For the first time in history, global revenue from music downloads and subscriptions has overtaken sales of physical formats.
Digital revenue grew nearly 7 percent to $6.85 billion, while physical sales — of which CDs make up the vast majority — fell 8 percent to $6.82 billion. [via]
According to MBW analysis, the overall UK albums sales market – that’s real album sales, not counting streaming/track equivalent calculations – fell 5.25% in H1 2015 (38.1m down to 36.1m). Put all that together and the pure album sales volumes in the first half of this year look like this:
This chart alone holds the answer: People are still buying CDs in 2015 and in years to come. Our theories on why the CD is still an unbeatable medium even if Apple is not getting rid of CD players is as follows:
#1. Physical format is proof of fandom
If you really love a musician, you want to be known as a hardcore fan. That’s the reason why merch are big hits. In this note, CDs are definitely more hardcore than music files no matter how modern and footprint-conscious we are.
#2. CDs make us nostalgic
A big chunk of concert goers and music lovers have come from an era where CDs were the predominant medium. That means, they’re used to buying CDs and they probably have a big CD collection in their living room.
#3. We love opening packages.
It’s nice to see an mp3 file but it’s much nicer to remove the cling wrap from the CD, smell the booklet, leaf through the pages, and touch the CD.
#4. It’s something you can be proud of giving to a friend.
It’s your best friend’s birthday and you know he’s crazy about a certain band. What do you give him? a.) download codes b.) limited edition box set CD c.) signed CD and t-shirt. It’s a toss between b and c, right? Never a.
#5. Hard formats increase value through time.
You can’t sell the 200th download of Taylor Swift’s album on ebay 50 years from now. Or maybe you can but it won’t be as expensive as vinyl or CDs.
SO WHAT CAN MUSICIANS LEARN FROM THIS?
#1. The CD will still be alive in the next decade
The CD sales is declining but it’s still the number one medium bought by music fans. The transition from CDs to USB/downloads will take at least a decade more.
#2. Don’t stop making CDs
Sell downloads but you should always have CDs handy during gigs. People still look for them.
#3. Come up with creative ways to sell your CDs
Now that people can easily access your music through streaming or file sharing, you need to double your efforts to make your CDs more attractive. You can have a really clever CD packaging or you can bundle it with other items (shirts, stickers, etc) to make your fans feel that they’re getting more back for their buck.
James Hill is a veteran of the music industry. He first worked at Warner Reprise Records then later joined Interscope/ Geffen Records where he managed producers and songwriters and got his first platinum record for Keyshia Cole’s The Way It Is. He is now helping indie artists with branding and manufacturing through his company Unified Manufacturing, a CD/DVD/vinyl and merch company in LA.