Impressive as the growth of megachurches is, evangelicals have had even greater success in developing the market for Christian books, music, and other content. Twenty years ago, contemporary Christian music was a cottage industry with annual sales of $85 million. Thanks to sophisticated production, marketing, and distribution, sales totaled $720 million last year. "Today, we're bigger than classical and jazz combined," says John Styll, president of the Gospel Music Assn.
Evangelical publishers have managed to turn out a steady stream of blockbusters in recent years, making religion the hottest category in books. Christian radio now captures 5.5% of the nation's listeners, up from 2.2% in 1999, according to Arbitron. And total retail sales of religious products -- including books, music, gifts, and cards -- now total some $7 billion a year, according to Packaged Facts, a division of MarketResearch.com. That adds up to at least quadruple the amount sold in 1980.
ORIGINAL CREATORS. All this growth has caught the attention of Corporate America. The major Christian music labels are now owned by multinationals including EMI Group and Sony BMG (SNE). Publishers Time-Warner (TWX), Random House, and HarperCollins all have religious imprints. Hallmark owns Arkansas-based Dayspring, the largest producer of evangelical greeting cards, which invariably feature scriptural verse.
Despite the growing corporate involvement, evangelicals are still the driving force in creating Christian content. Take books. A decade ago, "Nothing much had happened with the Christian book market," says Jane Friedman, president of HarperCollins, which owns Grand Rapids-based Zondervan, the world's largest Bible publisher.
But then evangelicals began expanding the reach and appeal of their books. In 1995, for instance, Mark Taylor, now CEO of Tyndale House, the largest privately owned Christian publisher, met with authors Tim LaHaye and Jerry Jenkins to discuss a partial manuscript for a book they were calling Left Behind, about those remaining on earth after the Rapture.
CHRI-FI. Several publishers had already rejected the manuscript. But Taylor told the authors, "If the rest of the book is as good as the first chapter, we could sell 500,000 copies." The book spawned a series that has brought in more than $650 million and helped establish Christian fiction as a huge market.
Thomas Nelson (TNM), the largest publicly held Christian publisher, has been even more aggressive. When CEO Sam Moore, who began his career as a Bible salesman, arrived at Nashville-based Nelson in 1969, annual sales amounted to just $4 million.
Today, Nelson offers a Christian perspective on many subjects, including business, politics, and everyday living. Nelson has developed a huge stable of best-selling authors, including John Maxwell, a former megachurch pastor who now writes on business leadership and is a regular on the corporate speaking circuit, addressing audiences from Maytag (MYG), Bank of America (BAC), and Wal-Mart (WMT).
Then there's inspirational author Max Lucado, who also pastors a megachurch. "I write for the people who don't like to read," says Lucado, who has sold more than 40 million books.
All this helped push Nelson's sales to $233 million in fiscal 2004. And in the first three quarters of fiscal 2005, profits were up 18% on another 8% jump in sales. "We're creating new products to address new market opportunities," says Nelson President Mike Hyatt, who notes the best-selling product in the company's third quarter was a kids' DVD, Flo the Lyin' Fly.
GOING SLICK. Nelson is even breathing new life into the oldest book of them all, the Bible. In 2003, it released Revolve, a New Testament packaged in a glossy magazine, which looked more like Seventeen than Holy Scripture. It turned into such a smash that Nelson has since come out with a whole line of "Bible zines," one of them a hip-hop version.
Similarly, earlier this year Zondervan issued a new Bible translation aimed at 18- to 34-year-olds. It comes in nine different formats, including a digital version suitable for loading onto iPods.
No wonder TimeWarner decided it needed a piece of the Christian book market. But rather than buy an existing publisher, in 2001 it launched Warner Faith from scratch by hiring Rolf Zettersten, a senior executive from Thomas Nelson. The game plan: Use TimeWarner's clout to muscle into the market. Zettersten's first move was to snap up Joyce Meyer, a top author and speaker on Christian living. He then used TimeWarner's distribution clout to double her sales to 2 million last year.
INTO THE MAINSTREAM. Then Zettersten convinced Joel Osteen, pastor of Houston's Lakewood Church -- America's largest -- that TimeWarner could do a better job than a purely Christian house in building mass demand for his book. "We're the fastest-growing division at TimeWarner books," says Zettersten, who predicts Warner Faith will become the industry's third-biggest player within three years.
Similarly, while the Christian music labels are still run by people with deep roots in the evangelical community, their multinational parents have dramatically increased their distribution capabilities. "In the mid-'80s, we had no real distribution into mainstream outlets like Target (TGT), Wal-Mart, and Tower," says Terry Hemmings, president of Provident Music Group, the Christian label now owned by Sony/BMG. Much Christian music was available only at Christian bookstores. "But that's changed dramatically in the past 15 years," says Hemmings. Indeed, more than half of some Christian albums now sell in mainstream outlets.
Cable TV's recently launched Gospel Music Channel hopes to tap into the growing popularity of Christian music. Its backers include Constellation Ventures, the venture capital arm of Bear Stearns Asset Management (BSC). "We saw a pretty zealous fan base that could attract advertising," says Dennis A. Miller, a partner with Constellation Ventures. Indeed, Ford (F) just signed a multiyear deal to sponsor the channel's new Gospel Dream show, which will bring promising Christian performers together to compete for a contract with a major label.
RADIO REACH. So far, corporations haven't shown as much interest in Christian radio. That's surprising because "Christian music is the fastest-growing area of radio," says Frank Wright, president of National Religious Broadcasters, which represents most of the nation's 2,000 religious stations, almost all run by evangelicals. "And the vast majority of these are run by nonprofit organizations," says Wright.
The most notable exception, publicly held Salem Communications (SALM), has more than 100 Christian talk, music, and news-talk stations concentrated in the nation's 25 largest markets. Salem Chairman Edward Atsinger, a committed evangelical, made his mark as one of the pioneers of modern Christian radio, launching his first religious station in California back in 1974. These days, Salem is doing far better than the rest of commercial radio. Last year, operating income surged 28% on a 10% jump in sales, to $197 million, up from just $90 million in 1999.
Yet Christian TV actually has shrunk in the past five to ten years, according to the NRB's Wright. "The number of stations totally devoted to Christian content has declined," he says, "even as vertically oriented cable companies have become less open to carrying our programming."
DISNEY DEBUT. Still, some believe the tide is beginning to turn. "There's a lot cooking behind the scenes," says Christian author Lee Strobel, who currently hosts the Faith Under Fire talk show on PAX. Meanwhile, NBC has been airing a faith-based drama, Revelations, about the conflict between a scientist and a nun during the "end of days" predicted by the Bible. Other networks are developing new faith-related shows for the fall.
And thanks to the phenomenal success of last year's The Passion of the Christ, evangelicals have high hopes for the film The Lion, the Witch, and the Wardrobe, based on the first book in the classic Christian children's series The Chronicles of Narnia. Disney will release the movie in December.
Ironically, even as Christian books, music, and other media have increased in popularity, specialized Christian bookstores have lost out. Until the mid-90s, they pretty much had the market to themselves. "But these days, from Wal-Mart to grocery stores, retailers of every stripe want a piece of the Christian action," says Bill Anderson, president of the Christian Booksellers Assn., which represents some 2,500 Christian specialty stores.
No one has taken a more aggressive approach than Wal-Mart. In the early 1990s, it "carried only two Christian books and two Bibles on a lower shelf in the social stationery department," recalls Ron Land, senior vice-president of mass-market sales for Thomas Nelson, who has been working with Wal-Mart for some 15 years.
SQUEEZED OUT. But after Land helped convince the nation's largest retailer it was missing a major market, the chain began a big expansion. Today, "Christian books represent up to 20% of its book business, and Christian merchandise [including music] has been one of its fastest-growing categories," he says. Similarly, Barnes& Noble (BKS), Target, and many other retailers have also been devoting far more space to Christian media.
And that's created tough sailing for many Christian stores. "Our industry has been going through the perfect storm," says Mark Scott, president of LifeWay Christian Stores, a chain of 123 outlets owned by the Southern Baptist Convention. It's not just that Christian stores face far more competition. They've also had to trim margins to compete with retailers like Wal-Mart. In the resulting shakeout, some 1,000 Christian bookstores have closed their doors in recent years. Still, the Christian Booksellers Assn.'s Anderson argues that the surviving Christian bookstores can still prosper. "General retailers want to cherrypick, while we offer the full orchard," he agues.
Even so, Anderson, along with many executives in the Christian book and music industries, believe the market remains far from saturated. Indeed, most evangelicals still don't visit Christian bookstores or spend much time listening to Christian music. And that suggests these businesses still have a long ways to go -- even if all they do is tap into the receptive market of born-again believers. By William C. Symonds in Nashville, with David Kiley and Tom Lowry in New York, and Kirstin Dorsch in Atlanta