David RD Gratton

Tag: Music CD

More on CD Sales Collapse

March 23, 2007

The collapse of the recorded music industry is now getting reported by the media. Techcrunch is reporting that music sales are collapsing and down 20% from 2006. My Prediction of a 30-50% collapse is easily going to be realized.

Mike's blog post and many of the comments basically assume that recorded music will not be a viable economic model anymore. Artists and entertainers will need to make their money in merchandise, licensing, and live shows. Recorded music is dead.

I for one do not believe that. Recorded music can be reinvented as I commented in his blog post:
There are other avenues than simply saying give the song for free and get them to the show. Are you really happy with the recorded music experience? If not, I and others believe there are opportunities to be explored there to bring value back to the recorded music experience:

I truly believe there is great opportunity in recorded music that will come to the fore as in the next 12-18 months.


More On Music CD Sales Free Fall: Economic Disruption Upon Us

March 19, 2007

More on the ongoing collapse of music CD sales. Marc Canter noted today that when he visited the San Francisco Virgin Super Store that Music CDs are now $10.00. Less than 7 years ago CDs were $20.00. It will take twice as many unit sales to equal total revenue for the industry at this rate. Sure the cost of manufacturing these shiny discs have fallen considerably, but costs tied to retail overhead and margins, distribution, and manufacturing costs were about $7.00 per CD back then.

CDs are being sold at a loss for whole economic chain: retailer, record label, and ultimately artist. This is a disaster. There is no other way to look at it. I am more confident than ever of my prediction that we will suffer a 30-50% collapse in sales. I find no joy in that prediction coming true. Only some creative thinking and the full-embrace of new technologies by the industry is going to correct this massive economic disruption.

At the moment the focus appears to be strictly on changing business models around an audio file:

  • Subscription
  • DRM
  • Different pricing models
  • Give music away free and sell merchandise

I certainly understand the value in approaching these new business models, except DRM. However, I would hope that the music industry can reinvent itself into something grander, as it did when recorded music hit the market over 100 years ago. I think the DYLAN project is a great attempt at solving this problem in terms the industry and artists understand. I would like to see more creative thinking and see other projects develop to address what in reality is a great opportunity.

Syndicate content