When The CD Dies

"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."

Plunge in CD Sales Shakes Up Big Labels

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.

Thoughts on Music by Steve Jobs

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.


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?

2 Responses to When The CD Dies »»


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  1. Pingback by The Death of The Music Business??? | Crate Kings | 2007/05/30 at 17:03:44

    […] rspective on what should be taking place within the industry to ensure its viability […]

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  3. […] .I.P. CDs
    Posted by Dave Segal under Uncategorized
    Wed 6 Jun 2007

    A recent article from The Lefsetz Letter site waxes foreboding about the CD&# […]

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Trackbacks & Pingbacks »»

  1. Pingback by The Death of The Music Business??? | Crate Kings | 2007/05/30 at 17:03:44

    […] rspective on what should be taking place within the industry to ensure its viability […]

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    Trackbacks & Pingbacks »»

    1. […] .I.P. CDs
      Posted by Dave Segal under Uncategorized
      Wed 6 Jun 2007

      A recent article from The Lefsetz Letter site waxes foreboding about the CD&# […]

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