "When looking to promote a new solo artist's new album as an exciting proposition for consumers to buy into, first impressions count, and if that artist's album can only be purchased alongside your weekly food shop, then it is easy to see how that taints the whole promotion," he argues. Indeed, he goes so far as to say exclusivity deals "seem like a lose-lose for all involved".

Mat Morrisroe, founder of BR&ND Romance, and the man behind the Bacardi/Groove Armada and Asda/Chris de Burgh deals, disagrees, but adds that people need to accept that the avenues to market and the measures of success have changed.

"It's all very well for record companies to say an album has only done 100,000. But that's the new reality," he says. "Faithless and Simply Red did about 60,000 each over six months. In the modern world, that's not bad. This obsession with first-week sales is a very old-fashioned way of looking at things, especially in terms of supermarket exclusives when you are limiting the opportunities to buy. We need to start more with a blank sheet of paper and not just do what has been done in the past."

Tesco and Asda clearly hope to be in the vanguard of the exclusive entertainment revolution and Tesco, for one, remains bullish. "We've sold two and a quarter million exclusive DVDs. Tesco entertainment and exclusive deals are doing really well and we'll push out and see where it takes us," says a spokesman, who's confident such products will gain in popularity.

They will need to and quickly, believes one expert. "If someone more senior than the head of home entertainment looks at the P&L account, Tesco will retreat from this strategy," predicts the record label executive. "They won't do media exclusives in the long term and certainly not after two or three more deals that fail to deliver."

Perhaps Tesco should try and secure the exclusive services of Nadine's more famous bandmate next time.

Jackie Collins: Paris Connections (film)
Launched: 6 September 2010
Tesco sales: 20,000 in first six weeks; 50,000 in total

Nadine Coyle: Insatiable (album)
Launched: 8 November 2010
Tesco sales: 10,000

Coronation Street: Rogues, Angels, Heroes & Fools (album)
Launched: 29 November 2010
Tesco sales: 10,000

Guns N' Roses: Chinese Democracy (album)
Launched: 23 November 2008
Best Buy sales: 216,000 in week one, against expected 800,000

Robbie Williams: You Know Me (autobiography)
Launched: 20 September 2010
Tesco sales: 100,000+

Merry Madagascar (film)
Launched: 23 November 2009
Tesco sales: 1.2m

Simply Red: Songs of Love (album)
Launched: 18 April 2010
Tesco sales: 75,000