"Everyone in the industry thinks of this Christmas as the last big
holiday season for CD sales," Mr. Sinnreich said, "and then everything goes
kaput."

NYTimes article

Love it or hate it, the "New York Times" is the paper of record. If
for no other reason than most news organizations no longer DO any
reporting, they just rely on wire services and print commentary/opinion. "The
New York Times" sets the agenda. And when they go on a story, it has
legitimacy. Wall Street, the business community, they now know what
active music consumers know, that the CD is headed for extinction. With
everybody clued in, its death will be hastened. THEN what?

1. Indie Retail

Survives. Just like vinyl has never gone completely away, there will
be people who will want to own discs in the future, whether they be CDs
or vinyl. Most of the indie stores that have weathered the crash will
continue in business, assuming their owners still want to keep the
doors open. Most have diversified, they don't rely solely on music to make
money. They will be kept alive by collectors. But they will not
matter. Just like vinyl doesn't matter. Disc sales will be a sideshow. If
you make a business out of it, more power to you, but most people just
won't care.


2. Big Box Retail

Best Buy and its brethren are going to kill the CD. They're gonna
shrink floor space and titles and one day they're just going to stop
selling discs completely. This will happen long before record labels desire
to give up on the physical format. Retail is in tune with its
customers' whims, it has to keep moving forward to survive. Soon CDs will be
evidence of the past, and these stores want to be the future. Big box
retailers will kill the CD the same way the industry killed the cassette
and vinyl. They'll just stop stocking them, and the consumer will go
elsewhere.

I think Aram Sinnreich's prediction is right. After this Christmas,
big box retailers will start folding their tent. Oh, maybe they'll sell
a few titles. But so do supermarket chains.


3. Radio

Radio hasn't given a shit about CD sales for years. Radio exists in
its own little backwater, where the advertiser is king and the music is
just part of the sausage. Hey, so many of the records that zoom up the
chart are not available at ANY price! With indie promo essentially
gone, radio groups are not worried about losing the relationship with
labels, there are no more perks left to acquire. As for radio station
shows and other give-backs, you don't need the label for that, just the
manager. The manager will be more powerful than ever before.


4. The Promoter

When the CD dies, Live Nation is going to be in even deeper shit.

Oh, AEG will be too, but they tend to only want to be in the
blockbuster business.

You see forever, the road took its clues from the labels. The labels
signed the acts, promoted them, created DEMAND! Now the promoter has to
create demand himself, and so far, he's shown no talent for it. Oh, he
could cede this development process to Net radio and other developing
exposure media, but that just means he'll have to settle for smaller
shows, and less revenue. Doesn't bode well for your stock price.


5. The Agent

Will have to work in concert with the manager to help create demand.
This won't solely be the province of the promoter. The label did the
heavy lifting for seemingly EVERYBODY in this business, what happens when
the label goes KAPUT!


6. The Manager

It starts with the manager. He creates the original demand. But the
goal used to be to sell to the highest bidder, to get the label to
COMMIT! And that commitment yielded exposure, which could earn you money on
the road, and in the old days, royalties. NOW WHAT?

The manager has to piece together all those new media strategies, to
try to get his band traction. MySpace, music blogs, it's not about grand
slams anymore, not even home runs, but BUNTS! Spreading the word,
building demand, is like starting at the bottom of the minor leagues,
working your way up to AAA, and then entering the bigs. First in KC. Or
Seattle. Some secondary market. It's gonna be tough. And the manager
is going to be starving all the while, because fifteen or twenty percent
of nothing is nothing. Which is why the established managers only want
established acts, and a vacuum has been created for new managers to
develop new acts. But there will be starvation along the way, and only
the fittest will survive.


7. The Act

Has to get a manager. That should be your goal, to create enough noise
to get someone to commit their money, time and effort to growing your
act. You can only go so far by yourself. After all, you've got to
write the music and play it! So, the act lights a fire, which burns up
through the manager, agent and promoter. As for the label?


8. The Label

There will be no labels if you can't get paid.

The online business presently doesn't deliver what the consumer wants,
which is ownership of a ton of unrestricted music for a low price.
Those wishing to sell recordings only have six months to solve this
problem.

It ain't iTunes. Even Steve Jobs says most people who buy iPods buy
almost no music at the iTunes Store
(http://www.apple.com/hotnews/thoughtsonmusic/).

It's not Rhapsody or Napster... You've got to get a new player, when
iPods rule. And the public is not ready for rental.

So...

The only solution is some kind of legal P2P. But the labels and
publishers are not ready for such. Therefore, stasis and infighting will
kill the recorded music business.

Sad, if you think about it. People should pay for music. But the
owners won't LET THEM! Not in the way they want to.

It's not about mergers, or laying people off, the solution is on the
other end, delivering a lot of cheap music. But no one is prepared to do
this. It's fascinating watching the movie. As fat cats inured to an
old way of doing things proceed to destroy their business.


9. Publishers

Will survive. And thrive.


10. The Public

We haven't had that spirit here since... Well, if not 1969, then 1979,
or '89 or even '99. But 1999 was almost TEN YEARS AGO! The public
thinks that most mainstream new music is crap. And if the labels die,
GOOD RIDDANCE! In other words, most people just aren't paying attention.
They're not only not buying discs, they're not going to overpriced
shows with exorbitant ticket fees either. In an era where it's about
getting the masses involved at a cheap price, the music industry has catered
to an ever shrinking few willing to overpay for crap.

Joe and Jane Public want music. But they'll just steal it. Or listen
to the radio.

As for new stuff? You'll hear about it from your friends, if you're
INTERESTED! Otherwise, you'll just fire up your home theatre and watch
one of the 500 channels or a DVD.

Music has turned itself into a second class citizen. Via greed, via an
inability to wake up and admit we're living in the future.

It's not like this inevitability, the impending death of the CD, was
sprung upon the executives in the middle of the night. It was obvious at
LEAST seven years ago, when the original Napster gained serious
traction. The only person who saw the light? Steve Jobs. And he made his
money from selling iPods, and now iPhones. If the iTunes Store never
goes ga-ga, he just shrugs his shoulders and moves on. As for the music
industry??

There will be a new music industry. But it will not look like the old
one. It will be run by youngsters, with different values, spreading
the word amongst their peers. They won't sell out to Madison Avenue
because Madison Avenue won't have any idea what they're doing. When the
new acts do get traction, will advertising even LOOK the same? Will
anybody be watching the commercials on television? Will we live in a
Google ads world?

Google, Microsoft and Yahoo are duking it out online. Even AOL. You
wonder why AOL went free? For the EYEBALLS! There wasn't enough money
in selling online access to compete with the big boys focused on ads.

Same deal in music. By catering to a select ignorant or addicted few,
willing to overpay for discs, the music business ignored the
mainstream, failed to see what the people wanted and where they were going.

The people are digital savvy. It's in their DNA. Selling McCartney
discs at Starbucks is the last Hail Mary left. Whether it's successful
or not, you won't be able to do it during Christmas '08, Starbucks won't
be able to stand the hit to its credibility, its customers will LAUGH
at them, DISDAIN them.

The disc is dying, are you prepared?


--
Visit the archive: http://lefsetz.com/wordpress/

"The disc is dying; are you prepared?"

I never stopped being prepared. My extensive vinyl collection has served me well over the decades. Most music since the end of the eighties hasn't really been worthwhile anyway. Only indie material matters now.

This article seems so pessimistic and narrow-minded. I don’t think that the CD will become a sideshow as is suggested here. I guess it really depends on the target audience and the era in which one has lived. I can certainly see both sides and appreciate the fact that everyone has their own ways of obtaining music.

In my opinion, regardless of what may happen to the CD in North America or Europe, there will still be a collector’s market in Japan. Moreover, reissues are a big part of the repertoire over there, including a few indie labels. One label that is a major, Universal Music Japan, recently reissued all of the albums by The Police in the mini cardboard sleeve fashion. All of the stores were sold out very quickly. About one month later, the label made another run of the discs with different catalog numbers. Yes, I know this is a major label but as a collector, I wanted to have them, and so I do. These mini-LP sleeve discs are such a hot commodity that The Russian Federation has produced some counterfeits that appear pretty good to the untrained eye. Here are some brief remarks from a website devoted to the Mini-LP CD as well as a comment from a seller on eBay:

Japanese Mini-LP FAQ
eBay Seller Comment

If the CD is dying, Russia would not continue to make high quality Japanese fakes. Another thing about the reissues coming out of Japan is while they may be old news to some, many of them are new to me. There’s a lot of progressive rock from the ‘70s that I am just discovering, including some in foreign languages such as those from Italy. There is also some British rock that I am now coming to know. I don’t have much interest in downloading all the songs that interest me. I will sample the music online and purchase the CD, which I may eventually put on my hardrive and maybe later transfer to a portable device. Of course, I will try my best to purchase them from the indies such as Airmail Recordings whenever possible, but I may have to resort to purchasing a major here and there.

There is also now a resurrgence in vinyl among today’s youth. There was a study issued last year by David Hayes of the Ontario Institute for Studies in Education (University of Toronto). To me, the Japanese mini-LP sleeve discs are an extension of this in that they are packaged like a record album but only smaller and a different type of disc.

Anyway, we all will have our differences about the music we like and the way to get it. Just my 2 cents.

Predicting that this year's holiday season will be the last one for CD's is, by far, too premature. Many people realize that digital quality can be FAR below CD quality. Until the big labels get their heads out of the sand and embrace the digital age, CD's will still be a great medium for music. I doubt it will ever really completely fade away. It will always remain larger than vinyl.