Compact Disc Sales Plummet 20% Since Start of Year

SeekingAlpha.com ^ | March 21, 2007

[HAL9000]

In an indication of what the Wall Street Journal calls a "seismic shift" in the way people now acquire music, CD sales for Q1 2007 are 20% below what they were last year. Digital song sales, which were expected to salvage the industry, have risen 54% in 2007 from last year to 173.4 million, but that is not nearly enough to compensate for the 20% drop in CD sales to 81.5 million units. Overall music sales, both digital and physical, are down 10% this year. Adding insult to injury, one billion songs a month are traded on pirate networks. Eight hundred specialty music stores closed down last year, including Tower Records' 89 locations. The rampant success of Apple's iPod indicates that consumers are as interested as ever in acquiring music, but it also suggests they prefer to buy without either entering a store or handling a CD. If they must go to a store, they head for Wal-Mart or Best Buy, which offer CDs at deep discounts. Best Buy has been reducing the floor space allotted to CDs, and if Wal-Mart follows suit, the picture will grow even gloomier for music companies.

[L98Fiero]

"And virtually all of those were small label companies.

I'm with you - and I try to buy them directly from the artist where possible."

Kudos to both you guys.

[camle]

a fool and their money are soon parted. I sincerely hope you ain't counting ME in that group who think it's OK to pay 1.5K for a pair of shoes.

My friends call me Mr. Cheap-o. I go to Payless.;-)

[CharlesWayneCT]

Is it the CDs, or the fact that there are no good albums being released this year?

When one of the top hits playing is a parody song by Weird Al Yankovich, you have to wonder.

[org.whodat]

It is a combination of ipods and most of the new music it trash.

Tell it like it is!!!! Doesn't take much to hear a boom, boom, boom, boom. ipods work by doing away with quality.

[CharlesWayneCT]

Walmart was under a dollar a song last time I looked.

[CharlesWayneCT]

A guy I work with runs a side business with his wife doing artwork and reprinting of CDs for regional bands. It's hundreds and two hundreds. I guess if the band "makes it" they would sign up with a label.

[Theophilus]

I would have bought Norah Jones' new CD but it was filled with her unpalatable political opinions.</p>

[reagan_fanatic]

However, it's a Russian site, and I'm not willing to give them my credit card

Same here. I don't feel comfortable giving my credit info to a Russian site. For now, I'll just stick to WalMart for downloading songs.

[Theophilus]

I would have bought Norah Jones' new CD but it was filled with her unpalatable political opinions.</p>

[Sgt_Schultze]

There's really no reason for the record companies to continue to exist. Artists could pay private recording studios to produce their songs and negotiated or stipulated prices. The artists could then sell the downloads directly on their own websites and keep the whole dollar. I would hazzard that most folks wouldn't mind paying the buck, especially if they knew it was going to support their favored artist.

[durasell]

a fool and their money are soon parted.





There are a lot of different types of fools out there. Is any pair of shoes worth $1,500? Who knows? But it's a global market and there are a lot of people with a lot of money out there. If you spend $2,500 for a bottle of wine or $600 for a "nice dinner," then why not $1,500 for a pair of shoes?

[Old_Mil]

Well, good! This is a positive development. The music industry has been pushing garbage for 15 years and is now paying the price.

[durasell]

I know a band that turned down a label because they were making more on their own.

[Constitution Day]

Good article that mentions one of my favorite "small label" bands:

Music's New Gatekeeper (WSJ)
From their Silicon Valley cubicles, Apple staffers have become music's unlikely power brokers. Our reporters on the horse-trading that can turn unknowns into stars.

When The Shins' third album, "Wincing the Night Away," made its debut in January at No. 2 on the Billboard 200 album-sales chart, nearly 30% of the first-week sales were made online -- most on iTunes.

For consumers, Apple's growing influence means exposure to a wider range of music. Apple has told some recording companies that music from independent labels accounts for about 15% of iTunes sales, compared with about 5% for physical retailers.

[camle]

I'm not sure that I want the kind of mooney that would entitle me to spend $600 on a feed. I can go to that scottish place for four bucks. you know macdougals or something like that:-)

[durasell]

Expensive meals are just another thing that exists in the world. Neither good nor bad. It only becomes bad when folks place too much importance on such things.

As for myself, I prefer diner food (though when out West, I prefer cafe food).

[camle]

I prefer dead animals.;-)

[stbdside]

Most of the CDs I have bought recently are from small labels. The biggest label I buy from is ECM.

[ken5050]

Or $20,000 for a handbag..

[mikeybaby]

I don't know, other than to agree that content is where the value resides.
The method of distribution of that content is, in my mind, the real issue.
I feel the current video providers (ABC, NBC, etc.) have much more power than the record guys have (or had), due the fact that the video providers also have tie-ins with the networks.
For example, I watch CNBC, which is tied to NBC since both are owned by GE.
OTOH, the record guys thought that their monopolies were unassailable, too.
YouTube is a new wrinkle also.
The conventional (ie., Hollywood, if that can be called conventional) thinking is that only big budget films can succeed. Along those lines, I think films like "The Blair Witch Project" and "300" and "The Passion of the Christ" argue against that "wisdom".
Should be fascinating to watch.