This article, however, caught my eye, from Britain's Prospect magazine. It doesn't take an expert to know that the CD is in decline and downloadable music is in ascension, but writer Robert Sandall really covers the field. His basic point it that record companies are coming to realize they can only survive as consumer marketing companies. For reasons why, try his opening:
There is a story doing the rounds in the US that says a lot about the state of the music business. It concerns a young rock band who decided to stop selling their CDs at concerts. Selling CDs has, for many years, been a good way for an act to reclaim the margin that would otherwise have been snaffled by a retailer. But it made no sense to this band once they discovered that by selling CDs for $10 they were cannibalising sales of their $20 T-shirts.
There are two points to note here. First, that a simple garment with a logo stamped across it, probably manufactured for pennies in a third-world sweatshop, now costs twice as much as an album of digitally pristine, highly wrought music recorded in a state of the art western studio. Second, most bands, however successful, now make their money from live work and the merchandising opportunities that go with it, rather than from recordings.
Like Sandall, I believe the seeds of destruction lay in the massive greed of the record companies themselves, and that there is indeed a sense of chickens coming home to roost:
The CD persuaded many music fans to replace their vinyl collection with digital copies of music they had already paid for. And the rise of the CD permitted record companies to double the price of their basic product without incurring a huge uplift in costs. Even allowing for the royalty paid to the joint inventors of the CD—Philips and Sony—the discs were soon being manufactured for little more than it cost to crank out vinyl records on ancient presses.
For some of us who could buy records at discount retailers in the late 1970's and early 1980's, the CD actually quadrupled each expenditure. I could pick up almost everything I wanted for $4.99, sometimes $3.99, even less for cut-outs and over-pressed releases. Suddenly it was $18.99 retail for all the same music, although at some point bonus tracks were added on the CDs to fill out all that empty disk space.
While CD prices are finally coming down, concert prices are unfortunately rising astronomically, which I think will eventually do some damage to performers (like Kelly Clarkson, pulling out of an arena tour this year after ticket sales tanked). I used to see see acts almost every weekend, because it usually cost less than $20 a ticket. So I got exposed to a ton of artists, and added their inexpensive albums to my record collection.
What's funny about the current value of CDs as trade goods is that, with artists like Prince leading the charge, CDs are increasingly being given away. Even more astonishing, in some cases can't even be given away:
When the Sunday Times gave away a free CD of old Oasis songs in 2000, it registered its highest circulation ever. In the following weeks, the BPI noted, retail sales of Oasis albums actually declined. But now even newspapers and magazines seem to have lost their appetite for covermounts. Last year, Q discontinued them on the grounds that the cost of manufacturing the discs was no longer justified by a spike in circulation. No clearer sign exists that, at least for musically savvy Q readers, you can't give CDs away.
How low on the value chain can the now-maligned CD go?
Will record companies soon be paying us to pick them up?
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