Why Artists Should be Very, Very Sad About the Death of the CD…

You can’t turn back time, but there’s a reason why older artists are richer, why merch tables don’t support tours anymore, and why the music industry used to employ a lot more people.  Because anyone that tells you the industry is ‘recovering’ actually means that it’s ‘bottoming’ (and there’s a huge difference).

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Unfair comparison?  Well, here’s the comparison for the last 10 years, which shows there’s still no comparison.

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Sales data from the RIAA.  Written while listening to Yeah Yeah Yeahs.

44 Responses

  1. The Analyst

    The second chart is also an unfair comparison. The landscape of the recorded-music business in 2004 was far different than it is today, and lumping together the last 10 years of sales in these formats doesn’t show us much. The iTunes store was brand new at the time, and none of the leading streaming platforms even existing at the time. You also omit vinyl sales, which as you recently pointed out, are growing quickly.

    The statements made at the start of this article (“…why older artists are richer, why merch tables don’t support tours anymore, and why the music industry used to employ a lot more people. Because anyone that tells you the industry is ‘recovering’ actually means that it’s ‘bottoming’…”) may or may not be true, but pulling together some tangentially-related groupings of data does not support your case.

    • Paul Resnikoff

      I think you’re missing the point of the article and data presented. These are cumulative sales, cut across different time periods to show the absolutely massive amount of revenue generated by the CD. Other formats generate far less revenues; they pale in comparison when it comes to revenue-generating power.

      • FarePlay

        Thank-you. One thing almost all of us can agree about. With great marketing, you can sell almost anything. Red Bull, Go Pro, Bottled Water, Starbucks, Beats Headphones, Fiats, $250 Concert Tickets, unscalped.

        So what about music? We’ve been so focused on our differences, no one has promoted the value of music. On one side you have the music industry, that has burned hundreds of millions on lawyers with little to show for it, but wealthy lawyers. Musicians, who have been eerily silent until recently. Amazing what a handful of passionate journalists and bloggers can do. Or shall we say that the champions of free have held court until recently.

        Then we have all the negative rhetoric. Can you believe that people paid $20 for on song. A mantra that has been repeated so often, by so many that everyone under thirty or is it forty believe this is true. Talk about trashing a product. I mean we even have a heated debate about the resurgence of vinyl as if it’s malaria.

        I really don’t understand this either or mentality that is embraced so tightly by this digital generation. People who would rather defend tech than artists.

        A generation fighting so hard to be marginalized by the corporate world. Yes, tech is the new Wall Street.

        • FarePlay

          The music streaming market place is becoming overcrowded with services that want to give away their service for free.

          And just what is that they are giving away? The earning power of musicians and songwriters.

          Once these services go out of business all that’s left is the artist, whose work has been seriously devalued and used to fuel someone else’s failed fantasy of success.

  2. jw

    The bigger the bundle, the bigger the profits. Absolutely. But a lot of that content that was being paid for was unwanted. It’s very easy to make the case that unbundling was a correction in the marketplace, & reflects the true demand for music on a song-by-song basis. The demand for unbundling during the ’90s, & even the development of Napster, were essentially a market force. You can’t champion capitalism when it means more money for record companies, & then act like it’s some tragedy when it means less money for record companies.

    You can’t have the profits of the late ’90s without the backlash. The idea of an enduring reign of the compact disc is just a fantasy. It was unsustainable, that should be clear to everyone. There is no alternate reality where sales don’t fall off dramatically in the ’00s.

    Streaming further reflects demand on a play-by-play basis, which further reduces the padding built into the $.99/$1.29 model, but with the idea that the value of a play will continue to grow over time, based on adoption of the streaming model. This puts the onus on the artist to create more great, listenable music, which is a boon for consumers, & is ultimately great for art (that every play has to be worked for). This is in stark contrast to the days when consumers were forced to pay $15 for a single great song. Under that model quality suffered.

    • Yves Villeneuve

      Physical formats and presentation will always exist.

      Some people receive additional reactions from touch: CD cases/vinyl record sleeves and CDs/vinyl records too.

      Some people receive additional reactions from sight: Cover art.

      If you want to talk about demand we have to talk about supply too. For every stream, you pay the artist .012 cents; meaning no monthly caps on music expenditures. This would be a perfect trade and fair for everyone in a capitalist economy.

    • FarePlay

      Thank you. I just barely finished typing about this very “distortion”:

      “This is in stark contrast to the days when consumers were forced to pay $15 for a single great song. Under that model quality suffered.”

      Yes JW, SOME albums actually did have only one good song. They represent about 2% of my total collection of 2,000 CDs, LPs and Cassettes.

      DVD Sales Spiked in the early 2000’s; CD sales spiked in the late 80s early 90s and was driven by catalogue sales as people converted their collections to the new format.

      • jw

        Anecdotes about your personal collection don’t really mean anything. I’m happy for you that you love a lot of your CDs, but the only ones that matter were the small number of CDs that were actually selling.

        The perception is that in the early/mid ’90s, it wasn’t uncommon for a record to have 4 or 5 hit songs. Start with Nevermind in 1991, which had 4 big singles, & go forward. The first STP record had 4 big singles. Sheryl Crow’s first couple of records had 4 big songs. Oasis’ Morning Glory had 3 huge singles & a lot of quality deep cuts. Shania Twain’s & Brooks & Dunn’s first records each had 4 #1 country hits, & every record Garth Brooks put out was loaded. It seems like 5 of those songs from the first Pearl Jam record were big hits. Aerosmith’s Get a Grip had 4 big singles. Green Day’s first record had 3 #1 alt singles, & a couple more top 10s, & then another #1 off a soundtrack directly after. Gin Blossoms had big 4 singles on their first record. The Wallflowers’ 2nd record had a couple of huge songs & a couple more hits. It’s almost like you could count on a record to have 4 charting singles & a few interesting deep cuts from ’91 to around ’96. And then it just seems to drop off.

        Now I realize that a lot of factors influenced this… MTV was getting much more urban & consolidating their music video playing time to TRL & night time, radio playlists were getting tighter, etc. Music video production became much more expensive, which meant the focus would shift to fewer, bigger singles. Etc. It’s almost like the amount of exposure offered earlier in the decade (between MTV & looser radio playlists) kept the overall quality of records higher. But none of that changes that fact that consumers, at that point, felt like they were paying more & getting less.

        I would love to see this graphed… quality of albums (measured by # of charting singles per album, adjusted by peak position per single) over the course of the decade, set against the rising price of CDs.

        • Richie

          Most people who buy albums do not buy them for the “hits”. You should credit music buyers with more intelligence than that (unless you are talking about the present day, self-absorbed, empty-headed, ADHD suffering Facebook generation).

          Album oriented music has a sequential flow/theme/atmosphere/whatever, that is completely lost when it’s dissected into bite-sized ‘singles’.

          The tactile pleasure of holding LP’s/CD’s, and scrutinizing the artwork/lyric sheets has also been lost.

          The aural pleasures of Hi-Fidelity playback on big-ass surround sound speaker systems has been lost.

          The very soul of music has been lost.

    • FarePlay

      “Streaming further reflects demand on a play-by-play basis, which further reduces the padding built into the $.99/$1.29 model, but with the idea that the value of a play will continue to grow over time, based on adoption of the streaming model. This puts the onus on the artist to create more great, listenable music, which is a boon for consumers, & is ultimately great for art (that every play has to be worked for). This is in stark contrast to the days when consumers were forced to pay $15 for a single great song. Under that model quality suffered.”

      You are truly clueless. As I’ve said to you before, you don’t have a valid point of view. You just like to argue.

      • FarePlay

        “I would love to see this graphed… quality of albums (measured by # of charting singles per album, adjusted by peak position per single) over the course of the decade, set against the rising price of CDs.”

        I mean where do you come up with this shit? I’m dealing with art not quantum physics.

        • GGG

          Actually, we’re dealing with issues of economics, both real and theoretical right now, and 99% of the time on this site. Plenty of the best music of all time has been stolen through piracy. If I wrote the greatest song in the world right now it’d still be pirated a shitload. I get it, you want everyone to know how pro-artist you are, great. But quality of art isn’t going to magically fix the hole we’re currently in.

        • jw

          I mean I have a hunch about what the overall quality of albums towards the end of the ’90s looks like, & I gave reasons why, but I’d love to see the data graphed to be proven right or wrong. I don’t mind being wrong, but it takes more than your opinion to make it so. However, I don’t think I’m wrong (see paragraph 3 below).

          I can’t think of a reliable way to truly gauge the quality of album tracks, but it stands to reason that a focus on fewer, bigger singles would produce less focus on the album tracks. There are acts (Beck or Radiohead, for instance) that throw a wrench in that theory, but I believe those acts are not very significant, statistically, as a portion of all albums sold. Therefore, judging albums’ quality in terms of the performance of its singles seems like a reasonable way to determine if there truly was a decline in quality undermining price hikes, leading to the advent & adoption of Napster & subsequently the unbundling of music.

          But even without any of that data, if people really wanted more than just the single, they would be buying those tracks. If, like you were saying, all of the deep cuts are so good, why aren’t people buying those tracks? Why are so many digital downloads sold a la carte? The option is there. What’s stopping them? You may have a subjective opinion about the quality of the modern album, but we have objective data that points to a large portion of consumers only desiring the single (or some number less than all of the tracks), & that’s the determining factor here. Lots of people are only interested in the single, & you’re suggesting that they ought to pay for other tracks that they demonstratively have no interest in, in order to get the one track that they are interested. This costs the consumer 6 to 12 times what they would’ve paid for the single, which simply goes to line the pockets of artists. I’m all for artists getting paid, but consumers shouldn’t have to pay for tracks they aren’t going to listen to.

          No one has taken away people’s option to buy whole albums. Some consumers are simply choosing a la carte. And it’s not because of some internet rumor that deep cuts aren’t up to snuff. You must remember that before the Beatles, 12″ records were generally compilations of singles. Everything was a single first & foremost. And the Beatles changed that. But not every band is the Beatles. And consumers shouldn’t have been forced to buy albums of unproven tracks by mediocre bands. A la carte purchasing has brought back a focus on singles, which I think is great. That’s how Motown kept the quality so high the whole time they were in Detroit.

          For my money (and I spend a lot of money on music), I would prefer for it to be divvied out amongst artists according to how much I enjoy their music. If I listen to, for instance, the Arcade Fire record once or twice & it’s not really my thing, but then I listen to the Haim record 10x in a row, I would like for Haim to receive 5-10x as much payment. Streaming sort of democratizes the payments in this way (theoretically, anyhow). Any other manner of distribution is, in a sense, penalizing the consumer for taking a chance.

          • FarePlay

            Here’s the core of our disagreement:

            This whole argument that more musicians are making money now, is misleading. While digital distribution has exponentially increased the number of musicians who can make a tiny sliver of income from their work, it has done nothing for the majority of mid-level artists who were able to earn a living ten years ago.

            You continue to argue the obvious. When you keep telling people that albums are a rip off, they eventually they believe it. If the party line was some albums are a rip off because they only have a couple of good songs, that would be closer to the truth. But my take on the proponents of streaming is that they have a “scorched earth” attitude toward those of us who want to maintain some level of recorded music sales for as long as we can.

            JW, you have consistently supported your position as a supporter and fan of music by saying you are an avid collector of recorded music, often citing waiting for deliveries of physical product. But then you jump the tracks, like you did earlier to create some abstract of the quality of music by citing a small sample of mainstream artists and the number of “great” songs contained on those albums.

            You don’t sound like someone who throws money around, so there must be something of value there.

          • jw

            I think everyone should have the option of consuming music in whatever format they’d like… CDs, vinyl, mp3s, flac, streaming, whatever. I buy records that I love. And I buy a lot of them. For me, that’s the ideal way to consume. But I wouldn’t buy nearly as many records if I couldn’t listen to stuff first on Spotify. So I’m not jumping any tracks. You’re completely wrong in assuming that bundling/unbundling or ownership/streaming can not or should not co-exist. Oftentimes I stream a record for months before I commit to ownership. And there are plenty of instances where I love a couple of tracks on a release & I stream them. Or if I want to put them on a mix for someone or a podcast, I get the mp3. And that’s the way it should be… I shouldn’t be forced to buy those releases for just one or even a handful of tracks. I don’t care how bad it gets for the industry or for artists, consumers shouldn’t be duped into paying for tracks that don’t care for & aren’t going to listen to. Not in the late ’90s, & not now. I don’t budge on that. If you write 12 great songs, I’ll buy all 12. I’ll buy the deluxe clear vinyl edition, & I’ll probably even buy the 20th anniversary re-issue with all of the shitty outtakes. But if you only put 1 or 2 good tracks on a record, I’m not going to pay you for the other 10 or 11 just because they’re bundled. I understand that you mean well, Mr. Play, but your argument is anti-consumer, & it’s your attitude that (in part, at least) led to Napster. That sense of entitlement, regardless of quality. Those who do not learn from the past are doomed to repeat it, someone once said.

            I’m not saying that bundled albums are inherently a ripoff (you’re overstating there, in dramatic fashion), but consumers have certainly been ripped off by bundled albums. Unbundling prevents that without penalizing the format itself.

            You will never hear me having a problem with anyone buying or selling bundled music, so long as the music is good & the consumer gets his or her money’s worth.

          • FarePlay

            None of what you say is true. Anti-consumer, created Napster. All of this is typical of someone with an agenda and no integrity.

          • jw

            Look, man. My opinion about the quality of albums doesn’t mean a hill of beans. Neither does yours. People aren’t getting on the internet & reading opinions & deciding whether to buy a whole album or single based on that. That’s just not a determining factor. Lol. A lot of people only ever wanted the single even when they couldn’t get it, & would just prefer to carry around an iPod with a bunch of singles, rather than a discman with a cd that they may or may not enjoy all the way through. Think of it… a benefit of CD players was that you could SKIP tracks, which was an improvement on fast forwarding on cassette. The formats progressed because hardware manufacturers listened to what consumers wanted. I’m not dreaming this stuff up. And these were consumers who weren’t hearing opinions about the quality of bundled music or the lack thereof… that concept didn’t even exist for the consumer at the time. All they had was first hand experience with the music they were buying. And as first hand experience became cruddier and cruddier in the late ’90s as prices rose, the backlash was inevitable. My opinions don’t determine consumer behavior, consumer behavior determines my opinions.

            Here’s another thing. There’s different types of consumers. One consumer may want to listen to a single 12x in a row. Another may want to listen to a whole album the whole way through. A singles-oriented person isn’t a bad person. Under the CD model, that person would have to buy a whole CD (since labels all but quit selling singles in the late ’90s) to get a single song. If their music budget was $60 for the year, they might get 4 singles that they really love. Under the mp3 model, they could get those same singles for about $5. With streaming, 12 plays pays out 12 plays, regardless of whether the consumer is a singles- or album-oriented person. Theoretically, this is the most fair to the consumer & to the artist.

      • To be fair (play)

        Saying someone doesn’t have an argument is also not an argument. Just saying.

    • Malcolm Hume

      Unwanted content? People wanted it enough to buy it. That makes it wanted.

  3. Anonymous

    I blame the Clinton economy for being too good and creating unrealistic expectations.

    • FarePlay

      You mean the Telecommunications Act of 1996, that basically killed radio.

  4. A-J Charron

    Amusing. Before Soundscan, nobody knows what actual sales were; labels were able to hide so many of them in order to give artists less money. When Soundscan happened in the 90s, it became more difficult to hide sales. Then, several years later, all of a sudden, sales decrease. At least according to Soundscan… More like labels found new ways to hide sales (when was the last time you saw someone scan an album at a merch table???) Just go to a CD maker and see how long it takes to get your CD manufactured. Manufacturing delays have been getting longer and longer, not shorter for products that aren’t suppose to sell?

    As for kiosk, I assume they mean merch tables here. I really want to pay income tax on this all-cash side of the business so I make sure to tell you exactly how much I sell… Right…

    Labels fire people, but hire more in management, in higher pay jobs. Something very wrong with the official numbers.

    • jw

      Isn’t soundscan tracking inventory purchases, rather than consumer purchases? At least on the physical end of things. So aren’t artists essentially buying those cds from the label at wholesale (which may or may not be soundscanned, I guess), & then acting as a retailer at the show?

  5. TuneHunter

    Coincidently we have a chance to do it again Cash @ Discovery. (CD)

  6. Anon

    Or maybe consumers were unknowingly being ripped all those years before the explosion of digital distribution??!!?!?!??!!!?

    • Yves Villeneuve

      What did you expect? Manufacturing and retailing a CD single, 45 vinyl single, mini-cassette single and mini 8-track single for every track on the album?

      Anon is not the brightest Internet hacker in the world.

  7. Michael Silverman

    Always interesting to look at these charts, but CDs generally have not trickled down to the artists in nearly the percentage levels as digital media do today. So if the chart reflected just the amount to artists from each format, you’d really have something to compare.
    A 17 dollar CD back in the day often garnered 50 cents to the artist after the label, manufacturing, distribution, etc. That’s pretty laughable these days, when an artist can get 70% of iTunes sales.

    • Anon

      both of your calculations are WAY off! an artist with a terrible deal may get a 12% royalty deal. if a CD sold for $17, even with deductions for reserves and free goods, the artist is still looking at more than a $1 royalty. as for your itunes calculation, the record labels generally receive 70% from Apple, the artist will still only see their respective royalty, most likely somewhere between 15 and 20 cents.

      • Anon

        royalty calculation for itunes sales was based on the sale of a 99 cent single track.

  8. rikki

    as a dj i want the FULL WAV file…….and a psychical cd is still the best way to get it, until we can get FIOS or some other fiber internet speeds…….. If i can download the whole cd in 5 minutes at full wav.( 15 mb/sec)….then i can burn my own cd. or make my own mp3 file for playing at my gigs.

  9. DMaxJames

    I was a small label guy who’s company sold lots of music, primarily via CD’s, albums and singles. I think to frame the argument properly you have to more wholistic, i.e. look at from a much wider time period. Our business, recorded music, was virtually from inception a singles driven business run by mom & pop sized labels and driven by the tastes of the principal. As mentioned by a prior poster the CD format and bundling changed that. The 80’s and 90’s were a time of excess and not just on Wall Street. Music companies had unsustainable margins and a format change then was inevitable just like a format change in the future is inevitable.

    The system for the sale and distribution of music was as flawed then as it is now, an imperfect market where the distributor had too much control and hence extracted unreasonable profits. I’d argue the same is true today with iTunes, et.al. iTunes controls a majority of the distribution market and extracts unreasonable profits from the music provider by essentially substituting iPhone/device sales for music sales. Just like digital downloads provided a solution to the physical inequity problem, streaming is doing the same to digital downloads.

    The whole model actually works relatively well in terms of punishing past abuses save one major issue, Piracy. It just doesn’t work and never will unless there is a way for a seller to say, “NO that price is too low” here is my ASK what is your BID?”

  10. Truth Time

    This is revenues. Revenues don’t mean shit when it comes to artist payouts. If a label sells a CD to a retailer for 9 bucks, a certain percentage of that goes to production costs, another percentage goes to bucket X, then bucket Y, etc.. etc.. etc.. Only a certain percentage ever goes to the artist. What’s scary about the decline in CD sales is that CD’s are generally getting cheaper (at least catalog). So, that implies that wholesale costs are declining which reduces the actual dollar amount the percentage that get’s paid to the artist actually represents. Digital sales have differing percentages on artist payouts. In my opinion there really isn’t anything we, as musicians, can do to ever see the percentage on physical sales ever make us any money ever again. Why? Well have you been to any major retailers and looked at their CD space? It’s non-existent compared to days of old. The only answer for royalties is going to come from digital. So, don’t be so quick to bash streaming services because it’s going to be up to them to figure out the model that works for us down the road. Also, be ready to face the hard truth that musicians won’t be able to make money in the future on music alone. Of course I’m excluding all of the whores out there who you see on award shows. They’ll make money and their music will be pushed by the people who control marketing channels until the day they die. Once they die then you’ll just start seeing a lot more 18 year olds getting screwed over with contracts and then booted from the industry without a dime to show for it. Sad truth unless streaming can get their shit together.

  11. ivica

    People forget something. We used to pay for entire CD/casette/vinyl. And there was maybe 1-2-3 good songs,. and others were “fillers”. These days we ONLY buy what we like, per song. Off course revenue is down. And not because of piracy, piracy existed way before mp3 era.
    Formula is simple: make more good songs, more revenue you’d have. And artists are able to bypass money hogging record companies, and get more money to themselves.

  12. John Allsup

    Now 60,000 * 3 = 180,000. The second chart is cumulative over ten years, the first over thirty, or so it appears. Thus there appears to be a 10% fall in CD sales in the last decade compared to the average over the last three. Many industries have seen a single product fall much more drastically. That, or the graphs are not clear in what they show.

  13. Kings Of Spins

    Its about value for money, everything we buy we want value for money – a music file has no value.

    Had meetings about this with top level people employed in the US and the UK, at the OCC, BPI, Universal etc but every body is blind to their OWN contract and not the long term issue, self-preservation over putting their heads above the line.

    The fast-food industry sells a lot of food by giving perceived value for money – selling is selling, the number one rule is giving the impression of a good deal. Again, a music file is NOT a good deal, it has ZERO value..

  14. Mik J

    Piracy….You only have to watch the nature channel to know that any living thing in this life can get screwed by the system (aka earth’s reality). Change or die. The music business changed. Thats life. Interestingly, movies cost millions, 10s of millions, 100s of millions to produce, … a great song? What maybe $1,000 -5,000. I rent that same million dollar movie at Redbox for a buck and a quarter. Go figure. We want to charge a dollar a song? Talk about high profit margins!!! How many times are you gonna listen to to the song you buy? My music library has 1,000s of songs and all of em take my time to listen too. The amount of music being made today is said to be (2,000 a week, 8,000 a month) … whose got the time to listen to them all? Music is just that… music. People will be people and will pay for something because it has value to them not to us. Nobody told us to go out and make music, people do it, and it gets done. Do they get paid for it? Its a matter of perspective. Does a minimum wage worker get paid for what he/she’s worth? Its a tough world out there. We all wanted to make music, wanted technology and this is what we have. There’s not a lot of money in music. I got over it. The money today in music is touring. Thats work and you will get paid if anyone wants to “listen” and take the time! You’d better deliver and then you could make a sale, a lifetime fan, and sell em anything that has to do with you. Ask anyone to go live on the road, in a bus, a hotel, they write music about that stuff… its work! Making a song, recording it …thats personal, its risky but if you love what do…. Priceless. There is no guarantee of success. Let the Force be with you when you make your decision and be ready for mental star wars … Elvis, Jimi, Kurt, Namaste music lovers I hear the pain… in the mean time lets keep the good creative music coming and someday we’ll all be listening then waiting again for the next new one.

  15. Sam Ogbonna

    The music industry should realize the old business model of selling people plastic disks with music engraved or burned onto it is over. Technology overwhelmed that. The album is an artifact of an analog world where we couldn’t move information around efficiently. Meanwhile, what is artistically meaningful or coherent about ten to twelve very different songs that happen to end up on one piece of plastic. The fetishization of the album began with Sgt Pepper and then reached its height when the industry realized what a boon the Saturday Night Fever soundtrack and Thriller were for them. There is however nothing that makes an album a unity except an arbitrary concept. If we recognize that, then anything is possible.