Monday, December 01, 2008

The CD Goes into Steep Decline...

This morning, a new article posted at Digital Music News quoted Nielsen Soundscan as stating that the forth quarter of 2008 is "shaping up to be the worst decline in the history of the CD" in terms of sales. "In response, Wal-Mart has been driving the price of CDs southward, often below $5, and shrinking shelf-space aggressively. 'We suspect other retailers will follow Wal-Mart's lead and reduce CD floorspace significantly in 2009, as the format loses interest with consumers and ceases to be a traffic driver on 'new release' Tuesdays,' research analyst Richard Greenfield stated.

Overall, CD sales are down about 20 percent from just a year ago.

You can read the full article at http://www.digitalmusicnews.com/stories/112608fourth . Good reading. Sign up for their newsletter while you're there. It's terrific.

I still think there is a place for the CD. There are a lot of folks of my generation (born in the 60's) and earlier who will never buy an iPod and who really aren't into the whole "digital music download" thing. If there's an album out there we really do want, we'll buy the CD. The problem is, there aren't that many albums we really want that we don't already have. Everything we were interested in "owning" we purchased years ago. And one of the things about getting older is that while we still enjoy listening to music, owning it just isn't as important anymore. The music we listen to doesn't "define our life" like it did when we were kids.

So my generation still enjoys CDs, we just buy less of them... a LOT less of them.

Remember getting those offers from "Columbia House" in the mail where you could get 13 CDs for a penny if you agreed to buy just five in the next year? That whole concept seems like a joke today. And you know... I haven't seen one of those offers in my mailbox in a really, really long time. Hmmm.....

Frankly, I don't know what I'd do if someone handed me a stack of CDs like that. I'd never listen to them. Tell me I could have any 13 CDs I wanted from a stack of 1000 and I'd walk away. It's not worth my time to even look. Why? Because I'm listening to music online now. Between Internet Radio, Pandora, and my Rhapsody subscription, I'm set for life. I can listen to whatever I want, whenever I want. No physical CD necessary.

Yea, I still buy CDs... maybe one a year. Maybe two. Three would be a lot. But 10 years ago? I probably bought two or three a month.

Record companies, there's a big part of your declining market.

The kids are aren't buying CDs because their going completely digital, buying downloads, putting them on their iPods, trading with their friends.

The mature generation isn't buying CDs because we already own pretty much everything we ever wanted. And when we do listen to "new" music, we get it online.

I probably buy more CDs as gifts for others than I buy for myself. Oh wait, that was LAST year! I didn't buy a single CD as a gift for anyone this year.

No one wanted one.

David Nevue
The Music Biz Academy
http://www.davidnevue.com
http://www.musicbizacademy.com
http://www.twitter.com/davidnevue

7 comments:

Edward said...

Great post David. In 10 years or so, there won't even by CDs. My prediction anyway. Everything will be available online. Music will be available as downloads only.

Well, maybe not in 10 years. Probably 12 or so but at the rate technology is moving, who knows?

David Nevue said...

Yea, I have to agree with you, Ed. Certainly, we'll get to a point where it's going to be hard to find much of a selection in stores like Target, Wal-Mart, Best Buy and so on. When that happens, where will people go to buy CDs from their favorite artists? Pretty much online, I think. I have a feeling the music market 10 years from now will be like nothing we could have imagined 10 years ago. It's going to be radically different.

Heath Vercher said...

While it's true there is a serious decline in CDs at major retailers, independent artists still seem to be doing well (I quote David as a perfect example)

On another note, the independent record label I work for is still doing great with CD sales, and we are in both retail markets and independent stores. The majors are definitely losing out, but for brands who never signed on to the big labels, we still have a lot of room for growth.

- Heath Vercher

David Nevue said...

Hey Heath,

You're right... the decline certainly doesn't seem to be effecting my own sales in a noticeable way.

My post was really a reaction to the article, more than anything.

However, I should post something about how declining sales does/does not effect independent artists. That might be something I could invite comments on.

Perhaps a "Part 2" follow up to this posting is in order. I'll put one together in the next day or two.

Indi said...

David,

I'm looking forward to a "Part 2" of this post. I agree with the article, but I found myself feeling a bit discouraged as an independent artist who is preparing to release my first album next year.

What I would like to know is, in this period of significant decline in CD sales, what are some recommendations for the independent artist?

-Indi Gaston

David Nevue said...

Hey Indi,

Thanks for posting. Hopefully, I can get to a part 2 next week. We'll see. Lot's happening around here as always.

I myself am finding CD sales are on the incline. I think I've sold more this last month than ever before. I'm sure over 1000 this month, probably 600 or so online between my web site and Amazon.com. It's been wild.

I'll write more about this in part 2 next week.

Bobo Bubalisky said...

I am 53 and still buy lots of CDs. I buy them at "record stores". I think it's great that WalMart and Best Buy will be getting out of the CD biz. Then the specialty, and music specific shops will have more of a chance.
Only 30% of the music I listen to is available through Itunes or other large download sites, so until that changes, those of us who still LIVE FOR MUSIC will provide a market to real music stores.